Suncor Energy posts Q1 earnings beat as oil sands hits record quarterly output

Suncor Energy (NYSE:SU) -0.2% in Wednesday’s trading after posting better than expected Q1 adjusted earnings of C$1.41/share, C$0.17 above FactSet analyst consensus of C$1.24, helped by record oil sands production and strong demand for refined products.

Q1 net income fell to C$1.61B, or $1.25/share, from C$2.05B, or $1.54/share, in the year-earlier quarter, with the company citing higher oil sands sales volumes and refinery production, partially offset by lower price realizations and increased oil sands royalties.

Suncor (SU) said total upstream production rose 12.6% Y/Y to a Q1 record high 835.3K bbl/day, as oil sands output hit an all-time quarterly record 785K bbl/day, reflecting the increased working interest in Fort Hills and record Firebag production; the company said it maximized SCO production through an upgrader utilization of 102%, including a record 107% at Oil Sands Base, and 96% at Syncrude.

The company said it achieved its highest-ever Q1 refining throughput at 455.3K bbl/day, up 23.8% Y/Y, with refinery utilization rising to 98% from 79% in the year-earlier quarter, as well as record refined product sales of 581K bbl/day.

Suncor (SU) said it is leasing and operating a number of Aframax oil tanker ships to carry crude from the newly completed Trans Mountain pipeline expansion to Pacific markets.

“We’ve leased Aframax vessels that were operating in the Pacific, [which] gives us an advantage on shipping costs,” executive VP for downstream Dave Oldreive said on the company’s earnings conference call.

Jefferies analyst Lloyd Byrne says Suncor’s (SU) operational performance continues positive, and with no changes to guidance he expects investors will focus on areas such as progress toward operating cost targets, potential upstream options, and the agenda for the company’s business update on May 21.