Suncor Energy is growing its position in the Canadian oil sands through a major acquisition.
Suncor agreed to acquire all shares of TotalEnergies’ Canadian operations, TotalEnergies EP Canada Ltd., for about CA$5.5 billion (US$4.1 billion).
The deal includes Total’s 31.23% interest in the Fort Hills oil sands mining project and the French company’s 50% interest in the Surmont in situ oil sands asset.
Suncor expects the deal to add 135,000 bbl/d of net bitumen production capacity as well as increase the company’s oil sands reserves by 2.1 billion bbl.
Rich Kruger, president and CEO at Suncor, said the deal helps Suncor secure long-term bitumen supply to upgraders at its Base Plant operation in Alberta at competitive costs.
“These are valuable oil sands assets that are a strategic fit for us and add long-term shareholder value,” Kruger said in a statement. “The acquisition also introduces flexibility and optionality into our long-range capital plan, providing us with further discretion in respect of the timing and scope of future oil sands developments.”
Suncor will pay CA$5.5 billion in cash, or around US$4.1 billion at the current exchange rate, to acquire Total’s Canadian operations. The deal also calls for future additional payments of up to CA$600 million (US$440 million)depending on commodity benchmark pricing and achieving certain production targets.
Suncor plans to finance the acquisition through debt, which is expected to raise the company’s net debt levels above a target range of between CA$12 billion and CA$15 billion. Suncor anticipates returning to a preferred net debt target by 2024.
2023-09-28 - A global LNG supply gap will begin to open up in the 2030s, according to a McKinsey & Co. analysis but the U.S. might lose its competitive edge if red tape, particularly around pipeline permitting, isn't addressed.
2023-09-25 - For the upcoming week, Stratas Advisors expects oil prices to be under pressure and may test $90 again, with the price of Brent not able to break through $95 last week.
2023-09-25 - In this Hart Energy LIVE Exclusive interview, EQT CEO Toby Rice describes what unleashing the U.S. LNG sector would look like.
2023-09-24 - Oil prices for select global crudes are on a massive upward trend with $100/bbl just out of reach, according to data from General Index, a tech-native benchmark provider, and analysts say the prices prices are driven by OPEC+’s decision to extend production cuts.