Suncor Energy cuts capital spending by $588.11m

Canadian oil and gas company Suncor Energy has reduced its capital spending outlay for next year by around C$750m ($588.11m).

As per the revised guidance, the company intends to invest between C$4.5bn and $5bn ($3.52bn-$3.92bn) next year, targeting average upstream production of 740,000 to 780,000 barrels of oil equivalent per day (boepd).

The revised target represents a year over year production increase of more than 10%.

Suncor Energy president and CEO Steve Williams said: “During an extended period of low oil prices, we’ve demonstrated that we can generate significant free cash flow and strong returns for shareholders while continuing to drive down our operating costs and delivering significant future growth by executing two major projects.

“With first oil at both Fort Hills and Hebron expected by year-end, we’re bringing on new production at the same time as oil prices are rising to their highest level in several years.

“As we look to 2018, with increasing production and reduced capital spending, we’re well-positioned to return more free cash flow to shareholders through dividends and share buybacks.”

The company expects cash operating costs for its Fort Hills project to steadily decrease throughout the year as owing to an increase in production to 90% of capacity.

According to Suncor, around a quarter of its capital spending programme will be directed towards upstream growth projects in the Oil Sands and Exploration & Production businesses.