Suncor Energy Inc. · TSX:SU
Suncor Energy — Q4 2012 Earnings Presentation
27 slides from Suncor Energy's earnings presentation, February 2013
Slide 1: Growth Integration Value Creation
Growth Integration Value Creation Investor Information February 2013 1
Slide 2: Legal notice
Legal notice Forward-Looking Statements - This investor presentation contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislati
Slide 3: Legal notice (Continued)
Legal notice (Continued …) ROCE — Return on Capital Employed (ROCE) for the years ended December 31, 2012 and 2011 is defined and reconciled in the Non-GAAP Financial Measures Advisory section of Suncor’s Q4 Report to Shareholders dated February 5, 2013. ROCE for the years ended December 31, 2010 an
Slide 4: Contents
Contents Our company and resource 5-8 • Oil sands pioneer, ongoing leadership position Strategy 9 - 15 • Lower risk, oil sands focused growth • Optimized netbacks through integration Operations overview 16 - 22 • Operational excellence driving improved reliability and profitability Financial outlook
Slide 5: Our company and resource
Our company and resource SUNCOR
Slide 6: Canada's premier integrated energy company
Canada’s premier integrated energy company with an unparalleled resource base and growth opportunities What differentiates Suncor Over 34 years of production at current rates (2) Billions of Barrels of Oil Equivalent • Largest reserves in the oil sands(1) Contingent Resources (3) • Integrated model
Slide 7: Profitable portfolio of oil weighted assets
Profitable portfolio of oil weighted assets centred in oil sands with complementary upstream and downstream operations Circles are scaled to relative capacities. 7
Slide 8: Largest reserves in the oil sands
Largest reserves in the oil sands(1) monetized through a balanced portfolio of mining, in situ and upgrading(2) Millennium & North MacKay River In Situ Steepbank Extension Mine 30 kb/d of bitumen capacity 520,000 tonnes per day of ore capacity 100% working interest 100% working interest Syncrude Min
Slide 9: Strategy
Strategy SUNCOR 9 ENERGY
Slide 10: Rich suite of upstream growth opportunities
Rich suite of upstream growth opportunities capital discipline and balanced growth to optimize value Planned Net Expected Production Capacity kbpd Timing 8% annual Firebag Stages 1-4 180 Stage 4 ramping up Golden Eagle In Flight growth target 16 2014/15 first oil Hebron 34 Q4 2017 first oil Fort Hil
Slide 11: Integrated model to deliver long-term shareholder value
Integrated model to deliver long-term shareholder value low-cost cash flow from conventional assets funds long-life assets To provide greater reliability and flexibility to our feedstock supplies, we produce bitumen through mining and in situ A staged approach to increasing crude oil production capa
Slide 12: Access to global market pricing
Access to global market pricing able to optimize value of our crude oil production Upstream Crude Market Exposure (1) Production 4% 73% 4% WTI-based prices WTI- 65% based prices 4% mid-stream logistics Inland Western added over $1 of earnings per Canada inland barrel in 2012(2) 96% 91% Global-based
Slide 13: Current and planned market access
Current and planned market access(1) pipeline projects that are in-flight or proposed Enbridge Gateway Project Enbridge Mainline Expansions 2019 estimated in service Enbridge Flanagan South 2013 to 2017 estimated in service 525 kb/d estimated volume 2014 estimated in service Additional 500 kb/d ex-A
Slide 14: Technology is fundamental to how we do business
Technology is fundamental to how we do business up to $200 million invested annually in R&D Promising in situ technologies (impact base assets) - Surfactant Pilot - Solvent Extraction - Steam-Quality Technology - Membrane De-Oiling and Water Treatment - Non-Condensable Gas Co-Injection Transforming
Slide 15: Working collaboratively on sustainability
