CALGARY, Alberta, Nov. 17 (UPI) -- The largest oil and gas company in Canada, Suncor said its production could increase more than 10 percent next year while spending moves the other way.
"We continue to focus on delivering on our commitments and making decisions that demonstrate capital discipline, while reflecting our long-term vision for the company," President and CEO Steve Williams said in a statement.
Suncor said it estimated production would be in the range of 680,000 to 720,000 barrels of oil equivalent per day next year and spending would fall somewhere between $3.5 billion and $3.8 billion.
The company said the production estimate would be a 13 percent increase year-on-year if is forecast is accurate and come from about a $746 million reduction in capital spending.
Upstream energy company Wood Group secured a work order from Suncor last month to help with well design at a site located about 75 miles northeast of Fort McMurray, where May wildfires curtailed about 1 million barrels per day worth of oil production. With Alberta's oil sector recovering, Wood Group said the costs associated with the well designs for Suncor were improved.
Suncor said its forecast was based on operating costs of about $25.50 per barrel, which marks a relative increase in crude oil prices over the year. Still, the company said its mid-range estimate for operating costs is about 37 percent from 2011.
"We will maintain the unwavering focus on cost management, which has helped us to generate strong cash flow throughout these past two years of low oil prices," Williams said.
A little less than half of the targeted spending for next year will go to two new oil production efforts slated to start production in early 2017. The rest is directed at sustaining legacy business and operating expenses.
Suncor completed its acquisition of rival Canadian Oil Sands Ltd. in March. Canadian Oil Sands was among the largest owners in the Syncrude operation in northern Alberta. Production there stands at around 350,000 barrels of oil per day, enough to meet the annual petroleum needs of 6.2 million Canadians.