Canada's Suncor trims spending

Company recently won bid for rival Canadian Oil Sands in hostile effort.
By Daniel J. Graeber  |  Feb. 5, 2016 at 9:01 AM
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CALGARY, Alberta, Feb. 5 (UPI) -- Canadian energy company Suncor, after a success hostile takeover of a rival, reported a fourth quarter net loss of almost $1.5 billion.

The company reported an operating loss of $18.9 million and a net loss of $1.45 billion for the fourth quarter. Suncor, one of the partners in the mega Syncrude oil sands processing facility in Alberta, said the results reflected a depressed oil market and a weak exchange on the U.S. dollar.

"To maintain our strong financial position and flexibility," the company said it was trimming its spending plans for the year by just over 10 percent to around $4.5 billion.

Moody's Investors Service last month changed the long-term debt rating for Alberta from stable to negative. A long slump in crude oil prices means the provincial government faces a risk of fiscal deterioration. Recent analysis from Wood Mackenzie finds Canada's crude oil market may bear the brunt of the weakened oil economy.

Suncor said that, despite the spending cut, its near-term production target was not impacted.

Suncor in late 2015 made a hostile bid to acquire all stocks in Canadian Oil Sands. Both companies are stakeholders in the Syncrude oil sands processing facility in Alberta, though Canadian Oil Sands holds the most shares in the operation. The deal was hotly contested, before Canadian Oil Sands gave in last month. Williams said his company offered a deal that would give rival shareholders a safe haven in the weakened crude oil market and Friday defended the company's track record on dividends.

"In 2015 we generated cash flow that exceeded our annual sustaining capital and dividend commitments," he said.

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