Suncor Energy Inc. · TSX:SU
Suncor Energy — Investor Presentation (July 2010)
22 slides from Suncor Energy's investor presentation, July 2010
Slide 1: Positioning for Long-Term Growth
Positioning for Long-Term Growth Investor Information July 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$50 billion market capitalization** • 27 billion barrels of oil equivalent of remaining recoverable resources*** – 23 billion barrels of oil sands – 4 billion other barrels • Regulatory approvals for future growt
Slide 4: 2010 priorities
Operational Update 2010 priorities 1. Accelerate operational excellence • Improve safety performance and reliably operate assets • Execute turnarounds safely, on time and on budget • Improve environmental performance 2. Deliver merger synergies, integration • New organization structure in place • Co
Slide 5: Merger timeline
Operational Update Merger timeline Announced sale of 98 Ontario retail stations Competition Bureau approval Announced sale of Announced sale of The Netherlands and New organization US Rockies assets Bearberry/Ricinus New executive structure and employee assets team announced roles substantially in p
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 • Portfolio provides a natural hedge for gas consumption at oil sands (2009 production = 767 mmcfe/d*, consumption at oil sands = 192 mmcfe/d) • Divesting substantial number of assets to improve efficiencies • Transition from explor
Slide 10: Strategic low cost offshore resources
Strategy Strategic low cost offshore resources Cash Operating Costs per Barrel • A balanced portfolio includes maintaining a component of low cost International & Offshore average cash operating cost production in order to balance higher cost oil sands production • Attractive projects to manage natu
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 insitu operation • Reduce water consumption by 12% • Reduced absolute water use by more than 1/3 since 2002 • Increase land area reclaimed by 100% • River water use is now the lowes
Slide 13: Tailings Pond reclamation progress
Environment Tailings Pond 1 reclamation progress Summer 2007 Fall 2008 Summer 2010 Projected 2020 13 www.suncor.com/tailings
Slide 14: 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 • Tank-to-Wheel emissions g CO2e / MJ gasoline 80 represents >75% of full 60 cycle emissions of CO2 • O
Slide 15: North American carbon footprint – oil sands & coal
Environment North American carbon footprint – oil sands & coal 15 Source: Oil Sands Developers Group
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 Q2/10 – $13.2 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 • 98 sold to Husky – target 2010 close • Natural gas assets • US 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 t
Slide 19: Operating synergies from merger
Financial Operating synergies from merger* • Initial forecast: $300 million per year • Current forecast: $400 million+ per year • Operating synergies identified and triggered since August 1st, 2009 • Workforce rationalization • Supply chain initiative • Crude & product optimization • Additional syne
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 ** Q3/10 Terra Nova 12-Jul 4 wks 27 kbpd Syncrude 7 wks U2 – 1 coker, diluent heaters, gasoil hydrotreater 9-Sep 6 wks 35 kbpd Q4/10 Nil - - - White Rose 3 wks 2011 U2 – cokers
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