Cara Community Oilers: Suncor Energy

Suncor Energy (NYSE: SU) reviewed 10-22-2020

Market Cap: $18.12 Billion (USD)              Share Price: $11.88 (USD)

Shares outstanding: 1,525,151,000

Cash & cash equivalents: $1.846 Billion (USD) at 30 Jun 2020

Credit facility: $6.8 Billion

Debt: $21.88 Billion (USD) at 30 Jun 2020

Insiders: Low                      Institutional: 876 hold approx. 72% of the float


CEO: Mark Little                HQs: Calgary, Alberta, Canada

Suncor Energy extracts synthetic crude oil from bitumen thru a process of in situ bitumen recovery and surface mining & processing. Suncor also operates four oil refineries

The company reported a loss of $614 Million (USD) or ($0.40) cents per share in Q2 2020. Earnings for the prior quarter in 2019 were $2.92 Billion (USD) or $1.92 per share

Cash from operations came in at $488 Million (USD), compared to $3.0 Billion in Q2 of 2019

The company’s net debt position increased by $2.634 Billion in Q2 2020, via the issuance of 3-, 5-, and 10-year unsecured notes

Suncor’s management has responded to the difficult operating environment for energy by decreasing capital spending by 33%, or $1.9 Billion, reducing operating costs by 10%, or $1.0 Billion, and by cutting the dividend by 55%

The CEO announced a layoff of 10-15% of their employees on Oct. 7, 2020

Suncor currently pays a $0.63 cent dividend with a yield of approximately 5%

The company’s revised guidance is towards total 2020 production of 680,000-710,000 barrels oil equivalent per day

Bottom Line:

  • Bloomberg reported that the company may sell their North Sea Oil & Gas fields
  • Suncor is an outstanding company but I hold no stock position. However, the current share price represents good value to long-term oriented investors and in the next three months I am contemplating a position for the Natural Resources portfolio

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