Suncor Energy to acquire 5% stake in Syncrude Canada for $743m

Oil and gas producer Suncor Energy has agreed to acquire a further 5% stake in Syncrude Canada from Murphy Oil’s subsidiary, for approximately C$937m ($743m).

With the latest transaction, Suncor’s interest in the Syncrude joint venture in Alberta will increase from the existing 48.74% to 53.74%.

Suncor Energy president and CEO Steve Williams said: "This transaction is a strategic fit for our portfolio, given the quality of the resource, our existing interest in Syncrude and the potential for value creation.

"It is consistent with our focus on capital and operational discipline, and builds on our successful acquisition of Canadian Oil Sands, increasing our production capacity by 17,500 barrels per day of high-quality, light sweet synthetic crude.

"This growth gives us even more leverage to oil prices as they recover."

The oil sands property averaged 15,600 barrels of oil equivalent per day during the first quarter of 2016.

Suncor expects to grow production by more than 40% and reach 800,000 barrels per day in 2019.

Murphy Oil president and CEO Roger Jenkins: "We are pleased to announce this transaction with a strategic buyer as we continue with the repositioning of our portfolio.

"The sale of Syncrude will further place our focus in North America on our unconventional assets, while simultaneously strengthening the financial flexibility of our balance sheet."

The transaction is subject to closing conditions, including regulatory approval under the Competition Act and is expected to close during mid-2016.