Suncor can pull oil out of the ground at a rate of $20 a barrel. They are immune to crack spreads and their profits will be hugh. they have plenty of cheap natural gas to refine their products into super crude. yes super crude. The Edmonton refinery has been optimized for processing oil sands crude feedstocks.
At the Sarnia refinery, a $1 billion investment in new equipment has enabled the production of lower sulphur diesel fuel and improved operational efficiency.
At the Commerce City refinery, a $540 million (US $445 million) upgrade has enabled the refinery to meet clean fuels regulations and handle a wider range of oil sands products.
What does this mean to an investor? It means they can extract twice as much gasoline from a single barrel of Suncor oil. Once the hedge funds get wind of this they will barrel into this stock. No other company in the world has placed themselves into this position to produce what I call super crude. Twice the capacity of gasoline production from a single barrel of oil. The price of this stock will not last long
Those are all good "facts", no doubt. And it's really too bad that's not how "the market" actually works.
The only thing wrong with Suncor is that people don't "like" oilsands now, and money managers, being as they simply want their qtrly and annual bonuses, don't really care about anything beyond the next newspaper headline. Patience is for suckers....or real investors.
Some things I know and some things I do not know. The SU upgrade should att $5,000,000.00 a day to there profit margin. It seems pretty substancial to me. Even with this build out it seems there profit was still 2.8 billion compared to 2.1 billion fora company like VLO.
SOLID BALANCE SHEET, RICH IN OPPORTUNITY AND THEY GENERATE ALOT OF CASH
Suncor also operates refineries in North America. The refineries in North America use the same crude as any other American refinery. This will change because of the hugh discount they get by creating this super crude. The company has three business segments, oil sands development, oil and gas exploration thru conventional and offshore oil and gas production rigs, and petroleum refining and product marketing under the Petro-Canada brand (1400 retail outlets). They also have interests in a petrochemical plants, pipelines and product terminals in Canada and the U.S.
I kind of like the company and I think when the market realizes they can pull crude out of the ground at $20 a barrel this stock goes really high. did you know they have been dumping crude on the American market at $70 a barrel. this will change this quarter.
Throw in one huriicane into the gulf of mexico or maybe two and lets see how much crude and gasoline SUNCOR can move across the border. They also make this special type of jet fuel and desiel fuel and with the US transports taking off look out
that is going to take some time. And they need to stop investing in big, stuff that doesnt perform and costs way more than it should. A redirection of the cash flow to give at least a 4% dividend would also be required.