Suncor announces $7.2B capital budget

CALGARY—Suncor Energy Inc. plans capital spending of between $7.2 billion and $7.8 billion in 2015, with the Calgary-based integrated oil giant saying average production is expected to be between 540,000 to 585,000 barrels of oil equivalent per day.

“Our production guidance for next year reflects a continued trend of improved reliability and steady growth,” president and CEO Steve Williams said in a statement released after markets closed.

“We remain focused on driving down our oilsands cash operating costs, underscoring our commitment to creating value for shareholders.”

The higher end of the capital spending range matched that of a year ago, but this past July the company reduced its target for 2014 by $1 billion to $6.8 billion.

Suncor said that about 55 per cent or up to $4.3 billion of the 2015 capital spend is expected to go towards growth projects, with more than $2 billion earmarked for the oilsands segment.

About 45 per cent, or up to $3.5 billion, is expected to be allocated towards sustaining capital investments focused on “safe, reliable and efficient operations across the company’s assets,” it added.

“Our disciplined approach to building a strong balance sheet and prudently managing our capital program has positioned us to execute on our strategy even during periods of lower crude prices,” Williams said.

“We will continue to invest in both our base business and in our key growth projects going forward and would expect to generate free cash flow even with Brent oil prices in the US$80 to US$85 per barrel range.”

Brent crude, a benchmark for oils used by many U.S. refineries, closed down 84 cents at US$78.47 on Tuesday.

In additional to its 2015 guidance, Suncor also confirmed information in its Q3 release that total production for 2014 is anticipated to be in the low end of its annual guidance range, with oilsands production slightly below the lower end of the guidance range.