In Toronto, the shares fell by as much as $1.80 or 8.9 per cent to $18.44 as financial analysts rated its new production guidance as negative but welcomed news the repair costs at the mine are expected to be covered by insurance.
“Despite the operational incident and all the challenges of 2020 — unprecedented drop in oil prices, global pandemic and economic slowdown — Suncor has continued to focus on safety and maximizing value through enhanced performance and lowering costs,” said CEO Mark Little in a statement.
“We’re pleased to be making progress on lowering costs at Fort Hills and Syncrude; we’ve opportunistically advanced maintenance at Base Plant and Firebag, brought on additional capacity at Firebag, and we believe this disciplined and strategic approach lays the foundation for strong performance in 2021.”
Base Plant production was restored to 165,000 barrels per day of mined bitumen at the end of August following repairs but Suncor said it would restrict output going forward to manage bitumen quality going to its upgraders.
It expects full rates of 300,000 bpd won’t be achieved until the middle of the fourth quarter.
Meanwhile, the Calgary-based company said it is working to restart the second extraction train at its Fort Hills oilsands mine this month, taking project production to between 120,000 and 130,000 bpd.
The train was shut down early this year because of low oil prices and Suncor now expects its 54 per cent interest in the project to produce an overall average for the year of between 60,000 and 65,000 bpd.
Bitumen production at Suncor’s Firebag thermal oilsands project, which produces the heavy oil by injecting steam through wells, is to be reduced to 110,000 bpd for four weeks as Suncor performs maintenance originally scheduled for 2022.
Suncor said it will use the time to bring on incremental emulsion handling and steam infrastructure to increase nameplate capacity by 12,000 bpd to 215,000 bpd, with the facility returning to normal operation by early November.
“While we view the update on the whole as slightly negative due to the extended timing of full output at the Base Mine, it is partially offset by news of a surprise 12,000 bpd debottleneck at Firebag to be completed by November after running Firebag near half capacity for several weeks, and the restart of the second train at Fort Hills in September,” said analyst Michael Dunn of Stifel FirstEnergy.
Full-year corporate production is now estimated at a midpoint of 695,000 barrels of oil equivalent per day, down 65,000 boe/d from 760,000 boe/d in revised guidance in March, Suncor said.
It had estimated it would produce 800,000 and 840,000 boe/d in its original 2020 guidance last December.