CALGARY, Alberta, Feb 10 (Reuters) - Suncor Energy Inc (SU.TO) said on Tuesday it has sold forward much of its 2009 and 2010 oil output above current prices as Canada’s No. 2 oil sands producer seeks to protect its returns in shaky crude markets.
Suncor, which last month put its C$20.6 billion ($16.5 billion) oil sands expansion project on hold, said it hedged 125,000 barrels a day of 2009 production. That is in addition to an existing option to sell 55,000 bpd at a floor price of $60 a barrel.
The combination will garner the company a floor price of $53.50 a barrel, up from Tuesday’s closing U.S. benchmark price of $37.55.
Suncor also hedged 50,000 bpd of 2010 production at a floor price of $50 a barrel and ceiling of $68. That replaces a previous 2010 option to sell 55,000 bpd at a floor of $60.
Switching the contracts will give Suncor proceeds of about C$250 million before tax, the company said.
The moves will allow the company to take advantage of higher oil prices — should they recover — on more than half its 2009 output, chief executive Rick George said in a statement.
Suncor shares closed down C$1.49, or nearly 6 percent, at C$24.56 on the Toronto Stock Exchange. ($1=$1.25 Canadian) (Reporting by Jeffrey Jones; Editing by Frank McGurty)