CALGARY – Suncor Energy Inc. delivered first-quarter earnings Monday that beat analyst expectations and reported a drop in oilsands production due to a month-long unplanned upgrader outage.
Canada’s largest energy company booked operating earnings, which are adjusted for one-time items, of $1.33 billion, or 85 cents per share — beating the average estimate of 81 cents per share, according to Thomson Reuters.
During the same 2011 quarter, Canada’s largest energy company earned $1.48 billion, or 94 cents per share.
Oilsands production, excluding its share of the Syncrude oilsands mine, contributed an average of 305,700 barrels per day during the first three months of the year, compared to 322,100 barrels a year ago.
In March, Suncor took down one of its upgraders for unplanned repairs for about four weeks. The outage was not expected to affect its annual production targets.
Upgraders process heavy, impure oilsands crude into a type of oil refineries can more easily handle.
“The mid-March through mid-April unplanned shutdown of Upgrader 2 was a disappointing setback after so many consecutive quarters of steadily improved operational performance and record-setting production levels,” said chief operating officer Steve Williams, who will become CEO at Suncor’s annual general meeting on Tuesday.
“Be assured that we will learn from this experience as we continue our journey towards operational excellence.”
Total upstream production averaged 562,000 barrels of oil equivalent per day, compared to 601,300 barrels per day in the year-ago period.
First-quarter net earnings were $1.46 billion, or 93 cents per share, up from $1.03 billion, or 65 cents per share, during the same period of 2011.
Revenues were $9.76 billion, compared to $9.08 billion a year earlier.
Cash flow from operations was $2.43 billion, compared to $2.39 billion a year earlier.
Also Monday, Suncor raised its quarterly dividend by two cents to 13 cents.
After more than two decades at the helm of Suncor, CEO Rick George is set to hand the reins to Williams at Tuesday’s annual general meeting.
One of the biggest milestones of George’s tenure was the 2009 takeover of former Crown corporation Petro-Canada, which transformed Suncor into Canada’s largest energy company.
“While it’s hard to leave all my friends and colleagues, I do so with a tremendous amount of pride in what we have built together over the past two decades and a sense of excitement about the future of this great company,” said George.
“Steve and his leadership team know this company, and this industry, from the inside out, and I can’t think of a team better equipped to face both the challenges and tremendous opportunities that lie ahead. They also have the support of dedicated employees who continue to serve Suncor and its shareholders extremely well.”
Suncor is the largest operator in the oilsands, with huge mining operations north of Fort McMurray, a 12 per cent interest in the Syncrude Canada Ltd. mine, a 41 per cent stake in the yet-to-be-developed Fort Hills mine and steam-driven operations at Firebag and Mackay river.
In December 2010, Suncor inked a $1.75-billion deal with the Canadian division of France’s Total SA to work together in the oilsands.
It also has refineries in Edmonton, Montreal, Sarnia, Ont. and Commerce City, Colo., which cushioned the company against volatility in crude oil prices during the quarter.
“Lower prices experienced in our oilsands segment have been largely recovered through lower input costs in our refining and marketing segment,” said Williams.
Through the Petro-Canada transaction, Suncor inherited oil assets in Libya and Syria. As conflict broke out in Libya in February 2011, Suncor pulled its employees out of the North African country.
Its Libyan joint-venture partner, Harouge Oil Operations BV, has restarted production in all major fields in Libya, averaging 39,200 barrels per day during the first quarter, Suncor said.
In December, Suncor pulled its employees out of Syria in order to comply with sanctions aimed at isolating the regime of President Bashar Assad, condemned internationally for his government’s bloody crackdown on pro-democracy protests. No production was recorded in Syria during the quarter.
Suncor, which reported its results after markets closed, were at $32.63 on the Toronto Stock Exchange on Monday, an increase of more than three per cent.