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Suncor (SU) Anticipates Increased Production, CapEx for 2024
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Suncor Energy (SU - Free Report) , a Canadian energy company, anticipates higher production in 2024 compared with the year-ago level, driven by strong performance from its Fort Hills asset. The company also expects increased capital expenditures for 2024, with a focus on growth projects.
Let’s delve into the company's projections, strategies and challenges, providing a detailed outlook for investors and industry enthusiasts.
Suncor's 2024 Production Forecast
Suncor anticipates production to be in the range of 770,000-810,000 barrels per day (bpd) in 2024. This reflects a 7% increase from the company's 2023 production guidance. The main reason behind this is the robust performance expected from its Fort Hills asset.
Fort Hills Operational Challenges
Fort Hills, an open-pit mine vital to Suncor's operations, faced operational challenges since its initiation in early 2018. Despite these hurdles, SU remains persistent in its commitment to overcoming obstacles through a methodically planned three-year improvement program.
Capital Expenditure Projections
The company’s capital expenditure for 2024 is expected to be in the range of C$6.3-C$6.5 billion, surpassing the current-year forecast of C$5.4 billion-C$5.8 billion. This substantial investment emphasizes Suncor's dedication to enhancing its infrastructure and positioning itself for long-term success.
Fort Hills Improvement Plan
Last year, SU predicted a 5% reduction in gross production and higher operating costs per barrel at Fort Hills. This was part of the company’s long-term improvement plan for the project. Suncor confirms that the three-year improvement plan is on target, with promising opportunities to further increase value.
Cost Efficiency Measures
In a bid to maximize shareholder returns, Suncor aims to implement focused cost reductions. The company's Fort Hills cash operating costs for the next year are estimated to be in the band of C$33-C$36 per barrel. This particular cost management strategy aligns with Suncor's commitment to improving free funds flow per share.
CEO Rich Kruger's Vision
Suncor CEO Rich Kruger highlighted the company's commitment to enhancing shareholder returns through cost reductions, production growth and strategic capital investments, as reflected in its 2024 guidance.
Refining Utilization and Throughput
Apart from its upstream focus, Suncor projects a refining utilization rate of 92-96% in 2024, with throughput ranging between 430,000 bpd and 445,000 bpd. This diversification strategy showcases the company’s commitment to maintaining a balanced and resilient portfolio in a dynamic energy market.
Global Oil Market Dynamics
While global oil prices have scaled back compared with the previous year’s number, they remain at a level that allows companies, including Suncor, to drill profitably. Suncor's forward-looking approach takes into account the evolving dynamics of the oil market, positioning the company for sustainable growth amid market fluctuations.
Conclusion
Suncor’s 2024 forecast paints a promising picture of growth and resilience. By addressing operational challenges, implementing cost-efficient measures and diversifying its portfolio, it is poised to capitalize on opportunities in the energy sector.
The Williams Companies is valued at $45 billion. The company currently pays a dividend of $1.79 per share, or 4.84%, on an annual basis.
WMB, the U.S.-based energy infrastructure company, operates through Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services segments.
Oceaneering International is worth $2.08 billion. In the past year, its shares have risen 36.3%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
Liberty Energy is valued at $3.35 billion. LBRT currently pays a dividend of 20 cents per share, or 1.01%, on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to the North American onshore exploration and production companies.
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Suncor (SU) Anticipates Increased Production, CapEx for 2024
Suncor Energy (SU - Free Report) , a Canadian energy company, anticipates higher production in 2024 compared with the year-ago level, driven by strong performance from its Fort Hills asset. The company also expects increased capital expenditures for 2024, with a focus on growth projects.
Let’s delve into the company's projections, strategies and challenges, providing a detailed outlook for investors and industry enthusiasts.
Suncor's 2024 Production Forecast
Suncor anticipates production to be in the range of 770,000-810,000 barrels per day (bpd) in 2024. This reflects a 7% increase from the company's 2023 production guidance. The main reason behind this is the robust performance expected from its Fort Hills asset.
Fort Hills Operational Challenges
Fort Hills, an open-pit mine vital to Suncor's operations, faced operational challenges since its initiation in early 2018. Despite these hurdles, SU remains persistent in its commitment to overcoming obstacles through a methodically planned three-year improvement program.
Capital Expenditure Projections
The company’s capital expenditure for 2024 is expected to be in the range of C$6.3-C$6.5 billion, surpassing the current-year forecast of C$5.4 billion-C$5.8 billion. This substantial investment emphasizes Suncor's dedication to enhancing its infrastructure and positioning itself for long-term success.
Fort Hills Improvement Plan
Last year, SU predicted a 5% reduction in gross production and higher operating costs per barrel at Fort Hills. This was part of the company’s long-term improvement plan for the project. Suncor confirms that the three-year improvement plan is on target, with promising opportunities to further increase value.
Cost Efficiency Measures
In a bid to maximize shareholder returns, Suncor aims to implement focused cost reductions. The company's Fort Hills cash operating costs for the next year are estimated to be in the band of C$33-C$36 per barrel. This particular cost management strategy aligns with Suncor's commitment to improving free funds flow per share.
CEO Rich Kruger's Vision
Suncor CEO Rich Kruger highlighted the company's commitment to enhancing shareholder returns through cost reductions, production growth and strategic capital investments, as reflected in its 2024 guidance.
Refining Utilization and Throughput
Apart from its upstream focus, Suncor projects a refining utilization rate of 92-96% in 2024, with throughput ranging between 430,000 bpd and 445,000 bpd. This diversification strategy showcases the company’s commitment to maintaining a balanced and resilient portfolio in a dynamic energy market.
Global Oil Market Dynamics
While global oil prices have scaled back compared with the previous year’s number, they remain at a level that allows companies, including Suncor, to drill profitably. Suncor's forward-looking approach takes into account the evolving dynamics of the oil market, positioning the company for sustainable growth amid market fluctuations.
Conclusion
Suncor’s 2024 forecast paints a promising picture of growth and resilience. By addressing operational challenges, implementing cost-efficient measures and diversifying its portfolio, it is poised to capitalize on opportunities in the energy sector.
Zacks Rank and Key Picks
Currently, SU carries a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some better-ranked stocks like The Williams Companies (WMB - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Oceaneering International, Inc. (OII - Free Report) and Liberty Energy Inc. (LBRT - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies is valued at $45 billion. The company currently pays a dividend of $1.79 per share, or 4.84%, on an annual basis.
WMB, the U.S.-based energy infrastructure company, operates through Transmission & Gulf of Mexico, Northeast G&P, West and Gas & NGL Marketing Services segments.
Oceaneering International is worth $2.08 billion. In the past year, its shares have risen 36.3%.
The company provides engineered services and products, and robotic solutions to the offshore energy, defense, aerospace, manufacturing and entertainment industries worldwide.
Liberty Energy is valued at $3.35 billion. LBRT currently pays a dividend of 20 cents per share, or 1.01%, on an annual basis.
LBRT is a leading provider of hydraulic fracturing and other auxiliary services to the North American onshore exploration and production companies.