Working collaboratively on sustainability broad recognition for sustainability achievements and CSR reporting Industry Leadership • Co-founded OSLI (2009), OSTC (2010) and COSIA (2012) • Co-founded OSDG (2000) and CEMA (2003) Performance Awards & Recognition • Winner of the President’s Award in the
Slide 16: Operations overview
Operations overview SUNCOR rr <
Slide 17: Production overview
Production overview greater than 90% crude oil-weighted production expected in 2013 2012 2013 Actual Production Production Outlook Oil Sands (bpd) 325,000 350,000 — 380,000 Syncrude (bpd) 34,000 34,000 — 38,000 North America Onshore (boe/d) 54,000 41,000 — 46,000 East Coast Canada (bpd) 46,000 55,00
Slide 18: Oil Sands operations set new production records
Oil Sands operations set new production records operational excellence programs driving improved reliability Mine Production Extracted Bitumen Upgraded Production (millions tonnes) (kbpd) (kbpd) 30 600 350 500 300 250 20 400 200 300 150 10 200 100 100 50 0 0 0 2008 2009 2010 2011 2012 2008 2009 2010
Slide 19: In Situ operations leading Suncor's growth
In Situ operations leading Suncor’s growth demonstrated track record of growth Exceptional portfolio of projects and properties In Situ production continues to ramp up ● Reliable and growing production 150 Firebag 34% CAGR(2) 125 MacKay River since 2002 ● Firebag Stage 4 delivered under budget, ahea
Slide 20: Exploration & Production – high quality asset base
Exploration & Production – high quality asset base diversifies cash flow and provides exposure to global pricing E&P production, cash flow and earnings • Conventional low cost production Operating earnings (1) Cash flow from operations (1) • Largely Brent-based pricing 50 400 • Reduces Suncor’s aver
Slide 21: Exploration & Production—Hebron project sanctioned
Exploration & Production—Hebron project sanctioned Suncor’s 4th joint venture mega-project off Newfoundland & Labrador Hebron Project Conceptual rendering of Hebron top sides and fixed gravity • ExxonMobil developer and operator based structure • 150 kb/d facility capacity (gross) • Late 2017 planne
Slide 22: Refining & Marketing—optimizing the oil sands barrel
Refining & Marketing—optimizing the oil sands barrel industry leading performance R&M Net Earnings (1) (US dollars per barrel of capacity) Edmonton Refinery (140 kb/d) # Suncor - 100% oil sands integration -35 kb/d heavy feedstock 20 (# rank among peers(2)) Sarnia Refinery (85 kb/d) - approximately
Slide 23: Financial outlook
Financial outlook 23 ENER
Slide 24: Stable operating costs
Stable operating costs targeting $35 per barrel or less in oil sands cash operating costs (1) Oil Sands Cash Operating Costs Unscheduled downtime ($C/bbl) OPEX U2 Turnaround 50 OPEX assuming normal production (2) 40 $35/bbl 30 Our goal is to continuously reduce costs to absorb inflation through: 20
Slide 25: 2013 Capital expenditure outlook
2013 Capital expenditure outlook $7.3 billion in capital spending • 45% growth focused • Expect to fund capital spending from cash flow 2013 Outlook Sustaining Capital Growth Capital $ millions $ millions $ millions Oil Sands 4,195 2,960 1,235 Oil Sands 3,110 2,540 570 Oil Sands Ventures 1,085 420 6
Slide 26: Financial strength
Financial strength disciplined and focused strategy to deliver shareholder value Balance sheet discipline Focused on higher capital returns 2011 2012 ROCE Excluding major projects in progress(1) 15 ROCE Including major projects in progress(1) Net debt / cash flow from operations(1) 0.7X 0.7X Hashed
Slide 27: Dividends and share repurchases
Exercising capital discipline generating free cash flow and returning more cash to shareholders Significant free cash flow Significant dividend growth • 2013 capital spending of $7.3 billion is expected to be • 23% dividend CAGR(2) over past five years below cash flow(1) Value-driven share repurchas