Suncor Energy Cuts Down 2023 Production Guidance, Keeps Petro-Canada

Suncor Energy (TSX: SU) reported today its corporate guidance for 2023. The firm is expecting its upstream production next year to be 740,000 – 770,000 barrels of oil equivalent per day (boe/d), a cut down from last year’s 750,000 – 790,000 boe/d guidance.

“Over the past several months, our new mining leadership has done an in-depth review of our assets and developed a multi-year plan that will deliver marked improvements in safety, reliability and operational performance,” said interim CEO Kris Smith.

The annual production guidance consists of 385,000 – 425,000 barrels per day from Oil Sands (a 10,000 bbls/day cut from last year), 90,000 – 100,000 bbls/d from Fort Hills, 175,000 – 190,000 bbls/d from Syncrude, and 65,000 – 75,000 boe/d from exploration and production activities (a 10,000 boe/d cut from last year.

On its refinery side, the firm expects 2023 throughput to still be 430,000 – 445,000 bbls/d with refinery utilization rates at 92% – 96%. Refined products sold will also be expected at 550,000 – 580,000 bbls/d, same as last year.

The company, however, is increasing its capital guidance for next year–from $4.7 billion in expected expenditures, it guides the capital expenses between $5.4 billion – $5.8 billion. The budget is heavily focused on sustaining capital, expecting $4.35 billion – $4.65 billion for upstream production.

The oil firm also said on Tuesday that it will keep its Petro-Canada gas station retail unit after a review prompted by activist investor Elliott Investment Management.

“Petro-Canada is a unique, differentiated, and strategic asset due to its strong national network and best in market consumer brand and loyalty program,” board chair Mike Wilson said.

Instead, the firm said it will “improve and optimize” the business, which a Credit Suisse analyst estimated could fetch almost C$9 billion in after-tax proceeds in a sale. Petro Canada’s 1,600 stations account for 18% of all fuel retail sales in Canada.

Early in July, Smith replaced former CEO Mark Little after the latter departed the firm following an agreement with the board on his immediate departure. The resignation seems to stem from the death of a contractor worker at the Base Plant site near Fort McMurray, Alberta. The death is the second this year at the Base Plant site, with the first, on January 6, occurring when a heavy haul truck rear-ended a second heavy haul truck.

Suncor Energy last traded at $45.67 on the TSX.

Information for this briefing was found via Sedar, Seeking Alpha, and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.Suncor Energy Releases 2022 Production Guidance: 750,000 – 790,000 BOE/D

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