Suncor Energy Inc. · TSX:SU
Suncor Energy — Investor Presentation (September 2017)
36 slides from Suncor Energy's investor presentation, Sep 6, 2017
Slide 1: Suncor Energy Investor Information
SUNCOR ENERGY INVESTOR INFORMATION PUBLISHED SEPTEMBER 6, 2017 FORT HILLS OVERBURDEN REMOVAL OPERATIONS
Slide 2: Investment Proposition
2 INVESTMENT PROPOSITION GROWTH CASH GENERATION STRONG PRODUCTION1 INCREASE FROM PROJECTS IN FLIGHT SIGNIFICANT UPSIDE FFO3 SENSITIVITY TO WTI, BASED ON TTM4 ACTUALS (MBPD) US$49 WTI, 0.75 C$/US$, US$14.30 NYH CRACK SPREAD (C$ BILLION) 800 $14 10% $12 700 PLANNED CAGR2 $10 PER SHARE (2016-19) 600 6%
Slide 3: The Foundation of Our Strategy
3 THE FOUNDATION OF OUR STRATEGY OPERATIONAL EXCELLENCE 0.46 >90% 19% 30% YTD 2017 RIF1 COMBINED AVERAGE UTILIZATION REDUCTION IN OIL SANDS TARGET REDUCTION IN OF OIL SANDS UPGRADING AND CASH COSTS2 YTD 2017 VS GHG INTENSITY BY 2030 DOWNSTREAM ASSETS YTD 2017 YTD 2016 OPERATIONS SAFETY UTILIZATION C
Slide 4: Growing Production
4 GROWING PRODUCTION SUNCOR’S PRODUCTION GROWTH FORECAST1 (MBPD) ~10% HEBRON 2016-2019 PLANNED CAGR2 PER SHARE 800 E&P 700 SYNCRUDE 600 500 FORT HILLS 400 BASE OS 300 FIREBAG MACKAY 200 BASE MINE 100 PLANNED U2 FB U1 MAINTENANCE3 0 2015 2016 2017 2018 2019 GUIDANCE MIDPOINT PLANNED PLANNED 1, 2, 3 S
Slide 5: Cost Reductions Across the Corporation
$37.05 5 R&M COST REDUCTIONS ACROSS THE CORPORATION E&P $37.05 R&M Oil $37.05 Sands E&P Poly. R&M (R&M) $37.05 COMPANY OS&G BELOW 2014 LEVELS, EVEN AS PRODUCTION INCREASES ~30% CONSISTENT REDUCTIONS IN OPERATING COSTS C$/BBL R&M Oil Sands Poly. E&P (E&P) $37.05 E&P O IL SSands Poly. R&M Oil (R&M) (O
Slide 6: Generating Discretionary Free Cash Flow
6 GENERATING DISCRETIONARY FREE CASH FLOW1 FFO2 CONSISTENTLY EXCEEDS SUSTAINING CAPITAL, ASSOCIATED 2017 SUSTAINING CAPITAL AND DIVIDEND CAPITALIZED INTEREST AND DIVIDENDS (C$ BILLIONS) BREAK-EVEN8 $8 $6.8 $6 ~US$ 37.00 WTI $6.0 BREAK-EVEN $4 $1.6 $1.9 $2 $2.7 $2.3 $0 2015 2016 2017 E WTI US$3 $48.7
Slide 7: Near Term Flexible Capital Allocation Plan
7 NEAR TERM FLEXIBLE CAPITAL ALLOCATION PLAN1 PRODUCTION PRODUCTION GROWTH CAPITAL1 GROWTH BALANCE SHEET DIVIDEND3 BUYBACKS3 POST 2019 TO 20192 DEFER 10% CAGR DEBOTTLENECKING AND UPPER END OF GROW WITH $40 WTI $4.0B NONE PER SHARE PRE-ENGINEERING ON LEVERAGE METRICS PRODUCTION REPLICATION INVEST IN
Slide 8: Strong Balance Sheet
8 STRONG BALANCE SHEET CONSERVATIVE DEBT TARGETS DEBT METRICS - AS AT JUNE 30, 2017 <3X NET DEBT TO FFO1 1.7X NET DEBT TO FFO1 20-30% TOTAL DEBT TO CAPITALIZATION 26% TOTAL DEBT TO CAPITALIZATION INVESTMENT GRADE CREDIT RATING $8.1B LIQUIDITY A — DBRS RATING LIMITED (A LOW) STABLE CASH & CASH EQUIVA
Slide 9: Returning Cash to Shareholders
9 RETURNING CASH TO SHAREHOLDERS 15 YEARS OF CONSECUTIVE ANNUAL DIVIDEND INCREASES ACROSS PRICE AND BUSINESS CYCLES $120 BUYBACK PER SHARE1,2,5 $2.50 DIVIDEND PER SHARE1 ILLUSTRATIVE BUYBACK PER SHARE3 $100 WTI US$ $2.00 $80 $1.50 (C$/SHARE) ACTUAL BUYBACKS/SHARE (US$/BBL) AS AT JUNE 30, 20175 $60 $
