Suncor Energy Inc T.SU

Fancy ciphering implies forward PE < 4.43 Rev +>$1.48B Q1/Q4

[Clemxb7]

Approximately (at the very least) : $1,477,689,311 CAD increased revenues Q12022 $CAD .

So... using the assumption that WTI will average $14.19 USD higher Q1/Q4.(This is a conservative assumption with WCS much higher than $15, some oil is sold for Brent prices) 

Q4 average price = $78.29 USD
Jan $83.92 USD Feb $93.54 USD Mar $100 USD (est)) = Q1 = ~$92.48 USD WTI

$92.48 - $78.29 = $14.19

Average Suncor daily production boe (daily) 743,000 (Q4 ave)

So…. $14.19 x 743,000 x 90 (days in quarter) = ~$948,885,300 USD increase in quarterly revenue from oil production

So... using the assumption that Crack SpreadsI will average $5.00 USD higher Q1/Q4.Crack spreads have been quite Q1/Q4 high still I will use $5.00 USD to represent the increase to be very conservative.

477,000 barrels cracked per day ave Q4 x 90 = ~$214,650,000 increased revenues from cracking Q1/Q4

$948,885,300 USD + $214,650,000 =$1,163 535,300 x 1.27 (USD/CAD) =
Approximately (at the very least) : $1,477,689,311 CAD increased revenues Q12022 $CAD .

This more than the increase in revenues from Q3(2021)/Q4(2020) though close. In that case net earnings increased by about a billion $. This quarter Q1/Q4 is larger than that and occurred over a much small time frame .Further ROC increased by 15.5% Q3(2021)/Q4(2020). Could we be looking at a ROC of >30% this quarter? 

Back of the napkin calculation says earnings should approximately double Q4 adjusted earnings of $1.07 to >$2.14 which implied a forward PE = $37.98 / (4 x $2.14) = 4.43.

[Obscure1]

Interesting way of getting to your number.  Not how I was trained but the rules all went out the window a long time ago.    I think you have left out some pretty important stuff  but maybe you were just trying to be conservative.    I expect that the upstream production in Q1 is likely to be close to the high end of guidance which could add up to 30,000

[Clemxb7]

Yes. So I deliberately used conservative assumptions like averaging Q1 WTI at $92.48 USD because I did these quick calculations for my own edification to get my mind around what Q1 “might” look like at the very least in a general sense . For instance I believe Suncor will easily exceed my estimation of +$1.5 billion increase in revenues for the reasons you mention and a few others like Petro