Suncor Energy Expands Portfolio with Acquisition of TotalEnergies’ Canadian Operations

Suncor Energy has expanded its operations by acquiring the Canadian assets of TotalEnergies. This transaction, conducted on Wednesday, involves a complete stake in the Fort Hills project, which boosts Suncor’s bitumen production capacity by 61,000 barrels per day and adds 675 million barrels of proved and probable reserves to its portfolio. With a value of CAD 1.47 billion (approximately $1.1 billion), the acquisition also ensures a long-term supply of bitumen from Suncor’s entirely owned Firebag and MacKay River assets to support the Base Plant upgraders after the Base Mine’s operational life ends.

On the same day, TotalEnergies divested its 50% stake in the Surmont asset, selling it to ConocoPhillips for CAD 4 billion (around $3 billion). Additionally, there are possible extra payments of CAD 440 million (approximately $330 million) based on future performance criteria.

When compared to its industry peers like Cenovus Energy, Suncor is navigating distinct market conditions. Currently, Suncor’s market capitalization is $59 billion, while Cenovus is valued at $52 billion. Notably, Suncor has a higher net debt of $14 billion, in contrast to Cenovus’s $6.4 billion.

Regarding dividends, Suncor provides a yield of 4.5%, surpassing Cenovus’s yield of 2%. However, historical performance shows varied total returns for both companies. Over the past three and five years, Suncor has achieved returns of 186% and 9%, respectively, while Cenovus has returned 338% and 138% to its shareholders.

This information sheds light on the recent performance and strategic actions of these energy firms, emphasizing the competitive landscape within the sector.