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Suncor Energy Cuts 2016 Output Projection After Wildfire
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Canada’s premier integrated energy company Suncor Energy Inc. (SU - Free Report) has come up with its new production guidance wherein it lowered the 2016 output projection. The guidance cut follows the massive Canadian wildfire that has affected the company’s production the most.
Extent of Cut
Suncor anticipates 2016 total production in the range of 585,000–620,000 barrels of oil equivalent per day (BOE/D), down from the prior guidance of 620,000–665,000 BOE/D. Of the latest total annual output guidance, oil sands production is expected between 375,000 Bbl/d and 395,000 Bbl/d.
Recovery Underway
The company’s operations are being ramped up following the wildfire. In fact, Suncor is anticipated to come back to normal production by June end. The base plant of Suncor will likely return to the pre-fire level within seven days whereas by the third week of this month the company’s drilling activities will likely get back to the normal rate. Moreover, management said that the consortium of Syncrude oil sands mining has decided to restart operations by late June. In Syncrude, Suncor has a 53.74% stake while the world’s largest publicly traded oil company, Exxon Mobil Corporation (XOM - Free Report) holds a 25% interest.
It is to be noted that Suncor has maintained its prior guidance for 2016 oil sand cash operating cost at C$27–C$30 per barrel although the company had to combat the wildfire with much of its production getting hurt. This is because the integrated player saved its variable expenses that offset the increased cost to fight the wildfire. However, due to the time taken to commence production, the company’s 2016 Syncrude cash operating costs rose to C$41–C$44 per barrel from the earlier projection of C$35–C$38 a barrel range.
Zacks Rank & Key Picks
Calgary, Alberta-based Suncor Energy currently carries a Zacks Rank #4 (Sell), implying that it will underperform the broader U.S. equity market over the next one to three months.
Some better-ranked players in the energy sector are McDermott International Inc. and North Atlantic Drilling Limited . Both stocks sport a Zacks Rank #1 (Strong Buy).
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Suncor Energy Cuts 2016 Output Projection After Wildfire
Canada’s premier integrated energy company Suncor Energy Inc. (SU - Free Report) has come up with its new production guidance wherein it lowered the 2016 output projection. The guidance cut follows the massive Canadian wildfire that has affected the company’s production the most.
Extent of Cut
Suncor anticipates 2016 total production in the range of 585,000–620,000 barrels of oil equivalent per day (BOE/D), down from the prior guidance of 620,000–665,000 BOE/D. Of the latest total annual output guidance, oil sands production is expected between 375,000 Bbl/d and 395,000 Bbl/d.
Recovery Underway
The company’s operations are being ramped up following the wildfire. In fact, Suncor is anticipated to come back to normal production by June end. The base plant of Suncor will likely return to the pre-fire level within seven days whereas by the third week of this month the company’s drilling activities will likely get back to the normal rate. Moreover, management said that the consortium of Syncrude oil sands mining has decided to restart operations by late June. In Syncrude, Suncor has a 53.74% stake while the world’s largest publicly traded oil company, Exxon Mobil Corporation (XOM - Free Report) holds a 25% interest.
It is to be noted that Suncor has maintained its prior guidance for 2016 oil sand cash operating cost at C$27–C$30 per barrel although the company had to combat the wildfire with much of its production getting hurt. This is because the integrated player saved its variable expenses that offset the increased cost to fight the wildfire. However, due to the time taken to commence production, the company’s 2016 Syncrude cash operating costs rose to C$41–C$44 per barrel from the earlier projection of C$35–C$38 a barrel range.
Zacks Rank & Key Picks
Calgary, Alberta-based Suncor Energy currently carries a Zacks Rank #4 (Sell), implying that it will underperform the broader U.S. equity market over the next one to three months.
Some better-ranked players in the energy sector are McDermott International Inc. and North Atlantic Drilling Limited . Both stocks sport a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>