Suncor Energy reports first quarter 2021 results
Suncor had a successful first three months of 2021, benefiting from increased production and riding a wave of momentum from a strong finish to 2020 to register earnings of $746 million, or $0.49 per common share.
Funds from operations were at $2.11 billion for the first quarter, compared to $1.001 billion in the first quarter of 2020. The company reported a significant debt reduction during the quarter and showed an overall increase in production as well.
"Building on the previous quarter's operational momentum, Suncor generated $2.1 billion in funds from operations, far exceeding all of our capital expenditures and dividend commitments in the first quarter of 2021," said Mark Little, president and chief executive officer. "Strong operational performance, combined with the incremental free funds flow benefits from our strategic investments, have enabled us to make significant progress towards our annual debt reduction and share buyback targets. In fact, in the first quarter of 2021, we reduced our total debt by $1.1 billion and repurchased over $300 million in common shares, representing approximately 1% of our outstanding common shares."
Earnings in the first quarter included a FIFO inventory valuation gain of $373 million after-tax, compared to an operating loss of $421 million ($0.28 per common share) in the prior year quarter, which was impacted by a FIFO inventory valuation loss of $446 million after-tax. The company had net earnings of $821 million ($0.54 per common share) in the first quarter of 2021, compared to a net loss of $3.525 billion ($2.31 per common share) in the prior year quarter, which was impacted by $1.798 billion of non-cash after-tax asset impairment charges and a $1.021 billion unrealized after-tax foreign exchange loss on the revaluation of U.S. dollar denominated debt.
Suncor's total upstream production increased to 785,900 barrels of oil equivalent per day (boe/d) in the first quarter of 2021, compared to 739,800 boe/d in the prior year quarter, on combined upgrader utilization of 97% and record In Situ production. Together, the fourth quarter of 2020 and first quarter of 2021 represent the best sequential synthetic crude oil (SCO) production performance in the company's history.
In the first quarter of 2021, Oil Sands operations cash operating costs per barrel decreased by approximately 20% to $23.30 and Syncrude cash operating costs per barrel decreased by approximately 10% to $32.25 compared to the prior year quarter due to a combination of increased production and improved cost performance. Further cost reductions are anticipated via the implementation of digital technologies, which are currently underway, and the assumption of Syncrude operatorship on September 30, 2021.