Suncor gave a good 2022 total return & 2023 should be betterYou can argue which Canadian O&G is the best however it's a bit like arguing which super model is sexier. What is the argument? Suncor's total 2022 return is almost 50% however some O&G is 60, 70, or even 80% therefor Suncor is a dog? I don't think Eric Nutall actually thinks Suncor is a complete dog he just likes other stocks better. Some companies are much smaller and more volatile and include gas so it’s hard to make exact comparisons.
It has been a good year. There has been tremendous progress on debt, buybacks and acquisitions. The cash position right now should be good for further acquisitions. Plus an almost 5% dividend. It’s not exactly a failing business.
Older equipment and techniques are not top optimal though the reality is some equipment needs constant maintenance and even annual replacement from day one so new isn’t everything. Not much lasts more than 10 or 15 years until a major overhaul. Every O&G is subject to technical difficulties. Refining at Suncor has been running very reliably. It could be buying Suncor is like buying a 40 year old home though there are plenty of very nice older homes out there. I think it's fair to say Suncor is now diversified enough that a shutdown on one site doesn’t blow up the year. If you are a smaller company a technical difficulty could be a disaster.
Some O&G’s have longer reserves life though even with Suncor you are talking 7 billion bbl. of high confidence reserves which means multiple decades of reserves. Don't forget Suncor exists in an area of the world where anywhere you dig for 100’s of sq k around you hit bitumen.
IMO, generally speaking, Canadian O&G is a good place to be in the stock market. Suncor is a foreseeable stable business because of such long reserve life and predictable operations. It’s a good business tied to the price of oil and crack spreads that’s not a bad place to be IMO. Even at $70 WTI that means $100 CAD and very healthy cash flow for Suncor.
When Suncor releases its yearend report in 5 weeks it’s going to look very good compared to December 31, 2021 and I personally don’t see a reason for the gravy train to stop in 2023.