Suncor Energy Inc. · TSX:SU
Suncor Energy — Q3 2023 Earnings Presentation
25 slides from Suncor Energy's earnings presentation, Nov 9, 2023
Slide 1: Investor Information Q3 2023
SUNCOR ENERGY Investor Information Q3 2023 Published November 8, 2023 SUNCOR ENERGY
Slide 2: Suncor's value proposition
Suncor’s value proposition Long-life, Physical Disciplined Innovation competitively integration investment & and advantaged and business- cost responsible assets line synergies management growth Deliver superior long-term shareholder value SUNCOR ENERGY 2
Slide 3: Suncor key statistics
Suncor key statistics Market capitalization Q3 2023 $61B Net debt to AFFO Q3 2023 TTM 1.0x Oil sands reserve life index 2022 26 yrs Upgrading capacity 556 mbpd Refining capacity 466 mbpd Production to Market Q3 YTD 725 mbpd Refinery utilization Q3 YTD 88% AFFO Q3 YTD $9.3B Capital expenditures Q3 YT
Slide 4: Strong balance sheet & industry leading cash returns
Strong balance sheet & industry leading cash returns1 Industry leading integrated model cash generation Strong track record of cash returns (C$ billion) $20 ~60 %(lessofsustaining 10yr cumulative AFFO capex) returned to shareholders $15 Top Tier ~$5/share Cash yield5 AFFO $10 TTM2 AFFO Mid (less sus
Slide 5: Disciplined capital allocation
Disciplined capital allocation1 O R D E R O F P R I O R I T Y Annual AFFO Allocation Net Debt (incl. ~$3B cap leases) Sustaining Economic Share Buyback / Net Debt Reduction Dividend3 ($ billion) Capital2 Capital2 (annualized %) 12 – 15 50 / 50 ~$2.2 ~$3.4 $2.08/ share 9 – 12 billion 75 / 25 billion
Slide 6: Physical integration to maximize value of every barrel
Physical integration to maximize value of every barrel Deep regional Oil Sands integration ~26 year Oil Sands Reserve Life Index ~25 mmbbl storage Western Canada Brent (E&P) Brent (E&P) ~15 mmbbl storage Eastern Canada Gasoline Diesel & National wholesale Jet & retail network ~80% Value Bitumen upli
Slide 7: No exploration risk and ~7 Bboe of 2P reserves
No exploration risk and ~7 Bboe1 of 2P reserves Production Mix2 Decline Reservoir Recovery (2023E) rate risk factor E&P ~15% decline Mining Very low Very low Very high Oil Sands Operations Syncrude ~0% mining decline In Situ Low Low High ~0% decline & ~12% In Situ decline Fort Hills Offshore Medium
Slide 8: Integrated footprint of oil sands assets
Integrated footprint of oil sands assets Strategy – maximize margins & keep upgraders full (90% utilization) • Optionality from multiple oil sands assets (mining & SAGD) • All sites are connected by pipeline: • Firebag & MacKay River – Base Plant • Syncrude – Base Plant • Fort Hills – Base Plant Clo
Slide 9: Upstream oil sands operations
Upstream oil sands operations Suncor has a long history of improving operational reliability, now focused on mining Upgrading and Mining Assets In Situ Assets (2018 - 2022) (2013 - 2022) • Base Plant upgrader utilization steadily increased to • Combined average of >90% utilization over the past 10 ~
Slide 10: Downstream advantage – industry best utilization & profitability
Downstream advantage – industry best utilization & profitability Refinery utilization vs. industry Industry leading profitability during pandemic2 Percent of refining capacity 2020 R&M (excluding rack forward) EBITDA per barrel Suncor US Average1 Cdn Average1 Full turnaround at 100 the Edmonton $10
Slide 11: Our GHG emissions objective – net zero by 2050
Our GHG emissions objective – net zero by 20501,2 GHG reduction opportunities to 2030 10 Mt per year reduction by 20301,2 Base business Contributing to Suncor’s net-zero goal Value chain Reducing our customer’s footprint • Reduce our own emissions through energy efficiency, fuel switching and CCUS C
Slide 12: Sustainability leadership
Sustainability leadership 1995 2000 2005 2010 2015 2016 2017 2018 2019 2020 2021 2022 First First Set four Set long- First climate risk report Completed Canada’s Invested in CCUS environment renewable long-term term carbon first coast-to-coast EV technology with report energy environmental and socia
Slide 13: 2023 capital budget
