Suncor Energy Inc. · TSX:SU
Suncor Energy — Merger or Acquisition (November 2015)
29 slides from Suncor Energy's merger presentation, Nov 10, 2015
Slide 1: Filed by Suncor Energy Inc. Pursuant to Rule 425
Filed by: Suncor Energy Inc. Pursuant to Rule 425 under the Securities Act of 1933, as amended Subject Company: Canadian Oil Sands Limited Form F-80 File No.: 333-207268 Explanatory Note: The following written presentation materials were first used by Suncor Energy Inc. on November 10, 2015. (Presen
Slide 2: Suncor's proposed acquisition of Canadian Oil Sands Limited
Suncor's proposed acquisition of Canadian Oil Sands Limited Building on 50 years of oil sands experience Information for Canadian Oil Sands Limited (COS) Shareholders – Dated November 10, 2015 All amounts in this presentation are in Canadian dollars (unless otherwise noted). Please review Advisories
Slide 3: Advisories
2 Advisories NOTICE TO U.S. HOLDERS The Offer (as defined herein) described in the Offer Documents (as defined herein) is being made for the securities of a Canadian issuer by a Canadian issuer that is permitted, under a multijurisdictional disclosure system adopted by the United States, to prepare
Slide 4: Advisories (continued)
3 Advisories (continued) OFFER DOCUMENTS This presentation does not constitute an offer to buy or sell, or an invitation or a solicitation of an offer to buy or sell, any securities of Suncor or COS. The exchange offer (the “Offer”) by Suncor to purchase the COS common shares and any accompanying ri
Slide 5: Advisories (continued)
4 Advisories (continued) All figures and descriptions provided herein related to the proposed transaction, including those around consideration, key metrics, pro forma ownership, reasons for the Offer, potential benefits to Suncor and COS shareholder and expected pro forma benefits are based on and
Slide 6: Advisories (continued)
5 Advisories (continued) RESERVES Unless noted otherwise, reserves information presented herein is presented as working interests (operated and non-operated) share before deduction of royalties and without including any royalty interests, is at December 31, 2014, and is rounded to the nearest hundre
Slide 7: Proposed transaction summary
6 Proposed transaction summary Consideration• Suncor is offering to acquire Canadian Oil Sands Limited (TSX: COS) in an all share transaction valued at approximately $6.9 billion 1 • Exchange ratio of 0.25 of a Suncor share per COS share • Implied acquisition price 2 of $9.73/COS share represents a
Slide 8: Why this Offer makes sense
7 Why this Offer makes sense • All share offer at a substantial share price premium Premium to October 2, 2015 close • Opportunity for cash dividend increase for COS shareholders Dividend • Suncor has a solid record of growth and sustainability • Elimination of redundant administration costs Savings
Slide 9: Suncor-COS discussion history
8 Suncor-COS discussion history Second COS $15 rejection letter $100 First Suncor - COS April 16 Implied offer value 2 of $9.73/share – Discussion a 57% premium to COS’ close on October 2, 2015 compared to a 24% March 6 increase in the four year futures strip (Dec. 2015 – 2019 average) $12 $80 COS l
Slide 10: Significant benefits
9 Significant benefits COS shareholder potential benefits Expected Pro Forma benefits 57% upfront premium 1 6.7% Production increase per Suncor share, pro forma 5 45% 2 $76,800 Competitive cost per flowing barrel 6 Tax- Deferred intended to enable tax-deferred rollover IncreasedIntegration and marke
Slide 11: Participate in Canada's leading integrated energy company
10 Participate in Canada’s leading integrated energy company Suncor - A growing business with complementary upstream & downstream operations $61B Enterprise value September 30, 2015 1 Fort Hills* Oil Sands 576 00099% oil production boe/d for the nine months ended Sep. 30, 2015 MacKay Syncrude Fireba
Slide 12: Suncor's business model is robust even with lower oil prices
11 Suncor’s business model is robust even with lower oil prices Cash flow is well in excess of dividends and sustaining capital 94% Nine months ended As at September 30, 2015 September 30, 2015 ($Billions) ($Billions) Upgrader utilization Nine months ended September 30, 2015 (excludes Syncrude) Cred
Slide 13: Suncor - A strong track record of returning cash to shareholders
12 Suncor - A strong track record of returning cash to shareholders quarterly dividend 29¢ 0.94 1.12 1.14 1.02 1.14 >20% year dividend CAGR 1 0.50 0.73 0.43 13 years 0.32 0.17 2011 2012 2013 2014 2015e Q1 2016e $5.3B -2014 Dividends per share 2 2 Repurchases per share >10% e = estimated $250million
Slide 14: Suncor has generated superior free cash flow
