Suncor Quarterly Profit Rises on Oil Price, Production Gains

Author: Spencer Ogden
Date posted03/Nov/2011
Author: Spencer Ogden

Suncor Energy Inc. (SU), Canada’s largest energy company by market value, said third-quarter profit rose 5.7 percent as oil prices gained and oil-sands output increased.

Net income climbed to C$1.29 billion ($1.26 billion), or 82 cents a share, from C$1.22 billion, or 78 cents, a year earlier, Calgary-based Suncor said today in a statement. That met the average estimate of 16 analysts surveyed by Bloomberg.

Suncor and other Canadian oil-sands companies have increased investment to expand output as rising oil prices boost revenue. Crude futures on the New York Mercantile Exchangeaveraged $89.54 a barrel in the quarter, 17 percent higher than a year earlier.

Output from Suncor’s oil-sands projects rose to an average of 326,600 barrels a day in the quarter from 306,600 barrels a day a year earlier, according to the statement. Total average daily production fell to 546,000 barrels of oil equivalent from 635,500 barrels.

The company plans to more than double oil-sands production by 2020, helped by a C$1.75 billion agreement with France’sTotal SA (FP) to jointly develop bitumen mines, which yield a sticky tar-like substance that’s refined into petroleum.

Suncor wrote down C$514 million in the second quarter after the Libyan conflict cut production. The North African country accounted for 3 percent of its consolidated assets at the end of 2010.

Suncor rose 2.8 percent to C$31.79 at the close of trade in Toronto yesterday, trimming its decline this year to 17 percent. The stock has 15 “buy” and seven “hold” ratings from analysts. The earnings announcement was made before the start of regular trading on North American markets.