Back to top

Image: Bigstock

Suncor (SU) Projects C$425M White Rose Asset Write-Down for Q4

Read MoreHide Full Article

Suncor Energy (SU - Free Report) recently informed that it envisions a non-cash after-tax impairment charge of about C$425 million for the fourth quarter of 2020 on its share of the White Rose asset and the West White Rose Project.

The write-down follows the recent acquisition of Husky Energy, the initial operator of the White Rose asset and the West White Rose Project, by Cenvous Energy (CVE - Free Report) . This takeover deal makes the future of the West White Rose Project uncertain.

Meanwhile, various discussions are taking place between the chief operator and different scales of government regarding the fate of the project. The Government of Newfoundland and Labrador decided to help the West White Rose Project this year.

The West White Rose Project is located in the Jeanne d’Arc Basin, 350 kilometers to the east of Newfoundland and Labrador at a water depth of 120 meters. The project was estimated to produce 200 million barrels (gross) of crude oil and expand the longevity of the White Rose field by nearly 14 years.

Despite the write-down, Suncor sticks to its recently-released capital budget and production guidance for 2021 wherein it expects its output to increase next year as it presumes commodity prices and demand to improve from the pandemic slumps.

Suncor expects its average upstream production for 2021 in the range of 740,000-780,000 barrels of oil equivalent per day (Boe/d), approximately 10% higher than the midpoint of the 2020 guided range.

For the current year, this Alberta-based integrated player’s total capex is anticipated in the range of C$3.8-C$4.5 billion, higher than 2020's guided range of C$3.6-C$4 billion. The capex view remains unaffected as the company did not include any major capex stipulated for the West White Rose project in 2021.

Company Profile

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

Zacks Rank & Key Picks

Suncor currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are DCP Midstream Partners, LP (DCP - Free Report) and Altus Midstream Company (ALTM - Free Report) , presently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>