Suncor Energy Inc. · TSX:SU
Suncor Energy — Q2 2016 Earnings Presentation
32 slides from Suncor Energy's earnings presentation, Jul 27, 2016
Slide 1: Cover Photograph — Fort Hills hydraulic shovel
Cover Photograph — Fort Hills hydraulic shovel SUNCOR
Slide 2: Suncor investment thesis
Suncor investment thesis Growth from inflight projects Cash generation upside sensitivity Benchmarked off YTD 2016 $1598M CFOPs? and 39.80 US$ realized Brent pricing, 0.75 C$/US$, US$13.93 NYH crack spread Production’ increase mbpd 850 750 6% 150% Incremental CFOPs planned sensitivity to Brent prici
Slide 3: Suncor value proposition
Suncor value proposition Operational excellence Optimizing the base business ¢ safety as a core value ¢ industry leading reliability ¢ disciplined cost management leader in sustainability Capital discipline Rigorous capital allocation process vast portfolio of high quality organic growth opportuniti
Slide 4: Strong production growth through the end of the decade
Strong production growth through the end of the decade mmm Suncor’s production growth forecast’ (mbpd) Hebron 800 E&P’ 700 Syncrude 600 500 Fort Hills sa Base Oil Sands Firebag oun MacKay 200 Base Mine 100 Major Oil Sands Turnarounds? 0 2015 2016 2017 2018 2019 on Guidance mid-point Planned Planned
Slide 5: Sustainable cost reductions
Sustainable cost reductions Operating, selling and general expenses Oil Sands cash operating costs* C$ billions C$/bbl (~60% Controllable cost savings) $~1B 1.3 $~700M Syncrude additions (COS/Murphy) 2014 2015 Target2016' Target 20162 2013 2014 2015 YTD 2016 (Ex COS & Murphy) (Incl. COS & Murphy) Co
Slide 6: Capital Discipline
Capital Discipline Capital program spending (C$ billions) expected to decline post Fort Hills and Hebron (9.7) 2016 peak spend on Fort Hills @ @ and Hebron ~$2.7B, 2017 expected to drop to ~$1.4B' ® 2017+ Oil sands sustaining capex expected to marginally increase as Fort Hills and additional 277, Sy
Slide 7: Superior capital efficiency versus the large integrateds
Superior capital efficiency versus the large integrateds' Large integ rateds!: Average annual spend of US$ 23.4B? resulting in a 7% production decline since 2005 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Suncor’: Average annual spend of US$ 5.4B25 resulting in a 180%? production increas
Slide 8: Capital allocation priorities
Capital allocation priorities ¢ YC 14 consecutive years of dividend increases % 157 MM shares repurchased (2011-2015) C$ 34.05 average repurchase price >150% dividend growth over the past 5 years Committed toa Dividends‘ competitive, sustainable, and growing dividend Mi. Share buy- Opportunistic bac
Slide 9: Building value through counter-cyclical acquisitions and divestments
Building value through counter-cyclical acquisitions (47) and divestments ($) BC“ ets“ C,.,SCO*=E—=E=F eee $100 | J WTIUSS$/bbI Non-core UK offshore Fort Hills, 10% additional WI Petro-Canada Canadian Oil Sands Murphy Syncrude WI BB ONYH 3-2-1 Us$/bbI Pioneer retail network Valero Commerce City refi
Slide 10: Suncor's acquisitions of additional Syncrude working interest
10 Suncor’s acquisitions of additional Syncrude working interest nn March 21206 June 23206 53.74% ~55K simbpd HB syncruce properties Suncor & other JV properties COS transaction Closing date Murphy transaction Closing date total Suncor WI As at June 23, 2016 capital intensity? Capital intensity of a
Slide 11: Fort Hills progress
11 Fort Hills progress 50.8% Suncor working interest 91 mbpa production capacity net to Suncor, planned S6. 5B capital cost estimate’ net to Suncor from project sanction to first oil >60% construction complete as at June 30, 2016 100% overseas module fabrication complete as at June 30, 2016 30M ny c
Slide 12: Returning cash to shareholders
12 Returning cash to shareholders Historical dividend growth Leads global peer group? Annual dividend per share Five year dividend growth (Q2 2011 — Q2 2016) 200% 0.73 100% | 7 7 mae TTT Suncor 2012 2013 2014 2015 2016" Expected 100% 29¢ quarterly dividend per share’ ~3.2% salina get" 0 5-year divid
Slide 13: Financial strength in a challenging environment
Financial strength in a challenging environment 13 conservative debt metrics net debt to CFOPs' target below 3x June 30, 2016 3.0x total debt to capitalization? target between 20%-30% June 30, 2016 28% liquidity cash & cash equivalents ($3B) plus available credit facilities? as at June 30, 2016 $8.8
Slide 14: Market access for inland oil production
Market access for inland oil production 14 Suncor has approximately 700 mbpd of near-term access to globally priced markets’ SaihFrancisco ero Los Angeles Fort McMurray [Rail 40+ ] 40+ Rae oa) Cushing ° armen City ad & a we. Chicago Patoka =) 1, 2, 3 See Slide Notes and Advisories. sr Quetiec city °
Slide 15: Refining & Marketing — the value of integration
1) Refining & Marketing — the value of integration Suncor Peers High e a aera Low R&M net earnings’ US$/bbl of capacity 15 e) 10 e i) - in ‘Ei im ; | i | | i 2012) 2013 «42014 2015 LTM® Price Realizations and Refinery Crude Costs? Six months ended June 30, 2016 98% inland feedstock YTD 2016 C$ 59.30
Slide 16: Oil Sands production expected to exceed mbpd by 2019