Slide 10: Typical Attributes of North American Oil Plays
10 TYPICAL ATTRIBUTES1 OF NORTH AMERICAN OIL PLAYS INITIAL DECLINE SUSTAINING OPERATING RECOVERY ILLUSTRATIVE ANNUAL CASH FLOW PROFILES2 CAPITAL RATE COSTS COST FACTOR MINING HIGH ZERO VERY LOW MEDIUM VERY HIGH IN SITU MEDIUM LOW LOW LOW HIGH OFFSHORE HIGH HIGH MEDIUM VERY LOW MEDIUM TIGHT OIL 50 Ye
Slide 11: Comparison of Suncor & Tight Oil
11 COMPARISON OF SUNCOR & TIGHT OIL CONSISTENT FREE CASH FLOW1,2 (EXCLUDING MPIP*) SUSTAINABLE PRODUCTION GROWTH THROUGH THE DOWNTURN US$/BBL YEAR-OVER-YEAR CHANGE, LIQUIDS ONLY $40 30% $19 $20 $21 20% $20 $11 $9 10% $0 0% -$20 -10% -$40 -20% -30% -$60 -40% -$80 -50% -$100 -60% 2012 2013 2014 2015 2
Slide 12: Growth and Cash Generation Superior to Majors
12 GROWTH AND CASH GENERATION SUPERIOR TO MAJORS CONSISTENTLY GROWING TOTAL BOE PRODUCTION PER SHARE SUPERIOR FUNDS FROM OPERATIONS1 PER TOTAL BOE OF PRODUCTION US$/BOE 15% $60 12% 10% $48 5% $50 $45 5% $42 5% 3% $40 0% $30 $25 -5% $20 $20 -10% $10 -15% -20% $- 2012 2013 2014 2015 2016 2012 2013 201
Slide 13: Track Record of Counter-Cyclical Acquisitions and Divestments
13 TRACK RECORD OF COUNTER-CYCLICAL ACQUISITIONS ( ) AND DIVESTMENTS ( ) $100 WTI US$/BBL $80 NON-CORE UK OFFSHORE ROSEBANK $60 FORT HILLS, WI PETRO-CANADA 10% ADDITIONAL WI $40 CANADIAN OIL SANDS $20 MURPHY SYNCRUDE WI $40 NYH 3-2-1 US$/BBL $30 PIONEER RETAIL NETWORK $20 VALERO COMMERCE CITY CONOCO
Slide 14: Agile Capital Deployment - Next Generation SAGD Development
14 AGILE CAPITAL DEPLOYMENT - NEXT GENERATION SAGD DEVELOPMENT SAVING TODAY REDESIGNING TOMORROW SIMPLIFIED SUSTAINING WELL PADS, AT EXISTING ASSETS, DESIGNED WITH COMPLETE REDESIGN OF CENTRAL PROCESSING FACILITY (CPF) FOR GREEN FIELD INCREASED AUTOMATION IN SITU REPLICATION NEW IN SITU WELL PAD COM
Slide 15: Replication – Next Phase of Oil Sands Organic Growth
15 REPLICATION1 – NEXT PHASE OF OIL SANDS ORGANIC GROWTH FIRST ENERGY COMPANY TO RECEIVE APPROVAL FOR MULTIPLE IN SITU DEVELOPMENT PHASES UNDER THE ALBERTA ENERGY REGULATOR’S TRIAL SUBMISSION PROCESS FOR MEADOW CREEK EAST PHASES OF 40 MBPD NEXT GENERATION IN SITU ~10 FACILITIES (REPLICATION) PHASES
Slide 16: Fort Hills – Phasing into Commissioning & Operations
16 FORT HILLS – PHASING INTO COMMISSIONING & OPERATIONS KEY METRICS1 CONSTRUCTION • >90% CONSTRUCTION COMPLETE 50.8% • PEAK SITE WORKFORCE LEVEL REACHED IN Q4 2016 • REMAINING CONSTRUCTION FOCUS IS ON SECONDARY EXTRACTION SUNCOR WORKING INTEREST COMMISSIONING $80-$83 / K BPD • PROGRESSIVE TURNOVER &
Slide 17: Fort Hills – Designed for Safe, Reliable, Low-Cost Ramp-Up
17 FORT HILLS – DESIGNED FOR SAFE, RELIABLE, LOW-COST RAMP-UP AND OPERATIONS BASED ON REGIONAL BENCHMARKING, SUNCOR HAS INVESTED SIGNIFICANT CAPITAL TO MEET OR EXCEED PERFORMANCE TARGETS INVESTMENTS INCLUDED IN PRE-SANCTION DESIGN WITH ASSOCIATED CAPEX1 6-MONTHS PRE-STRIPPING (~$120M) RAMP-UP ACCELE
Slide 18: Syncrude: Significant Progress and Opportunities
