Suncor Energy Inc. · TSX:SU
Suncor Energy — Q2 2012 Earnings Presentation
27 slides from Suncor Energy's earnings presentation, August 2012
Slide 1: Growth Integration Value Creation
Growth Integration Value Creation Investor Information August 2012 1
Slide 2: Legal notice
Legal notice Forward-Looking Statements - This investor presentation contains certain “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislati
Slide 3: Legal notice (Continued …)
Legal notice (Continued …) Oil Sands cash operating costs for the following quarters (3 months ended) are defined and reconciled in the following documents: (i) Q2 2012 and Q2 2011 – Non-GAAP Financial Measures Advisory Section of Suncor’s MD&A dated July 24, 2012; (ii) Q1 2012 and Q1 2011 – Non-GAA
Slide 4: Contents
Contents Our company and resource 5-8 • Oil sands pioneer, ongoing leadership position Strategy 9 - 15 • Lower risk, oil sands focused growth • Optimized netbacks through forward integration Operations overview 16 - 22 • Operational excellence driving improved reliability and profitability Financial
Slide 5: Canada's premier integrated energy company
Canada’s premier integrated energy company with an unparalleled resource base and growth opportunities What differentiates Suncor Over 35 years of production at current rates (1) • Largest reserves in the oil sands* Billions of Barrels Contingent Resources (2) • Strategic balance between mining, 2P
Slide 6: Oil-weighted assets that provide strong cash flow
Oil-weighted assets that provide strong cash flow used to fund growth and return cash to shareholders 6
Slide 7: Largest resource base in the oil sands
Largest resource base in the oil sands monetized through a balanced portfolio of mining, in situ and upgrading Joslyn Mine Fort Hills Mine Firebag In Situ Suncor 100% Syncrude Mine & Upgrader Mocal 5% FORT MacKAY Murphy 5% North Steepbank Mine Nexen 7.23% Suncor 12% Sinopec 9.03% Suncor 100% Imperia
Slide 8: Oil Sands Base Operations
Oil Sands Base Operations close integration of producing assets Pipeline connections with Firebag 1 Upgraders 1&2, MNU 2 Wapisiw Lookout NSE future (reclaimed tailings pond) 7 expansion 6 NSE 3 Crude oil tank terminal 1 4 Voyageur Upgrader site 5 2 5 Tailings ponds 5 6 TROTM facilities 4 3 7 Coke st
Slide 9: Strategy
SUNCOR 9 ENERGY
Slide 10: Rich suite of upstream growth opportunities
Rich suite of upstream growth opportunities capital discipline and balanced growth to optimize value Planned Net Target Capacity kbpd First Oil Firebag 3 62.5 2011 Firebag 4 62.5 2013 In Flight Golden Eagle 16 2014/15 8% annual Hebron(2,3,4) 27 growth target Fort Hills(2,3) 67 Pre-Sanction Voyageur
Slide 11: In situ and mining projects
In situ and mining projects similar full-cycle economics Illustrative Comparison of Standalone Projects In Situ Bitumen Mined Bitumen WTI ($ per barrel) 70—90 70—90 Total Supply Cost ($ per barrel) 45—55 45—55 (initial and sustaining capital, opex, royalties and taxes discounted at 11%) Initial Capi
Slide 12: Integrated model to deliver long-term shareholder value
Integrated model to deliver long-term shareholder value low-cost cash flow from conventional assets funds long-life assets To provide greater reliability and flexibility to our We produce natural gas as feedstock supplies, we produce bitumen through mining A staged approach to increasing crude oil p
Slide 13: Access to global market pricing
Access to global market pricing able to optimize value of our crude oil production Upstream Crude Approximate Production Market Exposure (1) 69% 4% 4% WTI-based prices WTI- 61% based prices 4% mid-stream logistics Oil Sands 85% 96% Global-based prices Refining & Marketing 7% 24% 31% Brent- based pri
Slide 14: Technology is fundamental to how we do business
Technology is fundamental to how we do business success occurs by pursuing multiple opportunities simultaneously Winning in situ technologies (impact base assets) - Surfactant Pilot - Solvent Extraction - Steam-Quality Technology - Membrane De-Oiling and Water Treatment analy z e rs - Non-Condensabl
