(Reuters) - Suncor Energy Inc (SU.TO), Canada’s second-largest energy producer, reported a higher fourth-quarter profit on Wednesday, topping analysts’ estimates on stronger oil prices and lower costs.
The Calgary-based company also said it had achieved first oil at its Fort Hills oil sands project in Alberta, and that the ramp up to nameplate capacity of 194,000 barrels per day (bpd) was on schedule. Suncor holds a 53.1 percent stake Fort Hills.
Suncor’s other major growth project, Hebron, situated off the coast of eastern Canada, achieved first oil late last year. Suncor’s share in that project at peak will be 30,000 bpd.
“With Fort Hills and Hebron both successfully commissioned and now producing oil, the safe and steady ramp up of production is proceeding as planned,” said Chief Executive Steve Williams in a statement.
Suncor’s total upstream production was 736,400 barrels of oil equivalent per day in the fourth quarter of 2017, up from 738,500 boepd in the same period a year earlier.
Refinery throughput was 432,400 barrels per day, compared with 427,300 bpd in the year-prior quarter.
In northern Alberta’s oil sands, where the company has the bulk of its operations, fourth-quarter output was up 3.1 percent at 446,800 bpd while operating cash costs per barrel dropped to C$24.20, versus C$24.95 during the same period in 2016.
The company’s share of production at the Syncrude joint venture fell 6.7 percent to 174,400 bpd while operating cash costs per barrel rose slightly to C$32.80, compared with C$32.55 in the prior year quarter.
Suncor reported net earnings of C$1.38 billion, or 84 Canadian cents per share, in the three months ended Dec. 31. In the year-prior quarter, net earnings were C$531 million, or 32 Canadian cents per share.
Operating profit, which excludes one-time items, was C$1.31 billion, or 79 Canadian cents per share, in the fourth quarter, up from $636 million, or 38 Canadian cents per share, in the year-ago period.
Analysts had predicted earnings of 72 Canadian cents per share, according to Reuters data.
The company said it spent C$5.82 billion on capital projects in 2017.
Reporting by Julie Gordon in Vancouver; Editing by Peter Cooney