18 SYNCRUDE: SIGNIFICANT PROGRESS AND OPPORTUNITIES1 >90% <30 $/BBL 2020 TARGET RELIABILITY TARGET CASH COST2 TARGET YEAR OBJECTIVE OPPORTUNITIES ESTIMATED BENEFIT3 • BITUMEN PRODUCTION FORUM IN PLACE (MINING, TAILINGS, EXTRACTION) PERFORMANCE • BITUMEN PROCESSING FORUM IN PLACE (UPGRADING) $1.0-1.5
Slide 19: Oil Sands Production Expected to be >700 MBPD by 2019
19 OIL SANDS PRODUCTION EXPECTED TO BE > 700 MBPD BY 20191 INTEGRATED SUITE OF OIL SANDS ASSETS OFFERS OPTIONALITY FOR LOW CAPITAL INTENSITY GROWTH AND MARGIN IMPROVEMENT FIREBAG • FURTHER POTENTIAL DEBOTTLENECK OPPORTUNITIES4 • CAPACITY2: 203 MBPD BITUMEN BASE MINE EXTRACTION • TURNOVER TO AUTONOMO
Slide 20: Report on Sustainability
20 REPORT ON SUSTAINABILITY1 SUSTAINABILITY OPTIMIZES OPPORTUNITY AND MINIMIZES RISK SAFETY ABOVE ALL ELSE GHG REDUCTION SOCIAL GOAL RECORD IMPROVEMENT IN OUR COMBINED EMPLOYEE AND GOAL TO REDUCE GHG INTENSITY BY 30% BY 2030. PLANNING YEAR WITH FOCUS ON FOUR AREAS CONTRACTOR RECORDABLE INJURY FREQUE
Slide 21: Appendix
21 APPENDIX SuNCoR)
Slide 22: Canada's Leading Integrated Energy Company
22 CANADA’S LEADING INTEGRATED ENERGY COMPANY $77B ENTERPRISE VALUE1 JUNE 30, 2017 35+ YEARS 2P RESERVE LIFE INDEX2 AS AT DEC. 31, 2016 632 99% OIL PRODUCTION MBOEPD YTD 2017 462 MBPD REFINING CAPACITY >500 PRODUCT SALES MBPD YTD 2017 >1530 RETAIL SITES IN NORTH AMERICA 1, 2 SEE SLIDE NOTES AND ADVI
Slide 23: 2017 Capital and Production Guidance
23 2017 CAPITAL AND PRODUCTION GUIDANCE1 2017 CAPITAL2 GROWTH CAPITAL3 PRODUCTION4 $ MILLIONS PERCENT BOEPD UPSTREAM5 4,735 – 4,875 60% 420,000 – 450,000 OIL SANDS OPERATIONS DOWNSTREAM 625 – 675 0% 130,000 – 145,000 SYNCRUDE CORPORATE 40 – 50 0% 115,000 – 125,000 E&P 425,000 – 445,000 REFINERY THRO
Slide 24: Returning Cash to Shareholders
24 RETURNING CASH TO SHAREHOLDERS DIVIDEND GROWTH LEADER DIVIDEND GROWTH LEADER FIVE YEAR DIVIDEND GROWTH RELATIVE TO GLOBAL PEERS1 (Q2 2012 – Q2 2017) % DIVIDEND GROWTH, 2010 BASELINE 200% 200% 120 100 $94.90 $94.20 $97.95 80 100% $93.00 SUNCOR $79.50 100% 60 $48.75 40 $43.35 0% 20 0% 0 2010 2011 2
Slide 25: Vast Portfolio of High Quality Opportunities
25 VAST PORTFOLIO OF HIGH QUALITY OPPORTUNITIES1 CONTINUED GROWTH AND MARGIN OPPORTUNITIES POST 2019 IN SITU MINING UPGRADING/REFINING E&P • SYNCRUDE UPGRADING BEYOND GROWTH, • MEADOW CREEK • FORT HILLS SECONDARY 90% RELIABILITY • ODA OPTIMIZATION & • LEWIS EXTRACTION • MONTREAL COKER • ROSEBANK DEB
Slide 26: Market Access for Oil Sands Production
26 MARKET ACCESS FOR OIL SANDS PRODUCTION SUNCOR CURRENTLY HAS APPROXIMATELY 750 MBPD OF NEAR-TERM MARKET ACCESS1 PROPOSED PROJECTS COULD PROVIDE SUNCOR WITH EXPANDED PIPELINE CONNECTIVITY TO MARKETS PIPELINE CURRENT AND FORECASTED GROSS PIPELINE CAPACITY2 GATHERING LINES TMPL FORT MCMURRAY 300 MBPD
Slide 27: Refining & Marketing – The Value of Integration
