Wednesday, September 28, 2022
HomeInvestmentGran Tierra Vitality Inc. Pronounces Second Quarter 2022 Outcomes

Gran Tierra Vitality Inc. Pronounces Second Quarter 2022 Outcomes


  • Adjusted funds from operations elevated to $5.345 billion ($3.80 per frequent share) within the second quarter of 2022, in comparison with $2.362 billion ($1.57 per frequent share) within the prior yr quarter. This was the very best within the firm’s historical past, exceeding the prior per share quarterly report, from the primary quarter of 2022, by 33%. Money movement offered by working actions, which incorporates adjustments in non-cash working capital, was $4.235 billion ($3.01 per frequent share) within the second quarter of 2022, in comparison with $2.086 billion ($1.39 per frequent share) within the prior yr quarter.

  • Adjusted working earnings elevated to $3.814 billion ($2.71 per frequent share) within the second quarter of 2022, in comparison with $722 million ($0.48 per frequent share) within the prior yr quarter. The corporate’s internet earnings elevated to $3.996 billion ($2.84 per frequent share) within the second quarter of 2022, in comparison with $868 million ($0.58 per frequent share) within the prior yr quarter.

  • For the second consecutive quarter, Oil Sands delivered report adjusted funds from operations(1) of $4.231 billion within the second quarter of 2022, in comparison with $1.844 billion within the prior yr quarter, pushed by considerably larger worth realizations. Manufacturing from the corporate’s Oil Sands belongings elevated to 641,500 barrels per day (bbls/d) within the second quarter of 2022, in comparison with 615,700 bbls/d within the prior yr quarter, as a result of elevated manufacturing at Syncrude and Fort Hills within the present interval, partially offset by the influence of upkeep actions at Oil Sands operations, together with the most important turnaround in Firebag historical past, which was accomplished subsequent to the quarter.

  • Refining and Advertising (R&M) generated report adjusted funds from operations(1) of $2.127 billion within the second quarter of 2022, in comparison with $677 million within the prior yr quarter. Within the second quarter, refinery utilization averaged 84% and crude throughput was 389,300 bbls/d, in comparison with 70% and 325,300 bbls/d respectively within the prior yr quarter. Strong utilizations within the present quarter outdoors of deliberate turnaround actions allowed the corporate to seize important benchmark crack spreads and refining margins. Following the completion of deliberate turnaround actions, the corporate’s refineries exited the quarter with a mean refinery utilization of over 100%.

  • Within the second quarter of 2022, Suncor continued to ship on its technique of rising shareholder returns, returning report worth to its shareholders of roughly $3.2 billion, by means of roughly $2.6 billion in share repurchases and the cost of $657 million of dividends. Each the dividend per frequent share and the speed of frequent share repurchases throughout the quarter are the very best within the firm’s historical past. As at August 2, 2022, because the begin of the yr, the corporate has repurchased roughly $3.9 billion of Suncor’s frequent shares, representing roughly 88.5 million frequent shares at a mean share worth of $44.40 per frequent share, or the equal of 6.1% of its frequent shares as at December 31, 2021.

  • Within the second quarter of 2022, the corporate accomplished an early redemption of its excellent US$450 million 2.80% notes and US$550 million 3.10% notes initially due in 2023 and 2025, respectively. The corporate expects to attain the decrease finish of its 2025 focused internet debt vary throughout the second half of 2022.

  • Within the second quarter of 2022, Suncor and the three way partnership homeowners introduced the choice to restart the West White Rose Undertaking offshore the east coast of Canada, which is predicted to increase the manufacturing lifetime of the White Rose discipline, offering long-term worth for the corporate.

  • Subsequent to the second quarter of 2022, the corporate reached an settlement for the sale of its Exploration and Manufacturing (E&P) belongings in Norway, pending regulatory approval, for gross proceeds of roughly $410 million (Canadian greenback equal), earlier than closing changes and different closing prices. The sale is predicted to be accomplished within the fourth quarter of 2022, with an efficient date of March 1, 2022.

Monetary Outcomes

Adjusted Working Earnings

Suncor’s adjusted working earnings elevated to $3.814 billion ($2.71 per frequent share) within the second quarter of 2022, in comparison with $722 million ($0.48 per frequent share) within the prior yr quarter, primarily as a result of considerably larger crude oil and refined product realizations reflecting the improved enterprise setting within the present quarter, mixed with larger upstream manufacturing and refinery throughput. The rise in adjusted working earnings was partially offset by a rise in royalties and earnings taxes and elevated working bills primarily associated to a major enhance in commodity enter prices within the present quarter in comparison with the prior yr quarter.

