Suncor Energy Inc. · TSX:SU
Suncor Energy — Investor Presentation (November 2010)
22 slides from Suncor Energy's investor presentation, November 2010
Slide 1: Positioning for Long-Term Growth
Positioning for Long-Term Growth Investor Information November 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: Suncor Energy
Suncor Energy • World class growth opportunities: 10-12% in oil sands, 7-8% overall* • C$53 billion market capitalization** • ~ 27 billion barrels of oil equivalent of remaining recoverable resources*** – 23 billion barrels of oil sands – 4 billion other barrels • Key regulatory approvals for future
Slide 4: Highlights
Operational Update Highlights • Progress on merger integration has met or exceeded plan 1. Divestiture of non-core assets essentially complete • Signed PSAs* for ~ $3.5 billion in proceeds, prior to closing adjustments, out of a target of $2 to $4 billion 2. Majority of cashflow expected to be recei
Slide 5: Merger timeline
Operational Update Merger timeline Announced sale of Competition Ontario retail stations Bureau approval Announced sale of New organization Announced sale of The Netherlands and structure and U.S. Rockies assets Bearberry/Ricinus New executive employee roles assets team announced substantially in pl
Slide 6: The Suncor strategy
Strategy The Suncor strategy To provide greater reliability and We produce natural gas as flexibility to our feedstock supplies, A staged approach to increasing a natural price hedge we produce bitumen through mining against the cost of energy crude oil production capacity and in-situ recovery techn
Slide 7: Significant oil sands resources
Strategy Significant oil sands resources • Largest resource position in the Athabasca oil sands • Attractive assets provide portfolio options and capital synergies • 2009 remaining recoverable resources 23 billion barrels* 2P Reserves, 6 billion Contingent barrels Resources, 17 billion barrels * Res
Slide 8: Attractive growth profile underpinned by oil sands
Strategy Attractive growth profile underpinned by oil sands • Strategic objective to grow oil sands capacity by th 10 – 12% per annum to 2020* grow e • Projects sequenced to deliver highest rates of futur d return, near-term cash flow and lowest risk within lanne Potential Projects: p MacKay River E
Slide 9: Upstream businesses support oil sands growth
Strategy Upstream businesses support oil sands growth • Natural gas • Divesting substantial number of assets to improve efficiency and profitability • Strategic review underway for natural gas portfolio • East Coast Canada and North Sea offshore • Support attractive near field add-ons to manage natu
Slide 10: Strategic low cost offshore resources
Strategy Strategic low cost offshore resources Q3/10 Cash Operating Costs per Barrel 40 • A balanced portfolio includes maintaining a component of low weighted average 30 cost International & Offshore cash operating cost production in order to balance 20 higher cost oil sands production • Attractive
Slide 11: Downstream integration
Strategy Downstream integration • 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 • High margin lubricants production A balanced portfolio of assets, combined wit
Slide 12: Environmental stewardship
Environment Environmental stewardship • Water use By 2015, we are targeting to *: • More than 90% of water recycled at In Situ operations • Reduce fresh water consumption by 12% • River water use is now the lowest since 1998 despite tripling production • Increase land area reclaimed by 100% • Improv
Slide 13: Tailings Pond reclamation progress
Environment Tailings Pond 1 reclamation progress Summer 2007 Fall 2008 Fall 2010 Projected 2020 13
Slide 14: Tailings Reduction Operations
Environment Tailings Reduction Operations • Reduces need to build additional tailings ponds • Anticipate reclaimable surface 10 years after initial disturbance as compared to 30-40 years with consolidated tailings www.suncor.com/tailings 14
Slide 15: Full cycle greenhouse gas emissions
Environment Full cycle greenhouse gas emissions GHG emissions range of common U.S. imported crude oils • On a life cycle basis, oil 120 sands have similar GHG emissions to other 100 sources of oil g CO2e / MJ gasoline 80 • Tank-to-Wheel emissions represents >75% of full 60 cycle emissions of CO2 • O
Slide 16: Financial objectives
Financial 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 net debt to 2x cash flow from operations through asset sales and free cash flow • Maintain investment grade credit ra
Slide 17: Current financial position
Financial Current financial position • Net debt at Q3/10 – $11.5 billion • Debt rating – Investment Grade • Near-term debt maturity • Cdn $500 million in August 2011 • US $300 million in 2013 • US $400 million in 2014 17
Slide 18: Planned asset divestitures
Financial Planned asset divestitures • 104 retail sites in Ontario – target 2010 close • Natural gas assets • U.S. Rockies assets sold to Noble Energy – closed March 2010 • Non-core northeast B.C. assets sold to Progress Energy – closed March 2010 • Rosevear/Pine Creek assets sold to Bonavista Energ
Slide 19: Operating synergies from merger
Financial Operating synergies from merger* • Initial forecasts: $300 million per year, later updated to $400 million • Final forecast: $800 million run rate per year • Operating synergies identified and triggered • Workforce rationalization • Supply chain initiatives • Crude & product optimization •
Slide 20: 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 21: Upstream planned turnarounds
Outlook Upstream planned turnarounds SU Operated Assets * Start Date Duration Planned Non-Operated Assets * Duration Impact ** Q4/10 U2 – 1 coker, diluent heaters, gasoil 9-Sep 6 wks 35 kbpd White Rose 3 wks hydrotreater Buzzard BEP install Oct 2010 to & ramp up Feb 2011 2011 U2 – cokers, utilities
Slide 22: 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
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