27 REFINING & MARKETING – THE VALUE OF INTEGRATION R&M ANNUAL NET EARNINGS1 SUNCOR PEERS1 REFINERY UTILIZATION VS. US AVERAGE SUNCOR US$/BBL OF CAPACITY PERCENT OF REFINING CAPACITY HIGH US AVERAGE2 $15 AVERAGE LOW 100% $10 90% $5 $0 80% 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 YTD 2017 PRI
Slide 28: High Quality Mining, In Situ and Upgrading Portfolio
28 HIGH QUALITY MINING, IN SITU AND UPGRADING PORTFOLIO1 BASE PLANT SYNCRUDE 350,000 BPD CAPACITY SYNCRUDE OPERATED SUNCOR WORKING INTEREST 100% 188,000 BPD COKING CAPACITY (SU WI) 1,619 MMBBLS 2P RESERVES SUNCOR WORKING INTEREST 53.74% 1,316 MMBBLS 2P RESERVES (SU WI) FIREBAG FORT HILLS 203,000 BPD
Slide 29: Offshore with >410 Million Barrels of 2P Reserves
29 OFFSHORE WITH >410 MILLION BARRELS OF 2P RESERVES1 TERRA NOVA HIBERNIA SUNCOR ENERGY OPERATED EXXONMOBIL OPERATED SUNCOR WORKING INTEREST 37.675% SUNCOR WORKING INTEREST 20.0%2 43 MMBOE 2P RESERVES (SU WI) 88 MMBOE 2P RESERVES (SU WI) WHITE ROSE BUZZARD HUSKY ENERGY OPERATED NEXEN PETROLEUM UK OP
Slide 30: Canada's Largest Refining & Marketing Business
30 CANADA’S LARGEST REFINING & MARKETING BUSINESS EDMONTON REFINERY SARNIA REFINERY 142,000 BPD CAPACITY 85,000 BPD CAPACITY 100% OIL SANDS FEEDSTOCK1 ~75% OIL SANDS FEEDSTOCK1 COMMERCE CITY REFINERY MONTREAL REFINERY 98,000 BPD CAPACITY 137,000 BPD CAPACITY ~20% OIL SANDS FEEDSTOCK1 RECEIVING CRUDE
Slide 31: Advisories
31 Advisories Forward-Looking Statements – This presentation contains certain of assets; and the timing and impact of technology development. 31, 2013 (2013 MD&A), and for 2014, 2015 and 2016 are defined and “forward-looking statements” within the meaning of the United States reconciled in Suncor’s
Slide 32: Slide Notes
32 Slide Notes Slide 2-------------------------------------------------------------- every 100 workers. GAAP Measures in the Advisories. (1) Production excludes North America onshore, Libya and Syria for (2) Refers to Oil Sands operations cash operating costs per barrel, Slide 6---------------------
Slide 33: Slide Notes (continued)
33 Slide Notes (continued) Slide 7-------------------------------------------------------------- Slide 11------------------------------------------------------------- Slide 15------------------------------------------------------------- (1) Based on current business plans, which are subject to chang
Slide 34: Slide Notes (continued)
34 Slide Notes (continued) Slide 20 ------------------------------------------------------------- Limited, ConocoPhillips Co., Devon Energy Corporation, Encana transportation costs for Suncor’s Edmonton, Denver, Sarnia and (1) Sustainability plans and goals may not be achieved. See Forward- Corporat
Slide 35: Notes
35 Notes SuNCoR)
Slide 36: Investor Relations Contacts
INVESTOR RELATIONS CONTACTS STEVE DOUGLAS DAVID BURDZIUK VALERIE ROBERTS EVER MOTIS VICE PRESIDENT IR MANAGER IR SENIOR ANALYST IR ASSOCIATE IR [email protected] [email protected] [email protected] [email protected] VISIT US AT THE INVESTOR CENTRE ON SUNCOR.COM 1-800-558-9071 [email protected]
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