Stockwatch Energy - Yesterday - SU In the oil sands, Suncor Energy Inc. (SU) added 94 cents to $44.23 on 12 million shares, after more than doubling its previously announced bond buyback program. It told bondholders in September that it would buy back up to $1.75-billion worth of various notes (specifically, 10 series of notes due from 2026 to 2024). Today it said the tenders came flooding in and reached a total of $5.05-billion. Suncor is splitting the difference and repurchasing $3.62-billion. "Our decision to significantly upsize the offer ... demonstrat[es] confidence in our business model and our commitment to reduce net debt," declared interim president and CEO Kris Smith.
A show of confidence must have struck Suncor as timely, given that mere weeks ago, S&P Global Ratings gave the company a "negative" outlook and downgraded its credit rating to BBB (the second-lowest rating that it is still investment-grade). Suncor seemed keen for the world to know that its cash flow and treasury are doing just fine, thank you very much. Alas, shareholders have remained aloof, with the $44 stock trading a steep discount to major oil sands competitors such as Canadian Natural Resources Ltd. (CNQ: $73.23) and Imperial Oil Ltd. (IMO: $64.87). One big question is who will take over as CEO of the company from the interim Mr. Smith. Unlike Peyto, Suncor did not have an "orderly and planned leadership succession" in mind when its former CEO, Mark Little, abruptly resigned in July after the latest in a string of fatalities at Suncor's operations. The company is still looking for a replacement.