Web Earnings

Suncor’s internet earnings elevated to $3.996 billion ($2.84 per frequent share) within the second quarter of 2022, in comparison with $868 million ($0.58 per frequent share) within the prior yr quarter. Along with the components impacting adjusted working earnings mentioned above, internet earnings for the second quarter of 2022 included a $352 million unrealized international alternate loss on the revaluation of U.S. greenback denominated debt recorded in financing bills, a non-cash impairment reversal of $715 million on the corporate’s share of the White Rose belongings, a non-cash impairment of $70 million in opposition to the corporate’s share of its belongings in Norway, a $19 million unrealized achieve on threat administration actions recorded in different earnings (loss) and a $130 million earnings tax expense associated to the objects famous. Web earnings within the prior yr quarter included a $174 million unrealized international alternate achieve on the revaluation of U.S. greenback denominated debt recorded in financing bills, a $13 million unrealized loss on threat administration actions recorded in different earnings (loss) and a $15 million earnings tax expense associated to the objects famous.

Adjusted Working Earnings Reconciliation(1)

Three months ended
June 30
Six months ended
June 30
 
($ tens of millions)2022202120222021 
Web earnings3 9968686 9451 689 
Unrealized international alternate loss (achieve) on U.S. greenback denominated debt352(174)206(370)
Unrealized (achieve) loss on threat administration actions(19)13(94)(14)
Asset impairment (reversal)(645)(645) 
Restructuring cost168 
Earnings tax expense (restoration) on adjusted working earnings changes13015157(5)
Adjusted working earnings(1)3 8147226 5691 468 

 

(1) Adjusted working earnings is a non-GAAP monetary measure. All reconciling objects are offered on a before-tax foundation and adjusted for earnings taxes within the earnings tax expense (restoration) on adjusted working earnings changes line. See the Non-GAAP Monetary Measures part of this information launch.

Adjusted Funds from Operations and Money Move Supplied by Working Actions

Adjusted funds from operations elevated to $5.345 billion ($3.80 per frequent share) within the second quarter of 2022, in comparison with $2.362 billion ($1.57 per frequent share) within the prior yr quarter. Adjusted funds from operations have been influenced by the identical components impacting adjusted working earnings famous above.

Money movement offered by working actions, which incorporates adjustments in non-cash working capital, was $4.235 billion ($3.01 per frequent share) for the second quarter of 2022, in comparison with $2.086 billion ($1.39 per frequent share) within the prior yr quarter. Along with the components impacting adjusted funds from operations, money movement offered by working actions was additional impacted by a better use of money related to the corporate’s working capital balances within the second quarter of 2022 in comparison with the prior yr quarter. Using money within the second quarter of 2022 was primarily as a result of a rise in accounts receivable and stock balances associated to the rise in commodity costs by means of the quarter, partially offset by a rise in accounts payable and accrued liabilities and a rise in taxes payable associated to the corporate’s 2022 earnings tax expense.

Working Outcomes

Suncor’s whole upstream manufacturing was 720,200 barrels of oil equal per day (boe/d) within the second quarter of 2022, in comparison with 699,700 boe/d within the prior yr quarter.

The corporate’s internet artificial crude oil manufacturing elevated to 483,000 bbls/d within the second quarter of 2022, in comparison with 437,200 bbls/d within the second quarter of 2021, as a result of elevated manufacturing from Syncrude, partially offset by decrease volumes from Oil Sands Base which was impacted by deliberate upkeep actions throughout the present quarter, together with annual coker upkeep at Upgrader 2 and unplanned upkeep. Within the prior yr, annual deliberate upkeep actions have been deferred to the third quarter to handle COVID-19-related execution dangers. At Syncrude, upgrader utilization of 93% within the second quarter of 2022, in comparison with 55% within the prior yr quarter, mirrored decrease deliberate upkeep actions within the present interval, together with the impacts of deliberate hydrotreater upkeep that was superior to the primary quarter of 2022.

The corporate’s non-upgraded bitumen manufacturing was 158,500 bbls/d within the second quarter of 2022, in comparison with 178,500 bbls/d within the second quarter of 2021, as a result of decreased manufacturing from the corporate’s In Situ belongings, which was partially offset by elevated manufacturing at Fort Hills. Decreased manufacturing from the corporate’s In Situ belongings was primarily because of the main deliberate turnaround at Firebag, which commenced throughout the quarter, and unplanned upkeep at MacKay River, which returned to regular manufacturing charges within the third quarter. Manufacturing from Fort Hills elevated to 87,400 bbls/d, in comparison with 45,300 bbls/d within the prior yr quarter, reflecting two-train operations, partially offset by deliberate upkeep accomplished early within the quarter.

Subsequent to the second quarter of 2022, the deliberate upkeep actions at Oil Sands Base Upgrader 2 and Firebag have been accomplished, and each belongings have safely ramped as much as regular working charges.

