Suncor Energy profit drops 69 pct on charges

Reuters

CALGARY, Alberta, July 30 (Reuters) - Suncor Energy Inc , Canada's largest oil and gas company, said on Wednesday its second-quarter profit fell 69 percent as it took a substantial charge to account for a delayed oil sands mining project.

The company, Canada's dominant oil sands producer, reported net income of C$211 million ($193.5 million), or 14 Canadian cents per share, down from C$680 million, or 45 Canadian cents, in the second quarter of 2013.

The result included a C$718 million non-cash charge to account for its share in the Joslyn Oil Sands Project, which was mothballed by partner Total SA earlier this year. It also wrote down the value of its Libyan assets by C$297 million and booked a C$223 charge for oil sands assets that no longer fit into the company's future plans while recording C$314 million in gains.

Adjusted earnings, which exclude most one-time items, rose 18 percent to C$1.14 billion, or 77 Canadian cents per share, from C$934 million, or 62 Canadian cents.

The adjusted result lagged the average analyst forecast for the measure of 97 Canadian cents per share, according to Thomson Reuters I/B/E/S.

Suncor is ramping up its production from the world's third-largest crude oil reserve. It said output from its northern Alberta operations rose 37 percent to 378,800 barrels per day due to less maintenance in the quarter and increasing production from its Firebag thermal oil sands operations.

However, it said it has cut its capital spending budget by C$1 billion, to C$6.8 billion, as it plans lower-than-forecast spending on its oil sands projects and at its Libyan operations, due to political unrest in the North African country.

In total, the company produced 518,400 barrels of oil equivalent per day, up from 500,100 boepd in the year-prior quarter.

Cash flow, a key indicator of the company's ability to pay for new projects and drilling, rose to C$2.41 billion, or C$1.64 per share, from C$2.25 billion, or C$1.49.

Along with its Alberta tar sands projects, Suncor produces oil off Canada's east coast, in the North Sea and elsewhere. It also owns refineries in Canada and the United States.

The company's shares closed at C445.79 on the Toronto Stock Exchange on Wednesday.

($1 = 1.0902 Canadian Dollars) (Reporting by Scott Haggett; Editing by Kenneth Maxwell)

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