Suncor Energy posted a $257-million net profit in the first quarter of 2016.
The Calgary-based company released its first quarter results late Wednesday.
“Suncor’s ability to generate cash flow from operations, combined with the strength of our balance sheet, allowed us to maintain our dividend and continue investing in long-term profitable growth projects, even in the poor price environment we saw in the first quarter,” said Steve Williams, president and chief executive officer. “We continue to capitalize on opportunities, such as increasing our investment in the Syncrude asset, to generate long-term value for our shareholders.”
It was a busy quarter for the Canadian energy giant as it acquired Canadian Oil Sands Limited on Feb. 5, 2016 adding 128,500 barrels per day of synthetic crude oil capacity.
Operating losses totalled $500-million mostly due to low commodity prices and wider price differentials from bitumen to Western Canada Select. The first quarter profit was a stark contrast to the $341-million net loss posted by the company for the prior year quarter.
Total upstream production was 691,400 barrels of oil equivalent per day in the first quarter up from 602,400 boe/d in 2015. The increase is due primarily to the working interest acquired in the Syncrude deal. Operating costs per barrel for its oilsands operations decreased to an average of $24.25 per barrel, compared to $28.40 in 2015 mainly due to cost savings strategies, production efficiencies and lower natural gas prices.
“Our cost reduction initiatives are continuing to drive efficiencies across our operations,” said Williams. Record oilsands operations production and our focus on sustainable cost savings have allowed us to achieve the lowest oilsands operations cash operating costs per barrels since 2007.”
Suncor says work on the Upgrader 2 turnaround, along with ongoing well pad development at Firebag and MacKay River, tailings management, and logistic and storage asset work for Fort Hills drew significant capital spending in the first quarter. According to the press release Fort Hills is on schedule with construction activities 55 per cent complete, first oil is expected in the fourth quarter of 2017.
Suncor announced earlier Wednesday that it had acquired an additional five per cent interest in Syncrude.