E&P manufacturing throughout the second quarter of 2022 was 78,700 boe/d, in comparison with 84,000 boe/d within the prior yr quarter. The lower in manufacturing was primarily because of the sale of the corporate’s working curiosity within the Golden Eagle Space Improvement within the fourth quarter of 2021, and pure declines, partially offset by elevated manufacturing at Buzzard within the present interval, because the prior yr quarter was impacted by deliberate turnaround actions.

Refinery crude throughput elevated to 389,300 bbls/d and refinery utilization was 84% within the second quarter of 2022, in comparison with 325,300 bbls/d and 70% within the prior yr quarter, reflecting deliberate turnaround actions in each intervals. Throughout the second quarter of 2022, the corporate accomplished deliberate turnaround actions at its Edmonton, Sarnia and Montreal refineries, and unplanned upkeep at its Commerce Metropolis refinery, enabling its refineries to exit the quarter with a mean refinery utilization of over 100%. Refined product gross sales within the second quarter of 2022 elevated to 561,700 bbls/d, in comparison with 463,300 bbls/d within the prior yr quarter, reflecting improved refined product demand within the present interval in comparison with the prior yr quarter, which was impacted by COVID-19-related restrictions. This elevated refined product demand was partially met by a deliberate draw of refined product stock that the corporate strategically constructed within the first quarter of 2022 in anticipation of serious deliberate turnaround actions within the second quarter.

“Within the second quarter of 2022, we efficiently executed deliberate upkeep actions throughout lots of our belongings in each the upstream and downstream,” mentioned Smith. “With the annual deliberate upkeep program accomplished on our downstream belongings, we count on to attain robust refinery utilizations for the rest of the yr, permitting the corporate to proceed to seize robust forecasted benchmark crack spreads and refining margins.”

The corporate’s whole working, promoting and basic bills have been $3.088 billion within the second quarter of 2022, in comparison with $2.720 billion within the prior yr quarter. The rise was primarily as a result of a major enhance in commodity enter prices, primarily pure gasoline costs, elevated share-based compensation bills and better prices related to elevated Oil Sands manufacturing. The corporate’s publicity to larger pure gasoline prices is partially mitigated by income from energy gross sales that’s recorded in working revenues.

Technique Replace

The corporate’s capability to function reliably and effectively is underpinned by Suncor’s worth of security above all else. Suncor is absolutely dedicated to enhancing its security and operational efficiency, a essential activity in attaining the corporate’s operational excellence priorities.

The corporate is implementing particular security steady enhancements and is constantly strengthening Suncor’s security tradition, making certain secure practices are persistently applied throughout all of Suncor’s services and geographies, and the corporate is making measured progress to attain particular milestones. As effectively, the corporate has made quite a lot of adjustments in its senior administration workforce so as to add to its working bench energy, together with including skilled mining leaders in essential management positions. On the similar time, Suncor has additionally realigned its central help group with skilled administration and employees to drive improved security and operational threat administration efficiency with the enterprise areas.

The corporate’s security enchancment plans are targeted on strengthening its threat administration and methods, constantly enhancing contractor security administration and interesting the entrance line to ship secure work with a robust security tradition. As well as, the corporate is implementing particular actions to constantly enhance security in Suncor’s mine and tailings operations, which have skilled quite a lot of severe security incidents. This contains implementing applied sciences, comparable to collision consciousness and driver security methods, making operational modifications to assist enhance cell gear egress and strengthening controls for high-risk actions. These adjustments are anticipated to assist stop incidents and mitigate severe impacts from incidents ought to they occur.

“Latest occasions underscore the vital work to be performed on enhancing the security efficiency of our firm,” mentioned Smith. “We should acknowledge the place now we have fallen brief and acknowledge the essential have to drive our security enchancment work with focus and vigour.”

The corporate has additionally made disciplined choices to regulate and streamline its portfolio to allow a better concentrate on its core enterprise, to securely enhance the reliability, utilization and integration of its belongings whereas persevering with efforts to sustainably scale back controllable prices. Within the first six months of 2022, the corporate introduced that it was taking steps to optimize its asset portfolio by means of the deliberate divestment of its E&P belongings in Norway and its wind and photo voltaic belongings. Subsequent to the second quarter of 2022, the corporate reached an settlement for the sale of its Norway belongings, pending regulatory approval, for gross proceeds of roughly $410 million (Canadian greenback equal), earlier than closing changes and different closing prices. The sale is predicted to be accomplished within the fourth quarter of 2022, with an efficient date of March 1, 2022. The sale course of for the corporate’s wind and photo voltaic belongings is progressing, with a sale anticipated to shut early in 2023. Primarily based on curiosity acquired within the firm’s E&P belongings within the U.Ok., the corporate has additionally commenced a sale course of for its total U.Ok. E&P portfolio.

