Suncor Energy Inc. (NYSE:SU) reports today that production from its oil sands operations averaged 235,000 barrels/day for December. In October, production averaged 258,000 barrels/day. Third quarter production averaged 261,000 barrels/day. This is not the direction trend lines should be going.
In its third quarter report, Suncor noted that it expected to averageproduction of 235,000 barrels/day for the 2008 fiscal year. In today’srelease it estimated that annual production reached just 228,000barrels/day.
A combination of operational flubs and higher operating costs won’thelp the company’s full-year results either. Mining the oil sands is adifficult business in the best of times. With crude prices below$50/barrel, producing less might be a good thing. Investors apparentlyagree because Suncor’s share price is up nearly 5% this morning.
January 8, 2009