By Canadian Press

Suncor says end of Alberta oil quotas a ‘positive signal’ as it reports $302M loss

Oct 29, 2020 | 9:54 AM

CALGARY – The CEO of Suncor Energy Inc. says the Alberta government’s decision to end its oil production curtailment program in December after almost two years is “a very positive signal” for the oilsands and refining giant.

On a conference call, Mark Little says the end of the quota system imposed to support oil prices will allow Suncor to operate “unencumbered” as it recovers from nine months marked by low oil prices, the COVID-19 pandemic disruptions and a fire in August that hurt production at its base oilsands mining operations.

In the wake of a proposed merger of oilsands rivals Husky Energy Inc. and Cenovus Energy Inc., Little says Suncor is more concerned with improving operational performance and strengthening its balance sheet than taking on debt to grow by acquisition.

Suncor reported a third-quarter operating loss of $302 million as revenue fell 34 per cent to $6.5 billion compared with the same period of 2019, when it earned $1.114 billion on revenue of $9.9 billion.

It said oil and gas production fell to 616,000 barrels of oil equivalent per day in the third quarter from 762,000 boped in the year-earlier period, while refinery output fell to 399,700 barrels per day or 87 per cent utilization from 463,700 bpd or 100 per cent.

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The company, which announced in early October it will cut as many as 1,930 jobs over 18 months to reduce total staff by 10 to 15 per cent, said it is on track to achieve its $1-billion operating cost reduction target by the end of 2020.

Husky losses

Husky Energy Inc. reported a nearly $7.1-billion loss in its latest quarter as it was hit by $6.7 billion in non-cash impairment charges after taxes related to lower long-term commodity price assumptions and reduced capital investment.

The company says the loss amounted to $7.05 per share for the quarter ended Sept. 30 compared with a profit of $273 million or 26 cents per share in the same quarter last year.

Revenue totalled $3.33 billion, down from $5.29 billion a year ago.

Husky says funds from operations for the quarter amounted to $148 million or 15 cents per share, down from $1.02 billion or $1.02 per share in the same quarter last year.

Total upstream production averaged 258,400 barrels of oil equivalent per day for the quarter with 294,800 in the third quarter of 2019 and 246,500 in the second quarter of 2020.

Husky announced a deal on the weekend to be bought by Cenovus Energy Inc. for $3.8 billion in shares.

Cenovus Energy Inc. reported a loss in its third quarter as its results were hit by a $450-million impairment charge related to a refinery it co-owns with Phillips 66 in Texas and lower oil prices due to the pandemic.

The Calgary-based company says it lost $194 million or 16 cents per diluted share in the quarter ended Sept. 30 compared with a profit of $187 million or 15 cents per diluted share a year ago.

This report by The Canadian Press was first published Oct. 29, 2020.

The Canadian Press