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Suncor Energy (SU) to Sell its Pioneer Energy Assets

Suncor Energy Inc. (SU), Canada’s leading energy firm and the largest oil sands outfit, announced that it has entered into an agreement with Parkland Fuel Corporation, the largest fuel distributor and retailer in the nation, to sell the assets of Pioneer Energy. The transaction is valued at C$378 million.

Pioneer Energy is jointly owned by Suncor Energy and The Pioneer Group Inc. While Suncor will receive a cash consideration of C$182.5 million for its share in the assets, The Pioneer Group will garner C$76 million in cash and about C$119 million in Parkland shares.

The transaction includes 393 Pioneer-branded retail gas stations, located throughout Ontario and Manitoba. The sale is anticipated to close in the final quarter of the year, subject to regulatory approvals.

Calgary, Alberta-based Suncor's operations include oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand.

Earlier in the month, Suncor Energy had signed a deal with Tamarack Acquisition Corp., an affiliate of Tamarack Valley Energy Ltd., to sell its Wilson Creek assets. The transaction is valued at C$168.5 million and will expectedly close in the fourth quarter of 2014.

The company had mentioned that it is selling non-core assets in a move to restructure its portfolio in order to focus on assets that fit in its long-term growth strategy.

Currently, Suncor Energy carries a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. market in the next one to three months.

Meanwhile, one can consider better-ranked players from the broader energy sector such as Cameron International Corporation (CAM), Sunoco Logistics Partners L.P. (SXL) and Patterson-UTI Energy Inc. (PTEN). All these stocks sport a Zacks Rank #1 (Strong Buy).

Read the Full Research Report on PTEN
Read the Full Research Report on SXL
Read the Full Research Report on CAM
Read the Full Research Report on SU


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