13 1 Suncor has generated superior free cash flow 1 Suncor free cash COS free cash flow 2 2 flow 1 per share per share Free cash flow 1 reconciliation Nine months ended Sept. 30 1.80 Suncor ($ millions) 2012 2013 2014 2015 1.76 Cash flow provided by operating activities 8 859 10 100 8 936 5 441 Incr
Slide 15: Dividend growth comparison
14 Dividend growth comparison 1 Five Year Dividend/Distribution Growth September 2010 to September 2015 200% 190% 100% 0% 1 Global peers -100% 2 -90% (1) Global peers in alphabetical order, not necessarily as they appear in the chart: Anadarko Petroleum Corporation, Apache Corporation, COS, Cenovus
Slide 16: Delivering for equity holders while maintaining a strong balance sheet
15 Delivering for equity holders while maintaining a strong balance sheet Five Year Total Shareholder Returns Net Debt to Capitalization 1 including reinvested dividends as at September 30, 2015 2 Suncor Suncor COS Suncor Pro Forma +15% TSX Capped 36% 17% 19% COS Energy Index -69% -32% Strong credit
Slide 17: Exposure to oil price upside
16 Exposure to oil price upside Suncor production Exposure to global oil price 1 Current SCO 60% Bitumen $114 $112 $112 99% 19% $103 $108 $109 $106 Oil $100 $99 Offshore $92 20% 2 Other 1% $72 1 Pro Forma SCO 66% $63 99% Bitumen 2012 2013 2014 2015 Nine months 16% ended September 30 Oil Offshore Sun
Slide 18: Larger, world class reserve base and expected production growth
17 Larger, world class reserve base and expected production growth Both companies have long-life, Suncor offers attractive production low decline reserves growth with the benefits of diversification Billions of Boe 1 Thousands of barrels per day Suncor Suncor4 570 7.5 2P 505 524 Offshore COS 454 Bit
Slide 19: Suncor brings strong operating experience
18 Suncor brings strong operating experience Operating experience in Upgrader utilization 50 Years the oil sands SCO barrels produced divided by 350,000 barrels per day 1 100% Suncor Largest Miner and upgrader 2 80% Largest In situ producer 3 60% Syncrude Most North American refiner 4 40% profitable
Slide 20: Benefits of integration from Suncor's downstream
19 Benefits of integration from Suncor’s downstream • Suncor’s downstream is an industry leader in profitability and reliability • The integrated business model has enabled Suncor to capture margins across the value chain and maximize the value of Oil Sands production • Integration mitigates crude o
Slide 21: Suncor is the largest operator in the oil sands
20 Suncor is the largest operator in the oil sands Fort Hills Firebag Syncrude Mackay River Millennium & Steepbank Voyageur Mines South Lewis Syncrude properties Suncor & other JV properties Brings strong operating experience to governance of Syncrude Board Experience and Management Committee Commit
Slide 22: Suncor is offering compelling value to COS shareholders
21 Suncor is offering compelling value to COS shareholders 1 • Substantial premium to pre-Offer Equity Value (+57%) 2 • Significant opportunity for cash dividend increase (+45%) with a track record of delivering increasing returns to shareholders • Participation in Suncor’s anticipated growth and sh
Slide 23: Current tender process, timing and instructions
22 Current tender process, timing and instructions (subject to change) • Offer open for 60 days, expiring December 4, 2015 • Registered COS shareholders wanting to benefit from the Offer must complete and deliver Letter of Transmittal and share certificates to Depositary • Beneficial (i.e. non-regis
Slide 24: Appendix
23 Appendix eee SuNcor )
Slide 25: Frequently asked questions
24 Frequently asked questions • Oil sands is at the very core of Suncor. We bring five decades of oil sands experience to the table. Is Suncor comfortable increasing its exposure to oil sands, • We have steadily improved the reliability and profitability of our own mining and upgrading operations wh
Slide 26: Syncrude Overview
25 Syncrude Overview • Located near Fort McMurray, AB, adjacent to Suncor Base Operations Operations • Operates oil sands mines and an upgrading complex • Produces a single high quality, light, sweet, synthetic crude oil (SCO) blend Products referred to as “Syncrude Sweet Premium” (SSP) • Syncrude C
Slide 27: Notes
26 Notes SuNcor )
Slide 28: Notes
27 Notes SuNcor )
Slide 29: Investor Relations Contacts
28 Investor Relations Contacts Steve Douglas Leigh MacComb Samantha Enns Vice President IR Analyst IR Associate IR Visit us at the Investor Centre on Suncor.com 1-800-558-9071 offer@suncor.com For additional information regarding the Offer, please visit: www.suncorofferforcanadianoilsands.com
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