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Jeff McIntosh/The Canadian Press

Canada's two biggest energy companies - Suncor Energy and Canadian Natural Resources - delivered some of their best results ever, propelled by strong oil sands production and high prices.

Both companies are benefiting from rising oil prices, which yesterday closed at $86.49 (U.S.) a barrel, up about 20 per cent since August. It helped Suncor deliver a 90-per-cent jump in operating profit, while net profit reached $1-billion (Canadian) or 65 cents a share.

Suncor chief executive officer Rick George said it was "one of our strongest quarters" for oil sands production, and added that the company's blockbuster 2009 merger with Petro-Canada will deliver the company $800-million in savings, more than double expectations.

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"We're coming out of the merger in really good shape," Mr. George told investors and financial analysts on a conference call on Thursday. "This is going to get to be fun again."

At CNRL, the company's profit topped expectations and its new 110,000-barrel-a-day oil sands mine has helped drive production of oil and natural gas 9 per cent higher this year to the largest rate of any company in Canada. The company reported net earnings of $580-million or 53 cents a share.

Investors were impressed by expansion plans in the oil sands. They drove stock of Suncor 8 per cent higher and pushed CNRL shares up 4 per cent.

CNRL said it would spend $1.25-billion to develop its Kirby steam-injection project, with initial production of 40,000 barrels a day and potential to reach 100,000. And in the first quarter next year, the company said it will outline detailed Horizon expansion plans, where it aims to more than double production within five years and eventually get to about 500,000 barrels a day.

Investors do not appear worried that Canada's largest energy names may now be potentially off limits to foreign takeovers, following Ottawa's rejection of BHP Billiton's hostile bid for Potash Corp. of Saskatchewan. No investor or financial analyst expressed concern or even asked a question to executives of Suncor or CNRL about the implications of that rejection.

Suncor, worth $51-billion, is the No. 4 company on the Toronto Stock Exchange, and CNRL, valued at $41-billion, is No. 7 - right behind Potash.

The founder of CNRL, Murray Edwards, strongly supports the federal government's decision on Potash Corp. and said it should apply to the oil and gas and mining sectors as well, though he refused to name names or say whether a "not for sale" sign should be affixed to his own company.

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"You've got to be careful," Mr. Edwards, vice-chairman of CNRL, said in an interview late Wednesday, after the Potash decision but before his company's earnings on Thursday.

"It's not every mining and oil and gas company but when you get to certain iconic companies, certain global champions - some people say northern tigers - I think it's important for the country to encourage their continued existence. That would be applicable to Potash Corp. I would argue it would also applicable to certain oil sands companies. It doesn't mean we don't allow foreign investment."

Mr. Edwards suggested a can't-touch list could include "three or four major Canadian" companies in the oil sands and also emphasized such a situation wouldn't at all discourage foreign investment. The oil sands, just this year, have attracted billions of dollars of foreign capital.

"There's lots of foreign capital in Canada invested on a daily basis and it'll continue to be invested," said Mr. Edwards.

Prominent investors in the oil business also feel protection of the largest domestic players wouldn't hurt the flow of capital or be bad for business, including Mike Tims, chairman of Calgary investment bank Peters & Co.

He said it is clear for international investors looking at Canadian resources that there is a "caution flag" in regards to "very large transactions."

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"They will get close scrutiny and may not make it," Mr. Tims said. "Anyone sitting in the chair of a non-Canadian oil and gas company would look at the evidence and draw conclusions."

Jim Davidson, chairman and CEO of Calgary investment bank FirstEnergy Capital Corp., said the Potash decision - which he supports - doesn't mean large Calgary energy companies are necessarily off limits. He noted that the government has not blocked other large resource deals in recent years.

"Canada is still open for business," Mr. Davidson said. "The federal government has shown its ability to stand aside often when there's been public outcry that Canadian business is being hollowed out. I don't think [the Potash decision]takes Encana or Talisman or CNRL or Suncor off the market. Each situation has to be and should be dealt with individually."

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