16 Oil Sands production expected to exceed 700 mbpd by 2019! Debottlenecks, brownfield expansions and growth projects expected to raise total Oil Sands production from 463 mbpd (2015) to greater than 700 mbpd. Firebag + Further potential debottleneck opportunities + 23 mbpd debottleneck completed in
Slide 17: Technology development portfolio
IZ Technology development portfolio" ® Reduce GHG emissions Reduce costs & improve Reduce tailings/ water / intensity profitability land footprint Surface process (lean facility development) Enhanced SAGD recovery processes (steam + additives) In Situ Steam generation technology (e.g. DCSG*) Non-ste
Slide 18: Achieving operational excellence through continuous improvement
18 Achieving operational excellence through continuous improvement eee Maintaining our focus and applying operational excellence outside of normal operations Operational Excellence Reliability Significantly improve the reliability of our business Environment & Sustainability Go beyond compliance in
Slide 19: Leadership on addressing climate change
19 Leadership on addressing climate change Published first GRI* First response to CDP? Introduction of seven- compliant Report investor report followed by Call fora CEO participation Call for an economy- point action plan on Sustainability CDP water report carbon levy in EcoFiscal Commission wide pr
Slide 20: Appendix
20 Appendix a SUNCoR )
Slide 21: Canada's leading integrated energy company
Canada’s leading integrated energy company enterprise value’ June 30, 2016 $74B 5 1 1 mboepd 2) Oil Sands ©) Fort Hills C-) Firebag MacKay — Syncrude River © S) Base Plant & Millennium Fort @ McMurray East Coast Canada Edmonton oF Calgary Hibernia Montreal “ StiJohn=¢White Rose z -) | ‘Terra Nova t
Slide 22: 2016 Capital and production guidance
22 2016 Capital and production guidance’ LE 2016 Capital? Growth capital* Upstream production* $ millions Percent boepd Upstream® 5,250 — 5,600 65% 375,000 — 395,000 Oj! Sands Operations Downstream 700 — 800 5% 105,000 - 115,000 Syncrude® Corporate 50 - 100 5% 105,000 -110,000 E&P 420,000 —- 440,000
Slide 23: Comparing typical attributes of North American oil plays
Comparing typical attributes of North American oil plays! Fort Hills Tight Oil 23 Illustrative annual cash flow profile based off peak production at Fort Hills of 91 mbpd (Suncor WI)? years Tight Oil SAGD Mining Offshore Initial Capital Low Medium High High Reinvestment Cycle Short Medium Ultra long
Slide 24: Significant technology development focus
24 Significant technology development focus Feasip ility: Commercial technology® 7 e@ Surfactant & NCG Co-Injection® AHS® @ Mining & Extraction @ Upgrading & Refining ects Non viable prjee sa 1,2, 3, 4, 5, 6, 7 See Slide Notes and Advisories. SUNCOR ) @e<
Slide 25: High quality mining, in situ and upgrading oil sands portfolio
25, High quality mining, in situ and upgrading oil sands portfolio’ Base Plant 350,000 bpd capacity Suncor working interest 100% 1,662 mmbbls 2P reserves Syncrude Syncrude operated 188,000 bpd capacity (SU WI) Suncor working interest 53.74% 2,264 mmbbls 2P reserves (SU WI)? Fort Hills Suncor operate
Slide 26: Offshore oil projects with ~470 million barrels of 2P reserves
26 Offshore oil projects with ~470 million barrels of 2P reserves! Terra Nova Hibernia ExxonMobil operated Suncor working interest 20.0%? 92.0 mmboe 2P reserves (SU WI)? Suncor Energy operated Suncor working interest 37.675% 44.4 mmboe 2P reserves (SU WI) White Rose Husky Energy operated Suncor work
Slide 27: Canada's largest refining & marketing business
27 Canada’s largest refining & marketing business’ Edmonton Refinery 142,000 bpd capacity 100% oil sands feedstock? Sarnia Refinery 85,000 bpd capacity ~75% oil sands feedstock? Montreal Refinery 137,000 bpd capacity Receiving crude volume from Line 9 ~30% oil sands feedstock? Commerce City Refinery
Slide 28: Advisories
Advisories 28 Forward-Looking Statements — This 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 legislation (coll
Slide 29: Slide Notes
Slide Notes PO ____-—-—--- eee Slide 2. (1) (2) (3) (4) (5) Slide 4- (1) (3) Slide 5. Production excludes North America onshore, Libya and Syria for all years including 2019 planned. Production estimate may vary materially from actual production in the future. See Forward-Looking Statements in the A
Slide 30: Slide Notes (continued)
Slide Notes (continued) 30 Slide 9- (1) Full year pricing assumptions taken from Suncor’s 2016 guidance. See Forward-Looking Statements in the Advisories. Slide 10 (1) Suncor’s working interest in Syncrude includes the 36.74% interest in Syncrude acquired on February 5, 2016 and a further 5% of Sync
Slide 31: Slide Notes (continued)
Slide Notes (continued) 31 Slide 19. (1) Global Reporting Initiative (GRI) (2) Carbon Disclosure Project (CDP) (3) Figure includes both direct and indirect CO2e emissions. No credit is taken for GHG reductions due to cogen export or purchased offsets. See Suncor’s 2016 Report on Sustainability for f
Slide 32: Investor Relations Contacts
Investor Relations Contacts Vice President IR Manager IR 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] SUNCoR )