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Bulldozers work clearing an area at the new Suncor Fort Hills tar sands mining operations near Fort McMurray, Alberta, September 17, 2014.TODD KOROL/Reuters

Suncor Energy Inc. faces a funding deficit estimated at $4-billion as oil prices remain under severe pressure this year, but it's still forging ahead with a pair of big-ticket oil sands and offshore projects while maintaining its dividend.

Canada's largest oil company, which is nearing the close of a $4.2-billion takeover of Canadian Oil Sands Ltd., has made further cuts to its capital and operating budgets amid expectations that crude prices will average just $39 (U.S.) a barrel in 2016, down 22 per cent from its previous prediction.

Debt levels are expected to creep up to make up for the budget deficit, as it deals with the worst energy-industry downturn in years, albeit in stronger financial shape than many of its Canadian and international rivals that are making deep cuts to spending and staff numbers. Suncor is considering asset sales, and chief executive officer Steve Williams said the company can make further reductions to expenses "as warranted."

Analysts at Toronto-Dominion Bank and Barclays estimate Suncor's funding gap at $4-billion (Canadian) in 2016, a figure Mr. Williams did not dispute during a conference call to discuss fourth-quarter results. The company posted a loss of $2-billion after factoring in sizable writedowns and a foreign exchange charge.

"We don't particularly like it. It's tougher than we anticipated when we started, but our plan is – even at mid-$30s [U.S.] prices – to be able to take those two projects through to completion," Mr. Williams said.

Suncor and its partners are constructing the $13.5-billion (Canadian) Fort Hills oil sands development in Alberta and the $14-billion Hebron development off the Newfoundland coast. Both are scheduled to start pumping crude in 2017. In fact, Suncor added to its stake in Fort Hills in 2015, buying a further 10 per cent from Total SA.

Mr. Williams said Suncor has no plans to cut its dividend – which it touted as a major draw for Canadian Oil Sands investors to tender to its bid – even as credit-rating agencies express nervousness about the industry's growing debt burden while crude prices remain well under levels of 18 months ago.

Many of its industry peers have relented and cut payouts to investors as forecasters expect the price trough to persist at least through most of 2016. The downturn fuelled losses among Canadian and international oil producers alike, and fourth-quarter results are showing the strains.

On Thursday, ConocoPhillips, the U.S. oil major, chopped its dividend for the first time in a quarter-century and reduced capital spending by 17 per cent to $6.4-billion (U.S.). The company reported a fourth-quarter loss of $3.5-billion or $2.78 a share.

Royal Dutch Shell PLC reported its quarterly profit slid 56 per cent to $1.8-billion and said it plans further cost cuts. Among major moves, it postponed a go-ahead decision for its multibillion-dollar LNG Canada project proposed for the B.C. coast.

Oil sands developer MEG Energy Corp. halved its planned 2016 capital spending to $170-million (Canadian) on Thursday as it reported a fourth-quarter loss of $297-million or $1.32 a share, compared with last year's loss of $150-million or 67 cents.

Suncor said it cut its 2016 capital spending budget by 10 per cent from its November figure to a range of $6-billion to $6.5-billion. But it did not reduce its production forecast as a result.

During 2015, Suncor cut its workforce by a net 1,700 people, which was above the initial target of 1,000, Mr. Williams said.

Despite the expected funding shortfall this year as it works to complete its major new projects, Suncor "is in the enviable position of having the balance sheet to support these spending levels," TD Securities analyst Menno Hulshof said in a note to clients.

In the fourth quarter, the company reported a loss of $2-billion or $1.38 a share, compared with a year-earlier profit of $84-million or 6 cents. The loss included $1.6-billion of non-cash impairment charges and a foreign exchange loss of $382-million on its U.S.-dollar denominated debt.

The company reported an operating loss of $26-million or 32 cents a share, compared with operating profit of $386-million or 27 cents in the same period in 2014.

The deadline for tendering shares to Suncor's offer for Canadian Oil Sands is Friday. The bid turned friendly last month after Suncor agreed to sweeten the share exchange ratio.

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