Suncor Energy Inc T.SU

Q1/2023 COP CC Second Question by Neil Mehta On Surmont

[ztransforms173]

https://seekingalpha.com/article/4600093-conocophillips-cop-q1-2023-earnings-call-transcript

z173

[Experienced]

Thanks ztransforms and kudos for your patience!!! The response by COP was actually more than I expected them to make.  Usually a company will say something like "This is an active item on our agenda and when there is a development we will let the investment know the results". So what's in the tea leaves? 1....For sure they are not going to sell their 50% to SU unless SU is

[Obscure1]

I got the sense from the answers that COP is happy with their investment in Surmont because it is "low cost low risk investment" that requires minimal CAPEX I did not get the feeling that COP wants to increase their CAPEX by $4 billion for the project.  The fact that COP's current position in Surmont meets their investment goals DOES NOT necessarily mean they want to add to

[ztransforms173]

- more color in the COP CC - there is some huge tax loss carryforwards being bought by SU on the Fort Hill and Surmont properties with the TotalEnergies acquisitions - so not only a long-life low-decline high-capital efficiency SAGD asset but there are very tempting tax pools in the 50% Surmont property transfer - sort of like a MEG Energy type situation - in the Q1/2023 COP results on the

[Obscure1]

I appreciate teh math z173. Maybe I'm missing something when it comes to tax loss carry forwards.  Not in the numbers themselves, but rather in the fact that there are huge losses in the first place.  When Suncor bought Teck's share of Fort Hills, Suncor took a big writedown.  When the transaction took place, accounting practices dictated that the entire asset value of the

[Experienced]

Thanks Obscure and the others... nice to see intelligent conversation here compared to other Boards on SH Obscure from this post and your other one... In simple terms, from my previous post, the answer by COP to the analyst question suggests to me that COP has no interest in selling their remaining 50% interest to SU. With the tax loss provisions, the question then becomes a math question for

[TheCrazyAcct]

Interesting comments regarding Forest Hill and Surmont.  Let us assume that COP exercises their option, Suncor is left with Forest Hill for a cost of $1 to $2 billion.  If a significant portion of the cost is consumed by tax credits, what is the actual cash cost to Suncor? Perhaps Suncor didnt get assurance that COP will not exercise the option prior to the announcement - instead the

[Experienced]

If you look at the Suncor PR you will see that there are two separate deals.  The Fort Hills deal was supposedly closed on May 1 and the Surmont deal closing (subject to the COP ROFR) is a wishy washy 3Q 2023. What is unknown (at least to me) is the nature and structure of the tax pool.  For example is the pool split between each deal or is it just Fort Hills?  When can the tax

[PabloLafortune]

FYI, international petroleum "IPCO" a Lundin co. Just FID'd Blackrod. Has approval for 80,000 bpd. Been in pilot for 10 years. $800MM phase I 30,000 bpd.  That and MEG could be options for Suncor if COP exercises.

[Obscure1]

Pablo:  Please expand upon your comments as the info might be really useful to myself and others. TIA

[mrmomo]

I douby very much that Suncor, a solely Oil Sands ONLY entreprise would be interested in the MEG. Maybe some parts of MEG, like the heavy oil & oil sands, IF MEG ever decided to spin those out, maybe. But NOT as Meg is structured right now. Suncor with it's acquisition of Total's entire interest in FH, along with doubling down on the Oil Sands with a forray into Surmont, more or less

[Experienced]

mrmomo...Good points my friend... That said, let's talk about a possible scenario -  1......oil demand stays flat for the foreseable future 2....the price of oil stays in and 85 a barrel in inflation adjusted prices 3....SU does not get approval to extend the Base Plant  By the early 2030s, SU will need to secure sufficient feedstock for the upgrader to offset the production

[mrmomo]

1......oil demand stays flat for the foreseable future Agree......i don't see WTI oil prices revisiting above $100 anytime soon, UNLESS either nukes are involved somewhere OR some unforseen backswan event happens. So energy prices will be "flat" & will be kept at these levels NOT to BK Europe, Asia & South America. BUT they will BK Russia if they stay below $70 for any

[PabloLafortune]

There is an oil and gas public company trading on Stockholm and Toronto stock exchange called International Petroleum.  Symbol IPCO on TSX.  About 50,000 boepd. They have oil and gas assets in France (5K boepd), Asia (5K boepd), and Canada (rest). Canada is mostly thermal heavy oil Onion Lake and natural gas. The company is controlled by the Lundin family. They have been running an oil

[Oldnagger]

Glad to see your post, I have been a shareholder for a very long time. The attractions for me are many , including a huge contingent resource of heavy oil and the willingness of the company to rapidly reduce their share count, which of course leads to an even greater amount of reserves per share. Meanwhile, backing by the Lundin group gives them not only access to expertise, but also to financing