Suncor Energy Inc. · TSX:SU
Suncor Energy — Investor Presentation (March 2010)
29 slides from Suncor Energy's investor presentation, March 2010
Slide 1: Continuing to Deliver Shareholder Value
Continuing to Deliver Shareholder Value Investor Information March 2010
Slide 2: Legal Notice
Legal Notice This investor presentation contains certain forward-looking statements, including statements about Suncor’s growth strategy and expected future production, operating and financial results that are based on Suncor’s current expectations, estimates, projections and assumptions that were m
Slide 3: About Suncor
About Suncor • Canada’s premier integrated energy company • C$58 billion market capitalization* • 27 billion barrels equivalent of remaining recoverable resources** - 23 billion barrels of oil sands - 4 billion other barrels • Q4/09 production = 638 boe/d (approx. 50% oil sands, 50% other) • Unique
Slide 4: Market capitalization US$ billion
3 Market capitalization US$ billion 0 20 40 60 80 100 120 140 160 180 200 Exxon Mobil 324 BP * As of December 31st, 2009 Chevron Total Petrobras super majors Royal Dutch Shell Eni StatoilHydro ConocoPhilips Occidental Suncor Lukoil Canadian Natural BG Group Apache Imperial Oil Devon Repsol Positione
Slide 5: The Suncor strategy
The Suncor strategy A staged approach to increasing crude oil production capacity allows Suncor to better manage capital costs and incorporate new ideas and new technologies into To provide greater reliability and flexibility to our facilities. our feedstock supplies, we produce bitumen through mini
Slide 6: Attractive growth profile
Attractive growth profile Potential compound annual capacity growth to 2020* • While the timeline for asset divestments Suncor overall 7-8% remains flexible, Suncor expects most of Oil sands 10-12% the sales to occur during 2010, marking 2011 as the base year for overall Suncor production growth • 7
Slide 7: Strategic objective
Strategic objective Grow oil sands capacity 10 - 12% per annum through 2020 while reducing environmental footprint • Profitable oil sands growth • Reduce overall cost base safely & reliably • Reduce environmental footprint • Strengthen financial position 6
Slide 8: Significant oil sands resources
Profitable oil sands growth Significant oil sands resources • Attractive assets provide portfolio options and capital synergies • 2009 reserves and resources 23 billion barrels* Proved & Probable, 6 billion Other barrels Contingent Resources, 17 billion barrels * Reserves and resources information i
Slide 9: Phased oil sands growth
Profitable oil sands growth Phased oil sands growth • Strategic objective to grow capacity by 10 – 12% per annum • Projects sequenced to deliver highest rates of return, near-term cash flow and lowest risk within our portfolio • Firebag Stage 3: planned first oil Q2/11* • Firebag Stage 4: planned fi
Slide 10: Oil sands long-term growth plan
Profitable oil sands growth Oil sands long-term growth plan • CAGR* potential 10-12% th • Reserve life index >50 years based on grow Potential Projects: re current production f utu MacKay River Expansion Firebag Stages 5 & 6 Fort Hills Meadow Creek Lewis Voyageur South Voyageur Upgrader Firebag Stag
Slide 11: Operating synergies from merger
Reduce overall cost base safely & reliably Operating synergies from merger* • Initial forecast: $300 million per year • Current forecast: $400 million+ per year • Operating synergies identified and triggered since August 1st • Workforce rationalization • Supply chain initiative • Crude & product opt
Slide 12: Capital synergies from merger
Reduce overall cost base safely & reliably Capital synergies from merger* • Current forecast: $1 billion per year • Increased financial flexibility allows earlier investments in high return oil sands projects • Increased technical and project execution expertise • Pipeline and infrastructure integra
Slide 13: Operational excellence – Oil Sands
Reduce overall cost base safely & reliably Operational excellence – Oil Sands Oil Sands Cash Operating Costs Continued emphasis on: 40 $38.50 $33.95 • Increasing production volumes 35 30 $27.80 • Reducing cash costs 25 $21.70 • Personal and process safety C$/bbl 20 and reliability 15 10 5 - 2006 200
Slide 14: Operational excellence – East Coast Canada & North Sea
Reduce overall cost base safely & reliably Operational excellence – East Coast Canada & North Sea Low cost offshore oil production East Coast Cash Operating Costs North Sea Cash Operating Costs 12 12 $11.11 $10.56 $9.76 $10.01 $9.78 10 10 $7.71 8 8 C$/bbl C$/bbl $5.92 6 6 $4.86 4 4 2 2 - - 2006 2007