Suncor may also be endeavor a strategic evaluation of its downstream retail enterprise with the purpose of unlocking shareholder worth. With the help of exterior advisors, this evaluation will consider and think about a variety of options, from a possible sale of the enterprise to choices to reinforce the worth of its retail enterprise.

In E&P Canada, funding within the Terra Nova Floating, Manufacturing, Storage and Offloading facility associated to the Asset Life Extension Undertaking is ongoing and the asset is anticipated to sail again to Canada for a secure return to operations later within the fourth quarter of 2022. Additionally, within the second quarter of 2022, Suncor and the three way partnership homeowners introduced the choice to restart the West White Rose Undertaking offshore the east coast of Canada. Because of the restart choice, Suncor has elevated its possession within the White Rose belongings by a further 12.5% to roughly 39%. Manufacturing from the West White Rose Undertaking is predicted to begin within the first half of 2026 and is predicted to offer long-term worth for the corporate by extending the manufacturing lifetime of the White Rose discipline.

The corporate continues to advance quite a lot of strategic initiatives which might be anticipated to contribute to the corporate’s incremental free funds movement goal by means of elevated income and reductions in working prices, capital expenditures and reclamation spending. The corporate expects to attain a further $400 million of incremental free funds movement by the tip of 2022, constructing on the incremental $465 million achieved in 2021, by means of the implementation of digital, course of and know-how initiatives. The working price portion of the financial savings generated from these enchancment initiatives helps to offset inflationary pressures and elevated mining prices within the firm’s Oil Sands enterprise. The corporate additionally continues to optimize transfers on the interconnecting pipelines between Oil Sands Base and Syncrude, capitalizing on the regional energy and suppleness of its Oil Sands belongings.

The corporate continues to progress in direction of realizing $100 million of annual gross synergies for the Syncrude three way partnership homeowners in 2022, with a further $200 million of annual gross synergies anticipated to be realized by means of 2023-2024.

Suncor is dedicated to allocating extra funds in accordance with its capital allocation framework, maximizing returns to its shareholders and strengthening its stability sheet. Within the second quarter of 2022, the corporate executed on its beforehand introduced annual capital allocation targets, returning report worth to its shareholders of roughly $3.2 billion, by means of roughly $2.6 billion in share repurchases and the cost of $657 million of dividends. The corporate repurchased roughly 54 million frequent shares within the second quarter of 2022, which represents the very best quarterly frequent share repurchases within the firm’s historical past. As at August 2, 2022, because the begin of the yr, the corporate has repurchased roughly 88.5 million frequent shares, or the equal of 6.1% of its frequent shares as at December 31, 2021. The quarterly dividend of $0.47 per frequent share can also be the very best dividend within the firm’s historical past.

Aligned with the corporate’s annual capital allocation targets, within the second quarter of 2022, the corporate accomplished an early redemption, at par, of its excellent US$450 million 2.80% notes and US$550 million 3.10% notes, initially due in 2023 and 2025, respectively. These actions clear Suncor’s long-term debt maturity runway till 2026. The corporate additionally accomplished a partial redemption of US$10.2 million of its excellent US$152 million 6.00% notes, due in 2042. With the corporate’s confidence in its anticipated money flows, the present enterprise setting and anticipated proceeds from the inclinations of belongings, the corporate expects to attain the decrease finish of its 2025 focused internet debt vary of $12 billion throughout the second half of 2022. As soon as internet debt has been decreased to $12 billion, the corporate expects to allocate 75% of extra funds in direction of share buybacks and 25% in direction of debt reimbursement. As soon as the corporate’s internet debt stability is at its $9 billion flooring, the corporate expects to allocate extra funds absolutely in direction of shareholder returns.

Company Steering

Suncor has up to date its full-year enterprise setting outlook assumptions for WCS at Hardisty from US$84.00/bbl to US$80.00/bbl, New York Harbor 2-1-1 crack from US$38.00/bbl to US$41.50/bbl and AECO-C Spot from $6.10/GJ to $5.90/GJ as a result of adjustments in key ahead curve pricing for the rest of the yr.

As well as, the corporate’s whole manufacturing vary has been revised from 750,000 bbls/d – 790,000 bbls/d to 740,000 bbls/d – 760,000 bbls/d to mirror yr up to now efficiency and anticipated efficiency for the rest of the yr. Because of this, the highest of the manufacturing ranges for Oil Sands operations have been revised from 435,000 bbls/d to 415,000 bbls/d, Fort Hills from 100,000 bbls/d to 90,000 bbls/d, Syncrude from 190,000 bbls/d to 185,000 bbls/d and E&P from 85,000 bbls/d to 80,000 bbls/d.

