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Suncor Energy (SU) Stops Fort Hills Operations After a Mishap

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Suncor Energy Inc. (SU - Free Report)  suffered a massive setback recently as two workers of Clearstream Mining died at its Fort Hills oil sands mine.

The fatal incident occurred when a bulldozer knocked a light vehicle truck, killing two miners eventually. Notably, the truck provides mining services at Fort Hills. Both the deceased were inside the pickup truck at the time of the collision. The company halted the operations at the site for an indefinite period as the probe into their deaths is ongoing.

The Fort Hills open-pit mine plan, which is one of the largest in the Wood Buffalo region in Alberta,has two main pits and a mine fleetwith a capacity to produce up to 14,500 tonnes of oil sand per hour.

Fort Hills has three joint owners under the Fort Hills Energy LP consortium, comprising three co-owners, namely Suncor Energy with 54.11% interest, TOTALSE (TOT - Free Report) with 24.58% stake and Teck Resources Ltd. (TECK - Free Report) holding 21.31% interest.

Last month, Suncor Energy released its capital budget and production guidance for 2021 and expects its output to increase next year as it presumes commodity prices and demand to improve from the pandemic slumps.

The company’s production from its stake in Fort Hills is projected in the range of 65,000-85,000 BPD, indicating a 20% rise from the midpoint of the 2020 guided range. Meanwhile, Fort Hills’ cash operating costs are estimated in the $25-$29 per barrel band, nearly 20% below the midpoint of the 2020 outlook.

Company Profile

Founded in 1917, Suncor Energy is Canada's premier integrated energy company. Its operations include oil sands development and upgrade; conventional and offshore crude oil and gas production; petroleum refining and product marketing. The company is one of the largest owners of oil sands in the world.

Zacks Rank & Key Pick

Suncor Energy currently carries a Zacks Rank #3 (Hold). A better-ranked player in the energy space is DCP Midstream Partners, LP (DCP - Free Report) , presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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