2023 capital budget1 ECONOMIC $millions Q1 Q2 Q3 Rem 2023 2023 Total INVESTMENT CAPITAL2 Decline mitigation 270 307 250 ~265 – 365 ~1,100 – 1,200 Investing in projects E&P 174 240 177 ~135 – 185 ~725 – 775 to improve efficiency, flexibility & resilience In Situ well pads 96 67 73 ~130 – 180 ~375 – 4
Slide 14: 2023 capital & production guidance
2023 capital & production guidance1 CAPITAL EXPENDITURES PRODUCTION & OPERATING COSTS Capital2 Economic Production4 Cash Operating Costs ($ millions) Investment3 (boepd) ($/bbl) Oil Sands 3,625 – 3,875 30% Oil Sands Operations 385,000 – 425,000 $30.00 – $33.00 E&P 725 – 775 100% Fort Hills (68.76% W
Slide 15: Appendix
SUNCOR ENERGY Appendix 15 202003-038
Slide 16: Oil sands energy sources
Oil sands energy sources *All values net to Suncor Mining & upgrading Base - Millenium & North Steepbank Base Plant Upgraders 2022 bitumen production: 257 kbpd 2022 SCO & diesel production: 315 kbpd Suncor WI 100% 350 kbpd capacity 954 mmbbls 2P reserves1 Suncor WI 100% Syncrude – Mildred Lake & Aur
Slide 17: Offshore with ~265 million barrels of 2P reserves
Offshore with ~265 million barrels of 2P reserves1 *All values net to Suncor Hibernia Terra Nova ExxonMobil operated Suncor Energy operated Suncor WI 20% Suncor WI 48% 2022 production: 15 mbbls/d 32 mmboe 2P reserves1 61 mmboe 2P reserves1 White Rose Hebron Cenovus operated ExxonMobil operated Sunco
Slide 18: Refining advantage
Refining advantage ~40% equity feedstock & ~100% inland crude Feedstock advantages2 Product advantages2 Edmonton Directly connected to Oil Sands Large market reach with international export 1 production; ability to process multiple capability via tidewater; in-line product blending 146 mbpd crude ty
Slide 19: Refined product markets
Refined product markets ~555 mbpd Product sales in 20221 ~20% Edmonton refinery services Canadian region from BC to consumer fuel Ontario Montreal and market2 Sarnia have a local market reach over 22mm people5 ~325 Export capability to US Wholesale Cardlock Pacific NW Locations3 ~1,590 Commerce City
Slide 20: Suncor 5-2-2-1 Index
Suncor 5-2-2-1 Index To help investors and analysts model Suncor’s Refining and Marketing (R&M) business, we have designed an indicative 5-2-2-1 gross margin based on publicly available pricing data. This is a single value that incorporates refining, product supply and rack forward businesses, but e
Slide 21: R&M gross margin calculation example – Q1 2019
R&M gross margin calculation example – Q1 2019 FIFO1 impact calculation example – Q1 2019 Q4 2018 Q1 2019 Dec-18 49.00 70% 34.30 Dec-19 58.15 70% 40.71 WTI ($US/bbl) 60% 30.79 60% 34.32 Nov-18 56.70 30% 17.01 Nov-19 55.00 30% 16.50 Dec-18 6.00 70% 4.20 Dec-19 48.20 70% 33.74 WCS ($US/bbl) Nov-18 11.
Slide 22: First-in, first-out (FIFO) inventory gains and losses
First-in, first-out (FIFO) inventory gains and losses Crude & products inventory & timing 45 The amount of time between purchase of feedstock to sale of refined product has direct correlation to FIFO impact Edmonton Commerce City Montreal / Sarnia Average (~ 1.5 months) Average number of days Crude
Slide 23: Advisories
Advisories Forward-Looking Statements – Forward-Looking Statements – This which may affect the company’s ability to distribute products to Adjusted funds from operations is calculated as cash flow provided presentation contains certain “forward-looking statements” within market; the timely receipt o
Slide 24: Slide Notes
Slide Notes Slide 4 -------------------------------------------------------------- Slide 11 ------------------------------------------------------------- Subject to change. Impacts have been factored into annual (1) Based on company’s current business plans and the current (1) See Suncor’s 2023 Repo
Slide 25: Investor relations contacts
Investor relations contacts Troy David Christian Matilda Stacey Little Johnson Leung Lo Hunter Vice President IR Director IR Manager IR Manager IR Coordinator IR trlittle@suncor.com davjohnson@suncor.com chrileung@suncor.com mkragulj@suncor.com sthunter@suncor.com Visit us at the Investor Centre on