The corporate has additionally revised its full yr outlook for capital expenditures from a single level estimate of $4.7 billion to a spread of $4.9 billion – $5.2 billion. The rise in capital steerage displays inflationary pressures throughout the enterprise, the West White Rose Undertaking restart and the corporate’s elevated working curiosity in that mission, and elevated spend throughout turnarounds and upkeep to enhance security and reliability throughout the portfolio.

The corporate has additionally up to date its Fort Hills money working prices per barrel steerage vary, with the elevated vary attributed primarily to inflationary pressures, elevated commodity prices and decreased manufacturing. Because of this, Fort Hills money working prices per barrel have been up to date from $25.00 – $28.00 to $27.00 – $30.00.

Because of these updates, the full-year present earnings tax expense vary has elevated from $4.0 billion – $4.3 billion to $4.4 billion – $4.7 billion.

For additional particulars and advisories relating to Suncor’s 2022 company steerage, see www.suncor.com/steerage.

Non-GAAP Monetary Measures

Sure monetary measures on this information launch – specifically adjusted funds from operations, adjusted working earnings, internet debt and free funds movement and associated per share or per barrel quantities – should not prescribed by GAAP. These non-GAAP monetary measures are included as a result of administration makes use of the knowledge to investigate enterprise efficiency, leverage and liquidity, as relevant, and it might be helpful to buyers on the identical foundation. These non-GAAP monetary measures do not need any standardized which means and, due to this fact, are unlikely to be akin to related measures offered by different firms. Due to this fact, these non-GAAP monetary measures shouldn’t be thought-about in isolation or as an alternative choice to measures of efficiency ready in accordance with GAAP. Besides as in any other case indicated, these non-GAAP monetary measures are calculated and disclosed on a constant foundation from interval to interval. Particular adjusting objects might solely be related in sure intervals.

Starting within the fourth quarter of 2021, the corporate modified the label of working earnings (loss) and funds from (utilized in) operations to adjusted working earnings (loss) and adjusted funds from (utilized in) operations, respectively, to higher distinguish the non-GAAP monetary measures from the comparable GAAP measures and higher mirror the aim of the measures. The composition of the measures stays unchanged and due to this fact no prior intervals have been restated.

Adjusted Working Earnings

Adjusted working earnings is a non-GAAP monetary measure that adjusts internet earnings for important objects that aren’t indicative of working efficiency. Administration makes use of adjusted working earnings to guage working efficiency as a result of administration believes it offers higher comparability between intervals. Adjusted working earnings is reconciled to internet earnings within the information launch above.

Starting within the first quarter of 2022, to align with how administration evaluates section efficiency, the corporate revised its section presentation to mirror section outcomes earlier than earnings tax expense and current tax at a consolidated stage. This presentation change has no impact on consolidated adjusted working earnings. Comparative intervals have been restated to mirror this alteration.

Adjusted Funds From (Used In) Operations

Adjusted funds from (utilized in) operations is a non-GAAP monetary measure that adjusts a GAAP measure – money movement offered by working actions – for adjustments in non-cash working capital, which administration makes use of to investigate working efficiency and liquidity. Modifications to non-cash working capital might be impacted by, amongst different components, commodity worth volatility, the timing of offshore feedstock purchases and funds for commodity and earnings taxes, the timing of money flows associated to accounts receivable and accounts payable, and adjustments in stock, which administration believes reduces comparability between intervals.

Three months ended June 30Oil SandsExploration
and
Manufacturing
Refining and
Advertising
Company and EliminationsEarnings
Taxes(1)
Complete
($ tens of millions)202220212022202120222021202220212022202120222021
Earnings (loss) earlier than earnings taxes(1) 2 892 582 1 361 340 2 007 486 (851) (320) 5 409 1 088
Changes for:
Depreciation, depletion, amortization and impairment 1 279 1 092 (505) 191 199 208 25 21 998 1 512
Accretion 58 60 16 15 2 1 1 76 77
Unrealized international alternate loss (achieve) on U.S. greenback denominated debt 352 (174) 352 (174)
Change in truthful worth of economic devices and buying and selling stock (22) 71 (22) (47) (89) (36) (133) (12)
Loss (achieve) on disposal of belongings 1 (11) (8) (10) (8)
Share-based compensation 53 24 3 2 21 14 57 41 134 81
Settlement of decommissioning and
restoration liabilities
(59) (39) (18) (3) (3) (1) (80) (43)
Different 29 54 6 (1) 1 7 15 9 51 69
Present earnings tax expense (1 452) (228) (1 452) (228)
Adjusted funds from (utilized in) operations(1) 4 231 1 844 841 500 2 127 677 (402) (431) (1 452) (228) 5 345 2 362
Change in non-cash working capital (1 110) (276)
Money movement offered by working actions 4 235 2 086

 

(1) Starting within the first quarter of 2022, to align with how administration evaluates section efficiency, the corporate revised its section presentation to mirror section outcomes earlier than earnings tax expense and current tax at a consolidated stage. This presentation change has no impact on consolidated adjusted funds from (utilized in) operations. Comparative intervals have been restated to mirror this alteration.

