CALGARY – Suncor Energy Inc. (TSX:SU), Canada’s largest oilsands producer, posted a $341 million net loss during the first three months of 2015, when crude prices hovered around a meagre US$50 a barrel.
During the same period a year earlier, the Calgary-based company turned a net profit of about $1.49 billion.
Without unusual items in the mix, like foreign exchange impacts, Suncor posted $175 million in operating earnings, down sharply from $1.79 billion during the first quarter of 2014.
Suncor has updated its crude price forecast for 2015 — and it’s more pessimistic than the outlook it issued in January.
Suncor is expecting Brent crude, which refers to oil produced in the North Sea, to be US$60 a barrel this year, compared to its earlier forecast of US$65.
For West Texas Intermediate crude, the U.S. benchmark, it’s US$54 instead of US$59, while the outlook for Western Canadian heavy crude, calls for US$40 a barrel instead of US$42.
Suncor’s total output was 602,400 barrels of oil equivalent per day during the first quarter, compared to 545,300 barrels a year earlier.
Oilsands operations churned out 440,400 barrels a day, versus 389,300 barrels. Cash operating costs in that segment of the business decreased by 20 per cent year over year.
Cash flow from operations was about $1.48 billion, down from $2.88 billion.
“Suncor’s ability to generate solid cash flow during the first quarter of 2015 demonstrates the strength of our integrated model and spending discipline in the current crude price environment,” said CEO Steve Williams.
“We produced sufficient cash flow during the quarter to fully fund our sustaining capital and dividend, in addition to funding well over half of our growth capital.”
Work is underway on the Suncor-led Fort Hills oilsands mine north of Fort McMurray, Alta. The $13.5-billion project remains on budget and is on track to start in 2017 as planned.
Getting enough good workers can be a challenge for oilsands players during boom times, but Williams said that situation is improving as activity slows in northeastern Alberta.
“We are starting to see an increase in the labour supply and productivity in the Fort McMurray region.”
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