Slide 15: Reducing our environmental footprint
Reducing our environmental footprint accountable to clear and measurable goals 15
Slide 16: Operations overview
Operations overview SUNCOR VO RY
Slide 17: Oil Sands operations set new production records
Oil Sands operations set new production records operational excellence programs driving improved reliability Mine Production Extracted Bitumen Upgraded Production (millions tonnes) (kbpd) (kbpd) 30 600 350 500 300 250 20 400 200 300 150 10 200 100 100 50 0 0 0 2008 2009 2010 2011 2012 2008 2009 2010
Slide 18: In Situ operations leading Suncor's growth
In Situ operations leading Suncor’s growth demonstrated track record of growth Exceptional portfolio of projects and properties In Situ growth led by Firebag and MacKay River ● Reliable production at MacKay River and Firebag, 150 MacKay River approaching 10 years in production experience Production
Slide 19: Refining & Marketing – optimizing the oil sands barrel
Refining & Marketing – optimizing the oil sands barrel industry leading performance R&M Net Earnings (1) (US dollars per barrel of capacity) Suncor Top quartile Median of peers (2) Bottom quartile 15 10 5 0 -5 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2010 2011 2012 (1) Imperial Oil and US-based comp
Slide 20: Exploration & Production – high quality asset base
Exploration & Production – high quality asset base low-cost cash flow supports investment in long-life assets E&P production, cash flow and earnings • Conventional low cost production Operating earnings (1) • Largely Brent-based pricing 50 Cash flow from operations (1) 400 • Reduces Suncor’s average
Slide 21: Exploration & Production – Terra Nova Off-Station Program
Exploration & Production –Terra Nova Off-Station Program focused on improving Reliability, Safety and Environmental Excellence Three Major Work Scopes ● Integrated Swivel Turnaround Replacement of water injection swivel, ongoing maintenance, mandatory Water injection regulatory inspections, lifeboat
Slide 22: 2012 Production outlook and turnaround summary
2012 Production outlook and turnaround summary > 90% crude oil production 2011 Production 2012 Production Actual (boe/d) Outlook (boe/d) Oil Sands 304,700 325,000 — 345,000 Syncrude 34,600 36,000 — 38,000 North America Onshore 64,700 52,000 — 57,000 East Coast Canada 65,600 50,000 — 55,000 Internati
Slide 23: Financial outlook
Financial outlook SUNCOR DD eee
Slide 24: Stable operating costs
Stable operating costs targeting $35 per barrel or less in oil sands cash operating costs (1) Oil Sands Cash Operating Costs Unscheduled downtime ($C/bbl) OPEX U2 Turnaround OPEX assuming normal 50 production (2) $35/bbl 40 30 1 Reliability 20 2 Productivity 10 0 3 Technology Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
Slide 25: 2012 Capital expenditure outlook
2012 Capital expenditure outlook $7.5 billion in capital expenditure - almost 50% growth focused 2012 Outlook Sustaining Capital Growth Capital Base $ millions $ millions $ millions Oil Sands 5,085 2,885 2,200 Oil Sands Base 1,780 1,555 225 In Situ 1,830 860 970 Oil Sands Ventures 1,475 470 1,005 E&
Slide 26: Financial strength
Financial strength disciplined and focused strategy to deliver shareholder value 1 Net debt under $6 billion (0.6 X cash flow) 2 Return on capital approaching 15% 12 Months Ended 12 Months Ended Return on Capital Employed(1) June 30, 2011 June 30, 2012 (Percent) Net debt / Excluding major projects i
Slide 27: Delivering shareholder value
Delivering shareholder value accelerating return of cash to shareholders Returning Cash to Shareholders Dividends and share repurchases per share 1 Annual dividend raised 18% in Q2 2012 • 21% dividend CAGR over past five years Share Repurchases 1.50 Cash Dividends 1.25 2 Buy-back of up to $1.5 billi