Six months ended June 30Oil SandsExploration
and Manufacturing
Refining and
Advertising
Company and EliminationsEarnings
Taxes(1)
Complete
($ tens of millions)202220212022202120222021202220212022202120222021
Earnings (loss) earlier than earnings taxes(1) 5 201 1 027 2 006 598 3 424 1 420 (1 374) (843) 9 257 2 202
Changes for:
Depreciation, depletion, amortization and impairment 2 384 2 250 (376) 293 411 417 50 42 2 469 3 002
Accretion 121 119 30 29 3 3 154 151
Unrealized international alternate loss (achieve) on U.S. greenback denominated debt 206 (370) 206 (370)
Change in truthful worth of economic devices and buying and selling stock (43) (44) (39) (54) (125) (18) 1 (207) (115)
(Achieve) loss on disposal of belongings (1) (11) (8) (8) (12) (16)
Share-based compensation 81 23 2 1 26 12 81 43 190 79
Settlement of decommissioning and
restoration liabilities
(147) (107) (18) (1) (5) (4) (1) (1) (171) (113)
Different 49 103 (40) (1) 1 27 (29) 35 (19) 164
Present earnings tax expense (2 428) (512) (2 428) (512)
Adjusted funds from (utilized in) operations(1) 7 645 3 371 1 565 865 3 724 1 849 (1 067) (1 101) (2 428) (512) 9 439 4 472
Change in non-cash working capital (2 132) (41)
Money movement offered by working actions 7 307 4 431

 

(1) Starting within the first quarter of 2022, to align with how administration evaluates section efficiency, the corporate revised its section presentation to mirror section outcomes earlier than earnings tax expense and current tax at a consolidated stage. This presentation change has no impact on consolidated adjusted funds from (utilized in) operations. Comparative intervals have been restated to mirror this alteration. See the Earnings Tax part of this MD&A for a dialogue on earnings taxes.

Web Debt and Complete Debt

Web debt and whole debt are non-GAAP monetary measures that administration makes use of to investigate the monetary situation of the corporate. Complete debt contains short-term debt, present portion of long-term debt, present portion of long-term lease liabilities, long-term debt and long-term lease liabilities (all of that are GAAP measures). Web debt is the same as whole debt much less money and money equivalents (a GAAP measure).

June 30December 31
($ tens of millions, besides as famous)20222021 
Brief-term debt1 5811 284 
Present portion of long-term debt231 
Present portion of long-term lease liabilities302310 
Lengthy-term debt12 88013 989 
Lengthy-term lease liabilities2 6062 540 
Complete debt17 36918 354 
Much less: Money and money equivalents1 6702 205 
Web debt15 69916 149 

 

Free Funds Move

Free funds movement is a non-GAAP monetary measure that’s calculated by taking adjusted funds from operations and subtracting capital expenditures, together with capitalized curiosity. Free funds movement displays money out there for rising distributions to shareholders and lowering debt. Administration makes use of free funds movement to measure the capability of the corporate to extend returns to shareholders and to develop Suncor’s enterprise.

Three months ended
June 30
Six months ended
June 30
($ tens of millions)2022202120222021 
Money movement offered by working actions4 2352 0867 3074 431 
(Add) deduct change in non-cash working capital(1 110)(276)(2 132)(41)
Adjusted funds from operations5 3452 3629 4394 472 
Much less capital expenditures together with capitalized curiosity(1)(1 295)(1 347)(2 306)(2 150)
Free funds movement4 0501 0157 1332 322 

 

(1) Excludes capital expenditures associated to belongings held on the market of $36 million within the second quarter of 2022 and $55 million within the first six months of 2022.

