Suncor Energy Inc. SU-T reports second quarter profit of $480-million, or 31 cents per common share, compared with a net loss of $51-million or six cents for the second quarter of 2009.
Operating earnings in the quarter were $781-million, compared with $38-million in the corresponding quarter of 2009.
The company says the increase in operating earnings was primarily due to additional upstream production as a result of the August, 2009, merger with Petro-Canada, as well as higher benchmark prices in the quarter.
This was partially offset by the stronger Canadian dollar, relative to the U.S. dollar.
Cash flow from operations was $1.76-billion, compared to $295-million in the second quarter of 2009. The increase was primarily due to production volumes added as a result of the merger as well as higher realized prices.
Suncor's total upstream production during the quarter averaged the equivalent of 633,900 barrels of oil per day, compared to 336,100 per day in the second quarter of 2009 – again mainly because of the merger.
Since the merger with Petro-Canada, Suncor has vowed to stay true to its oil sands-focused roots, inking deals to sell $2.4-billion in former Petro-Canada assets that don't fit with its core business.
Most recently, Suncor sold $285-million in natural gas assets to Abu Dhabi state-owned energy firm TAQA. It has also announced sales of natural gas properties in the U.S. Rockies, Western Canada, the Netherlands and Trinidad and Tobago. Some assets in the North Sea and Western Canada are still on the block.
Suncor is best known for its vast oil sands mining operations north of Fort McMurray, Alta. It also produces crude from its Firebag holdings using high-pressure steam to liquefy the sticky bitumen enough that it can be drawn to the surface.
Through the Petro-Canada deal, Suncor inherited a 12 per cent stake in the Syncrude Canada Ltd. partnership which controls the world's single largest oil sands mining project.
It also took on a 60 per cent stake in the proposed Fort Hills mine, which has been stagnant since costs ballooned and crude prices crashed in late 2008.
Fort Hills partner UTS Energy Corp. recently agreed to a deal that will see its 20 per cent stake go to France's Total SA for $1.5-billion. Teck Resources Ltd. holds the remainder of Fort Hills.
