CALGARY, Alberta (Reuters) - Suncor Energy Inc (SU.TO), Canada’s largest oil and gas company, reported a better-than-expected third-quarter profit on Wednesday thanks to strong upstream production, lower operating costs and record crude throughput at its refineries.
The company reported net earnings of C$392 million ($293 million), or 24 Canadian cents per share. In the year-prior quarter, Suncor recorded a net loss of C$376 million, or 26 Canadian cents a share, which included an unrealized after-tax foreign exchange loss of $786 million on the revaluation of U.S. dollar-denominated debt.
Suncor’s third-quarter operating profit, which excludes one-time items, was C$346 million, or 21 Canadian cents per share, versus C$410 million, or 28 Canadian cents per share, in the year-ago period.
Analysts had predicted earnings of 9 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Calgary-based Suncor is the biggest producer in Canada’s oil sands and also has operations offshore Atlantic Canada and in the North Sea. The company produced 728,100 barrels of oil equivalent per day in the third quarter, up from 566,100 boepd in the same period of 2015, due mainly to becoming the majority owner of the Syncrude project.
Syncrude, a mining and upgrading project in northern Alberta, has been dogged by operating issues over the years, but Suncor said upgrader reliability improved to 98 percent in the third quarter and operating costs dropped to C$27.65 per barrel from C$41.65 per barrel in the year-prior quarter.
Suncor also owns a number of thermal oil sands projects and a mining and upgrading plant near Fort McMurray, Alberta. Production rebounded after wildfires in the region in the second quarter shut down facilities for several weeks.
Total third-quarter oil sands production was 433,700 bpd, compared with 430,300 bpd a year previously, with increased output from thermal projects offset by lower synthetic crude volumes as a result of unplanned maintenance.
Oil sands operating costs fell to $22.15 a barrel in the quarter from $27 a barrel a year prior because of lower natural gas prices, cost reductions and increased production.
“Our cost reduction efforts combined with safe, reliable operations have delivered the lowest cash costs per barrel at our oil sands operations in over a decade and Syncrude delivered similar improvements,” Suncor Chief Executive Steve Williams said.
The company is divesting non-core assets, and said it had advanced the sales process for its lubricants business, as well as starting the sales process for some assets and liabilities related to its renewable energy business.
Average refinery throughput improved to a record 465,600 bpd from 444,800 bpd in the prior-year quarter.
($1 = 1.3383 Canadian dollars)
Reporting by Nia Williams; Editing by Lisa Shumaker and Peter Cooney