Authorized Advisory – Ahead-Trying Data

This information launch comprises sure forward-looking info and forward-looking statements (collectively referred to herein as “forward-looking statements”) inside the which means of relevant Canadian and U.S. securities legal guidelines. Ahead-looking statements and different info are based mostly on Suncor’s present expectations, estimates, projections and assumptions that have been made by the corporate in mild of knowledge out there on the time the assertion was made and think about Suncor’s expertise and its notion of historic traits, together with expectations and assumptions regarding: the accuracy of reserves estimates; the present and potential adversarial impacts of the COVID-19 pandemic, together with the standing of the pandemic and future waves and any related insurance policies round present enterprise restrictions, shelter-in-place orders or gatherings of people; commodity costs and curiosity and international alternate charges; the efficiency of belongings and gear; uncertainty associated to geopolitical battle; capital efficiencies and value financial savings; relevant legal guidelines and authorities insurance policies; future manufacturing charges; the sufficiency of budgeted capital expenditures in finishing up deliberate actions; the provision and value of labour, companies and infrastructure; the satisfaction by third events of their obligations to Suncor; the event and execution of initiatives; and the receipt, in a well timed method, of regulatory and third-party approvals. All statements and knowledge that tackle expectations or projections concerning the future, and different statements and details about Suncor’s technique for development, anticipated and future expenditures or funding choices, commodity costs, prices, schedules, manufacturing volumes, working and monetary outcomes, future financing and capital actions, and the anticipated influence of future commitments are forward-looking statements. Among the forward-looking statements could also be recognized by phrases like “expects”, “anticipates”, “will”, “estimates”, “plans”, “scheduled”, “intends”, “believes”, “initiatives”, “signifies”, “may”, “focus”, “imaginative and prescient”, “purpose”, “outlook”, “proposed”, “goal”, “goal”, “proceed”, “ought to”, “might”, “future”, “potential”, “alternative”, “would”, “precedence”, “technique” and related expressions. Ahead-looking statements on this information launch embody references to: Suncor’s expectation that the West White Rose Undertaking will begin manufacturing within the first half of 2026, lengthen the manufacturing lifetime of the White Rose discipline and supply long-term worth for the corporate; statements about Suncor’s 2025 focused internet debt vary of $12-$15 billion and the corporate’s expectation that, within the present enterprise setting, it should obtain the decrease finish of its 2025 focused internet debt vary throughout the second half of 2022; Suncor’s expectation that the sale of its E&P belongings in Norway will probably be accomplished within the fourth quarter of 2022 and the estimated proceeds therefrom, {that a} sale of its wind and photo voltaic belongings will shut early in 2023 and statements relating to the potential sale of Suncor’s total U.Ok. E&P portfolio; Suncor’s expectation that Terra Nova is on monitor to return to operations later within the fourth quarter and that the corporate will obtain robust refinery utilizations from the rest of the yr which is able to permit the corporate to seize robust forecasted benchmark crack spreads and refining margins; Suncor’s dedication to enhancing its security and operational efficiency and the steps it should take to take action to be able to obtain its operational excellence priorities and making certain secure practices are persistently applied throughout all of Suncor’s services and geographies and that the focused adjustments it has taken will assist to sharpen the corporate’s concentrate on security; Suncor’s expectations for applied sciences comparable to collision consciousness, driver security methods and cell gear egress together with the anticipated advantages therefrom; statements relating to Suncor’s strategic evaluation of its downstream retail enterprise, together with the objectives, course of and anticipated timing for the evaluation to be accomplished; statements concerning the Terra Nova Floating, Manufacturing, Storage and Offloading facility and the Asset Life Extension Undertaking, together with that the asset is on monitor to sail again to Canada for a secure return to operations within the fourth quarter of 2022; statements about Suncor’s incremental free funds movement goal, together with with respect to the strategic initiatives which might be anticipated to contribute to the goal and the corporate’s expectation that it’s going to obtain a further $400 million of incremental free funds movement in 2022, primarily pushed by the implementation of digital, course of and know-how initiatives; expectations relating to Suncor’s operatorship of the Syncrude asset, together with that the Suncor is continuous to progress in direction of realizing $100 million of annual gross synergies for the Syncrude three way partnership homeowners in 2022, with a further $200 million of annual gross synergies anticipated to be realized by means of 2023-2024; Suncor’s expectation that it’s going to stay dedicated to its capital allocation framework, its plan to speed up its capital allocation plan and allocate incremental free funds movement in accordance therewith, with extra funds being allotted in direction of debt reimbursement and share buybacks based mostly on internet debt ranges; and Suncor’s full-year outlook vary on whole manufacturing, Oil Sands operations manufacturing, Fort Hills manufacturing, Syncrude manufacturing, E&P manufacturing, Fort Hills money working prices per barrel, full yr outlook for capital expenditures and full-year present earnings tax bills in addition to enterprise setting outlook assumptions for WCS at Hardisty, New York Harbor 2-1-1 crack and AECO-C Spot. As well as, all different statements and details about Suncor’s technique for development, anticipated and future expenditures or funding choices, commodity costs, prices, schedules, manufacturing volumes, working and monetary outcomes and the anticipated influence of future commitments are forward-looking statements. Among the forward-looking statements and knowledge could also be recognized by phrases like “expects”, “anticipates”, “will”, “estimates”, “plans”, “scheduled”, “intends”, “believes”, “initiatives”, “signifies”, “may”, “focus”, “imaginative and prescient”, “purpose”, “outlook”, “proposed”, “goal”, “goal”, “proceed”, “ought to”, “might” and related expressions.