Slide 15: Environmental management
Reduce environmental footprint Environmental management • Water use • Reduced absolute water use by more than one-third since 2002 • Approximately 90% of water recycled at in-situ operation • Edmonton refinery water use supplied by municipal grey water • Climate change • Oil sands CO2 intensity redu
Slide 16: Tailings Reduction Operations (TRO)
Reduce environmental footprint Tailings Reduction Operations (TRO) * http://www.suncor.com/tailings • Reduces need to build more tailings ponds as MFT will be consumed more quickly than it is generated • Anticipate shorter time to reclamation – reclaimable surface 10 years after initial disturbance
Slide 17: Renewable energy
Reduce environmental footprint Renewable energy • Four wind power projects with a total generating capacity of 147 megawatts offsetting equivalents of 284,000 tonnes CO2 per year • The St. Clair Ethanol Plant has a current capacity of 200 million litres per year, with a $120 million expansion underw
Slide 18: Financial objectives
Strengthen financial position Financial objectives • Targeted ROCE* of 15% in Oil Sands division at US$70 WTI • Grow long-life oil sands assets and divest non-core assets • Strong balance sheet • Manage down debt to $10 billion through asset sales and free cash flow • Target 2.0x debt to cash flow f
Slide 19: Current financial position
Strengthen financial position Current financial position • Net debt at year end 2009 – $13.4 billion • Debt rating – Investment Grade • Moody: Baa2 Stable • S&P: BBB + • DBRS: A (low) Stable • Near-term debt maturity • Cdn $500 million in 2011 • US $300 million in 2013 • US $400 million in 2014 18
Slide 20: Planned asset divestitures
Strengthen financial position Planned asset divestitures • 104 retail sites in Ontario • 98 sold to Husky – target 2010 close • 300 mmcfe/d natural gas assets • Purchase & sale agreements signed for a total of C$907M in proceeds to date - US Rockies assets sold to Noble Energy – closed March 2010 -
Slide 21: 2010 capital budget – $5.5 billion
Outlook 2010 capital budget – $5.5 billion • Get started on growth $1.5 billion • Optimize sustaining capital $4 billion • Spend profile is consistent with key priorities for cost reduction, improved environmental performance, debt repayment and staged capital growth Growth Capital $M Sustaining Cap
Slide 22: 2010 planned turnarounds
Outlook 2010 planned turnarounds Q1/10 Nil Q2/10 Upgrader 2* – 45 days Terra Nova – 18 days Hibernia – 12 days Buzzard – 14 days Triton – 14 days De Ruyter – 14 days Hanze – 7 days Q3/10 Upgrader 2** – 35 days White Rose – 20 days Triton – 21 days Buzzard – 7 days Q4/10 Terra Nova – 10 days * Produc
Slide 23: Delivering value
Delivering value $8,000 Return on investment $7,000 Based on $100 invested March 18, 1992 assuming reinvestment of dividends $6,000 $4,970 $5,000 $4,000 $3,142 $3,000 $2,000 $1,000 $- 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 S&P 500 Suncor Energy From
Slide 24: Supplemental Information
Supplemental Information 23
Slide 25: Market capitalization US$ billion
24 Market capitalization US$ billion 0 10 20 30 40 50 60 70 80 90 * As of December 31st, 2009 Royal Bank Suncor TD Bank Bank of Nova Scotia CNRL Barrick Research in Motion Imperial Oil Manulife Potash Corp Bank of Montreal Goldcorp Canadian National Thomson Reuters CIBC EnCana Husky TransCanada TSX
Slide 26: Upstream businesses support oil sands growth
Upstream businesses support oil sands growth • Natural Gas • Divesting substantial number of assets to improve efficiencies • Move from exploration to execution-driven to become low cost producer • East Coast Canada and North Sea • Support attractive projects to manage natural declines • Provides su
Slide 27: Downstream integration
Downstream integration 135 kbd • Approximately 443,000 bpd of refining capacity • Higher than average complexity • Current and future potential oil sands integration volumes • Over 20% of the Canadian downstream market 26
Slide 28: Environmental strategies and initiatives
Environmental strategies and initiatives • Continue to invest in renewable energy • Continue with operational excellence strategy • Continue to investigate emerging technologies such as geothermal and petroleum coke gasification • New performance goals implemented in 2009 • Reduce water intake by 12
Slide 29: SUNCOR
SUNCOR