(Reuters) - Suncor Energy Inc on Wednesday reported third-quarter profit just shy of estimates as weak business environment and higher operating and transportation expenses dented the second-largest Canadian oil and gas producer’s margins.
The company also narrowed its full-year total production outlook range to 780,000 – 790,000 barrels of oil equivalent per day (boepd) from 780,000 – 820,000 boepd.
Suncor and a number of other producers have asked the government to allow them to produce above their current curtailment limit as long as incremental production moves to market by rail.
The government’s mandatory cuts for oil production that came into effect on January 1 have helped free up some pipeline space for the country’s crude.
The mandatory cuts sharply reduced a price discount on Canadian versus U.S. oil, boosting revenue for many producers but affecting profits for integrated companies such as Suncor, which benefited from low-cost oil to run through its refineries.
In the third quarter ended Sept. 30, it produced 762,300 boepd, up from 743,800 boepd in the year-ago quarter.
Suncor said its production rose due to higher output at Syncrude and the ramp-up of Fort Hills and Hebron oil facilities in 2018.
Net profit fell to C$1.04 billion or 67 Canadian cents per share in the quarter, from C$1.82 billion or C$1.12 per share last year.
Excluding one-off items, the company earned 72 Canadian cents per share, a touch below analysts’ average estimates of 73 Canadian cents, according to IBES data from Refinitiv.
Earlier in the day, MEG Energy Corp reported a net profit of 0.08 Canadian cents per share and C$958 million revenue in the third quarter, from a net profit of 39 Canadian cents per share and C$803 million revenue a year ago.
Reporting by Nia Williams in Calgary, Arunima Kumar and Aishwarya Nair in Bengaluru; Editing by Shailesh Kuber and Sherry Jacob-Phillips