Ahead-looking statements are based mostly on Suncor’s present expectations, estimates, projections and assumptions that have been made by the corporate in mild of its info out there on the time the assertion was made and think about Suncor’s expertise and its notion of historic traits, together with expectations and assumptions regarding: the accuracy of reserves estimates; the present and potential adversarial impacts of the COVID-19 pandemic, together with the standing of the pandemic and future waves and any related insurance policies round present enterprise restrictions, shelter-in-place orders or gatherings of people; commodity costs and curiosity and international alternate charges; the efficiency of belongings and gear; capital efficiencies and value financial savings; relevant legal guidelines and authorities insurance policies; future manufacturing charges; the sufficiency of budgeted capital expenditures in finishing up deliberate actions; the provision and value of labour, companies and infrastructure; the satisfaction by third events of their obligations to Suncor; the event and execution of initiatives; and the receipt, in a well timed method, of regulatory and third-party approvals.

Ahead-looking statements and knowledge should not ensures of future efficiency and contain quite a lot of dangers and uncertainties, some which might be much like different oil and gasoline firms and a few which might be distinctive to Suncor. Suncor’s precise outcomes might differ materially from these expressed or implied by its forward-looking statements, so readers are cautioned to not place undue reliance on them.

Suncor’s Annual Data Type and Annual Report back to Shareholders, every dated February 23, 2022, Type 40-F dated February 24, 2022, Suncor’s Report back to Shareholders for the Second Quarter of 2022 dated August 4, 2022 (the MD&A), and different paperwork it recordsdata on occasion with securities regulatory authorities describe the dangers, uncertainties, materials assumptions and different components that would affect precise outcomes and such components are included herein by reference. Copies of those paperwork can be found with out cost from Suncor at 150 sixth Avenue S.W., Calgary, Alberta T2P 3E3; by e mail request to make investments@suncor.com; by calling 1-800-558-9071; or by referring to suncor.com/FinancialReports or to the corporate’s profile on SEDAR at sedar.com or EDGAR at sec.gov. Besides as required by relevant securities legal guidelines, Suncor disclaims any intention or obligation to publicly replace or revise any forward-looking statements, whether or not on account of new info, future occasions or in any other case.

Authorized Advisory – BOEs

Sure pure gasoline volumes have been transformed to barrels of oil equal (boe) on the premise of 1 barrel to 6 thousand cubic toes. Any determine offered in boe could also be deceptive, significantly if utilized in isolation. A conversion ratio of 1 bbl of crude oil or pure gasoline liquids to 6 thousand cubic toes of pure gasoline relies on an vitality equivalency conversion methodology primarily relevant on the burner tip and doesn’t signify a price equivalency on the wellhead. Provided that the worth ratio based mostly on the present worth of crude oil as in comparison with pure gasoline is considerably totally different from the vitality equivalency of 6:1, using a conversion on a 6:1 foundation could also be deceptive as a sign of worth.

To view a full copy of Suncor’s second quarter 2022 Report back to Shareholders and the monetary statements and notes (unaudited), go to Suncor’s profile on sedar.com or sec.gov or go to Suncor’s web site at suncor.com/financialreports.

To hearken to the convention name discussing Suncor’s second quarter outcomes, go to suncor.com/webcasts.

Suncor Vitality is Canada’s main built-in vitality firm. Suncor’s operations embody oil sands growth, manufacturing and upgrading; offshore oil and gasoline; petroleum refining in Canada and the U.S.; and the corporate’s Petro-Canada retail and wholesale distribution networks (together with Canada’s Electrical Freeway™, a coast-to-coast community of fast-charging electrical automobile stations). Suncor is growing petroleum assets whereas advancing the transition to a low-emissions future by means of funding in energy, renewable fuels and hydrogen. Suncor additionally conducts vitality buying and selling actions targeted principally on the advertising and marketing and buying and selling of crude oil, pure gasoline, byproducts, refined merchandise and energy. Suncor has been acknowledged for its efficiency and clear reporting on the Dow Jones Sustainability index, FTSE4Good and CDP. Suncor can also be listed on the UN International Compact 100 inventory index. Suncor’s frequent shares (image: SU) are listed on the Toronto Inventory Trade and the New York Inventory Trade.

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For extra details about Suncor, go to our website at suncor.com or observe us on Twitter @Suncor

Media inquiries:
833-296-4570
media@suncor.com

Investor inquiries:
800-558-9071
make investments@suncor.com

(1) Starting within the first quarter of 2022, to align with how administration evaluates section efficiency, the corporate revised its section presentation to mirror section outcomes earlier than earnings tax expense and current tax at a consolidated stage. This presentation change has no impact on consolidated internet earnings (loss), adjusted working earnings (loss) and adjusted funds from (utilized in) operations. Comparative intervals have been restated to mirror this alteration.

To view the supply model of this press launch, please go to https://www.newsfilecorp.com/launch/132927



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