Suncor slides as results disappoint, upgrader in doubt

Wed Feb 6, 2013 9:04am EST
 
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Feb 6 (Reuters) - Shares in Suncor fell nearly 5 percent in pre-market trade on Wednesday, after Canada's largest oil company reported a loss and wrote down the value of its Voyageur oil sands upgrading project.

Calgary, Alberta-based Suncor said late on Tuesday it has booked a C$1.49 billion ($1.5 billion) writedown on Voyageur and the project - aimed at converting oil sands bitumen into refinery-ready synthetic crude - may not go ahead.

"The write-down does not come as a surprise given the challenging outlook for upgrading economics in Alberta," said Scotiabank analyst Mark Polak in a note to clients.

Polak said the write-down potentially signals management's "renewed focus on returns instead of growth."

Suncor shares, which closed at $34.53 on Tuesday on the New York Stock Exchange, were down $1.69 at 0830 ET (1330 GMT).

National Bank analyst Kyle Preston believes the impairment charge is a sure sign the Voyageur project will be canceled.

"Overall, the fourth-quarter results were disappointing and may lead to a slight downward revision to our 2013 financial forecasts after we have more time to analyze the results," said Preston, in a note to clients.

($1 = 0.9982 Canadian dollars) (Reporting by Euan Rocha; Editing by Janet Guttsman, Nick Zieminski)