Suncor Energy Inc. T.SU

TotalEnergies CAVES: Suncor Gets 100% Fort Hills For C$ 1.5B

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- SU CEO Rich Kruger SCORES GOAL !

Calgary, Alberta--(Newsfile Corp. - October 4, 2023) - Suncor Energy (TSX: SU) (NYSE: SU) announced today that it has agreed to purchase TotalEnergies EP Canada Ltd., which holds a 31.23% working interest in the Fort Hills oil sands mining project (Fort Hills) for $1.468 billion. The acquisition adds 61,000 barrels per day of net bitumen production capacity and 675 million barrels of proved and probable reserves to Suncor's existing oil sands portfolio. Regulatory approvals have been received and, subject to closing, the transaction will have an effective date of April 1, 2023.

- very NICE !

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- this wil CUT COSTS and BOOST EFFICIENCIES as they NO LONGER REQUIRE the PERMISSION of TotalEnergies to MOVE the TRUCK FLEET AROUND between MINING SITES and SCHEDULE PRODUCTION from an INTEGRATED Suncor OPERATION - as per Q2/2023 CC; they will CREATE a UNIFIED COMPANY-OWNED TRUCK FLEET MOVING HEAVILY into AUTOMATION and OWNER MAINTENANCE while RELEASING the HIGH-COST CONTRACTOR FLEET as their

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And no contingent payments either. When SU made the initial offer for FH+Surmont there was an extra potential $600M to be paid if I recall correctly.

[Clemxb7]

The deal on its face is really positive for Suncor's future. They can pay for this just out of cash flow in one or two quarters. I haven't seen any mention of assuming any tax credits. If they get tax credits too then they almost got this for free. However that sounds too good to be true. Suncor definitely won this deal. Considering Fort Hills cost $18 billion dollars to build they'

[meritmat]

  yup plus they should announce a div increase when results come out.  Dumped Suncor to jump into Cardinal yesterday.   Might look at jumping back into Suncor 

[mrbb]

i have said before about this waiting and re-negotiating game, TotalEnergies will blink first and will be the one calling SU. SU has the bargaining advantage as it can wait this out, 1 yr, 2 yr, etc.   TotalE can't. The longer TotalE drags this out, the more they lose.   Paying CAD 24,000 per flowing barrel is sweet, plus the 650 P+P gravy (reserves) is bonus. 

[Clemxb7]

No doubt Suncor now a significantly more valuable company. Oil gurus Josh Young and Eric Nutal both identified lack of upgrader feed post 2035 as Suncor's weak point. The decades of resource add now makes that a non-problem and they compare equal to the other oil sands majors in that regard. The cost is chump change for Suncor so considering what a plus the deal is it looks like we can say

[meritmat]

Managment team.  

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- I DON'T BELIEVE that Canadian Natural Resources PRESIDENT Jim McKay is a SUPERIOR EXECUTIVE than Suncor Energy CEO Rich Kruger - SU Executive Vice-President-Oil Sands Peter Zebedee SEEMS to be an EXTREMELY PROFICIENT manager and he has got a BIG JOB AHEAD OF HIM to TIGHLY INTEGRATE the FIVE KEY ASSETS (including the 58.74% owned Syncrude) z173

[meritmat]

  I agree there's nothing wrong with the new ceo but CNRL has a track record of dependability.  Suncor the opposite.   Will take a few quarters to change the investment community mind 

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- so TotalEnergies GOT ROUGHLY what Suncor OFFERED in the ORIGINAL BUYOUT BID * from ConocoPhillips: C $ 3.7 billion for Surmont * from Suncor Energy: C $ 1.468 billion for Fort Hills - Total:  C $ 5.168 billion - however, there are the CLOSING ADJUSTMENTS in TotalEnergies has to SHIFT EFFECTIVE DATE to April 1, 2023 - ORIGINAL SU OFFER: C $ 5.500 billion - INTERESTING in that

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better now: - IF (?) we "ASSUME" that the closing adjustments are worth C $ 332 million than TotalEnergies LOST USD 300 million in the CONTIGENCY PAYMENT CAP in SPLIT SALE z173