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The Suncor tar sands processing plant near the Athabasca River at their mining operations near Fort McMurray, Alberta, September 17, 2014.TODD KOROL/Reuters

Suncor Energy Inc. cut its budget for the second time this year even as it pledged to dole out more money to shareholders as the company reported a second-quarter profit.

Calgary-based Suncor said late on Wednesday it earned $729-million, or 50 cents a share, in the quarter ended June 30. That compares with a $341-million loss in the first quarter this year and a $211-million profit, or 14 cents per share, in the same period a year ago.

Operating earnings were $906-million, or 63 cents a share, down from $1.1-billion, or 77 cents a share, a year ago.

The results highlight the uncertainty that has engulfed even the largest oil sands producers after U.S. and world crude prices fell by more than half from $100 (U.S.) a barrel last year.

U.S. oil prices have retreated to under $50 a barrel in recent weeks amid concerns over shaky Chinese stocks and a strong U.S. dollar, raising the likelihood of additional cuts even as stockpiles show signs of ebbing and demand picks up. West Texas intermediate oil edged up 1.7 per cent Wednesday to close at $48.79 a barrel.

Suncor lowered its budget this year to $5.8-billion (Canadian) to $6.4-billion, from $6.2-billion to $6.8-billion previously, reflecting lower spending on oil sands operations and its exploration and production unit.

It now expects to spend between $1.95-billion and $2.2-billion on oil sands operations, instead of a target of $2.15-billion to $2.4-billion set out in April. Exploration and production spending will fall to $1.25-billion to $1.35-billion, from a target of $1.45-billion to $1.55-billion previously, the company said.

Suncor has already slashed 1,200 jobs from its payroll and chopped $1-billion from its 2015 budget this year. It also scrapped a share repurchase program in a bid to conserve cash.

Now, the company says it is reviving plans to buy back as much as $500-million worth of its own stock amid depressed energy markets. Suncor shares are down 7.3 per cent so far this year. The company also raised its quarterly dividend on Wednesday to 29 cents per share, from 28 cents a share previously.

In the quarter, Suncor said cash flow rang in at $2.1-billion, down from $2.4-billion in the same period a year ago.

Overall production rose to 559,900 barrels of oil equivalent per day, up from 518,400 oil-equivalent barrels in the year-ago period. Oil sands output jumped by 45,000 barrels per day to 423,800 barrels a day, from 378,800 barrels a year ago.

Suncor said its earnings included a $423-million deferred income tax charge related to Alberta's increased corporate tax rate of 12 per cent. The results also included an after-tax gain of $178-million on the revaluation of the company's U.S.-dollar denominated debt.

A year ago, the earnings were impacted by $1.2-billion in impairments tied partly to Suncor's Libyan assets as well as its stake in Total SA's deferred Joslyn mining venture.

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