Suncor (SU) Achieves Record Upstream Production in Q4 2023
Suncor Energy Inc. (SU), a Calgary-based integrated energy company, announced its impressive operational update for the fourth quarter of 2023 on Wednesday, revealing a milestone in upstream production.
The company reported a quarterly production of 808,000 barrels per day (bbls/day), marking the second-highest quarterly total in Suncor's history. The stellar performance in December further boosted the numbers, with upstream output reaching the best-ever 900,000-plus bbls/day. For the full year, Suncor maintained a steady pace, achieving an average upstream production of 746,000 bbls/day, aligning with its recent corporate guidance.
In a detailed breakdown, Suncor disclosed that fourth-quarter net synthetic crude oil production totaled 476,000 bbls/day, complemented by net non-upgraded bitumen production reaching 282,000 bbls/day. The combined effort resulted in an impressive total oil sands output of 758,000 bbls/day for the quarter.
The Fort Hills project, in which Suncor holds ownership, contributed significantly to the remarkable performance. The gross production at Fort Hills hit a record-breaking 186,000 bbls/day for the quarter, translating to 155,000 bbls/day net to Suncor. On an annual basis, Fort Hills averaged 147,000 bbls/day, meeting the company's guidance with precision.
Syncrude, another key player in Suncor's portfolio, played a pivotal role in the outstanding performance. Gross production at Syncrude was 348,000 bbls/day in the fourth quarter, with 205,000 bbls/day net to Suncor. This led to a new annual production record of 323,000 bbls/day gross.
Oil Sands Operations produced 453,000 bbls/d during the quarter, with a full-year total of 431,000 bbls/d in 2023. The Base Plant upgrader maintained a 90% utilization rate for the entire year, accounting for the effects of the significant 5-year turnaround at Upgrader 2.
Suncor's downstream operations also demonstrated robust results in the fourth quarter, boasting an average refining utilization rate of 97%. This strong performance contributed to an annual average refining utilization rate of 90%, underlining the company's efficiency in its downstream activities.
Suncor's president and CEO, Rich Kruger,expressed pride in the company's achievement and attributed the success to the company's heightened focus on safety, operational excellence and reliability throughout 2023.
Suncor's full fourth-quarter financial and operating results are scheduled to be released on Feb 21, 2024.
Zacks Rank & Key Picks
Suncor currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the energy sector are The Williams Companies, Inc. WMB, Sunoco LP SUN and Murphy USA, Inc. MUSA, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies is well-positioned to capitalize on the anticipated substantial long-term growth in U.S. natural gas demand, thanks to its impressive portfolio of large-scale projects that create significant value. The company’s debt maturity profile is in good shape with its $4.5-billion revolver maturing in fiscal 2023.
WMB’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 13.68%.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
SUN’s earnings beat estimates in two of the trailing four quarters and missed twice, delivering an average surprise of 28.33%.
Murphy USA is a low-cost, high-volume fuel seller, whose stations are located near Walmart supercenters. This enables the company to attract significantly more transactions than its peers. MUSA’s sourcing infrastructure is another key competitive advantage.
The company’s earnings beat estimates in two of the trailing four quarters and missed the same twice, delivering an average surprise of 7.04%.
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