Suncor Energy Inc. · TSX:SU
Suncor Energy — Q1 2012 Earnings Presentation
24 slides from Suncor Energy's earnings presentation, May 2012
Slide 1: Growth Integration Value Creation
Growth Integration Value Creation Investor Information May 2012 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 …) Oil Sands cash operating costs for the following quarters (3 months ended) are defined and reconciled in the following documents: (i) Q1 2012 and Q1 2011 – Non-GAAP Financial Measures Advisory section of Suncor’s MD&A dated April 30, 2012; (ii) Q4 2010 – Cash Operating Cos
Slide 4: Contents
Contents Our company and resource 5-7 • Oil sands pioneer, ongoing leadership position Strategy 8 - 13 • Lower risk, oil sands focused growth • Optimized netbacks through forward integration Operations overview 14 - 19 • Operational excellence driving improved reliability and profitability Financial
Slide 5: Canada’s premier integrated energy company
Canada’s premier integrated energy company with an unparalleled resource base and growth opportunities What differentiates Suncor Over 35 years of production at current rates (1) • Largest reserves in the oil sands* Billions of Barrels Contingent Resources (2) • Strategic balance between mining, 2P
Slide 6: Oil-weighted assets that provide strong cash flow
Oil-weighted assets that provide strong cash flow supports our integrated strategy and funds growth 6
Slide 7: Largest reserves in the oil sands
Largest reserves in the oil sands monetized through a balanced portfolio of mining, in situ and upgrading Joslyn Mine Fort Hills Mine FORT MacKAY Suncor properties Suncor-Total Joint Venture Suncor- joint properties Non-Suncor oil sands properties Voyageur Upgrader * * * * * Source: Government of Al
Slide 8: Strategy
SUNCOR ENERGY
Slide 9: Leveraging known resources for lower risk growth
Leveraging known resources for lower risk growth > 50% of production growth from in situ projects over this decade Production 1000 Planned Net Target Mboe/d Capacity kbpd First Oil Oil Sands Firebag 3 62.5 2011 Firebag 4 62.5 2013 800 Fort Hills(2) 67 2016 Suncor/Total Partnership Voyageur Upgrader(
Slide 10: In situ and mining projects
In situ and mining projects similar full-cycle economics Illustrative Comparison of Standalone Projects In Situ Bitumen Mined Bitumen WTI ($ per barrel) 70—90 70—90 Total Supply Cost ($ per barrel) 45—55 45—55 (initial and sustaining capital, opex, royalties and taxes discounted at 11%) Initial Capi
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 We produce natural gas as feedstock supplies, we produce bitumen through mining A staged approach to increasing crude oil p
Slide 12: Access to global market pricing
Access to global market pricing able to optimize value of our crude oil production Upstream Crude Downstream Approximate Production Refining Market Exposure (1) Feedstock 73% 7% WTI-based WTI- 66% prices based prices Oil Sands 93% Global-based refined product prices Refining & Marketing 27% 27% Bren
Slide 13: Technological innovation
Technological innovation improving economics and reducing environmental footprint Tailings Reduction OperationsTM TRO - Tailings Reduction OperationsTM are expected to reduce land use and speed land reclamation Innovative consumer products Higher quality bitumen Paraffinic Froth Treatment CIVITAS -
Slide 14: Operations overview
Operations overview SUNCOR ENERGY
Slide 15: 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) 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 2011 2
Slide 16: In Situ operations leading Suncor’s growth
In Situ operations leading Suncor’s growth 45% production increase anticipated in 2012 Exceptional portfolio of projects and properties In Situ growth led by Firebag and MacKay River Firebag 4-6, MacKay River 2, Meadow Creek, Lewis, Chard, Frontier 150 MacKay River Firebag Thousands of barrels per d
Slide 17: 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) Suncor Top quartile 15 Median of peers (2) Bottom quartile 10 5 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 -5 2009 2010 2011 2012 (1) Imperial and US-based companies r
Slide 18: Exploration & Production – highly quality asset base
Exploration & Production – highly quality asset base generating cash flow to fund oil sands growth E&P production, cash flow and earnings • Conventional low cost production Operating earnings (1) • Largely Brent-based pricing 50 400 Cash flow from operations (1) • Reduces Suncor’s average cash 40 Ca
Slide 19: 2012 Production outlook and turnaround summary
2012 Production outlook and turnaround summary > 90% crude oil production 2011 Production 2012 Production Actual (boe/d) Outlook (boe/d) Oil Sands 304,700 325,000 — 355,000 Syncrude 34,600 36,000 — 38,000 North America Onshore 64,700 52,000 — 57,000 East Coast Canada 65,600 50,000 — 55,000 Internati
Slide 20: Financial outlook
Financial outlook SUNCOR ENERGY
Slide 21: Stable operating costs
Stable operating costs targeting $35 per barrel or less in oil sands operating costs (1) Oil Sands Cash Operating Costs Unscheduled downtime ($C/bbl) OPEX U2 Turnaround 50 OPEX assuming normal $35/bbl production (2) 40 30 1 Reliability 20 2 Productivity 10 0 3 Technology Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q
Slide 22: 2012 Capital expenditure outlook
2012 Capital expenditure outlook $7.5 billion in capital expenditure - almost 50% growth focused 2012 Outlook Sustaining Capital Growth Capital Base $ millions $ millions $ millions Oil Sands 5,085 2,885 2,200 Oil Sands Base 1,780 1,555 225 In Situ 1,830 860 970 Oil Sands Ventures 1,475 470 1,005 E&
Slide 23: Financial strength
Financial strength disciplined and focused strategy to deliver shareholder value 1 Net debt under $6 billion (0.6 X cash flow) 2 Return on capital approaching 15% 12 Months Ended 12 Months Ended Return on Capital Employed(1) March 31, 2011 March 31, 2012 (Percent) Net debt / Excluding major projects
Slide 24: Delivering shareholder value
Delivering shareholder value disciplined and focused strategy to deliver shareholder value Returning Cash to Shareholders 1 Annual dividend raised 18% in Q2 2012 Dividends and share repurchases per share • 21% dividend CAGR over past five years Share Repurchases 1.25 Cash Dividends 1.00 2 Buy-back o