The Successful Investor Hotline – Thursday, May 6, 2016

Article Excerpt

SUNCOR ENERGY INC., $33.84, Toronto symbol SU, has had to reduce production at its main oil sands operations about 25 kilometres north of Fort McMurray, Alberta, due to severe wildfires. In the quarter ended March 31, 2016, these operations accounted for 95% of Suncor’s bitumen production. The fires have also slowed production at the Syncrude oil sands facility, about 35 kilometers north of Fort McMurray. Suncor recently purchased an additional 5.0% interest in the operation. It now owns 53.74% of project. Its latest share purchase was for $937 million. That’s equal to 1.4 times the company’s first quarter cash flow of $682 million, or $0.45 a share. The wildfires have also forced other oil sands operations in the area to suspend or reduce their production. Fears of a long shutdown have pushed up oil prices, and should help Suncor and others offset some of the lost revenue. OUR RECOMMENDATION: Suncor is still a buy. Suncor recent coverage April 2016 issue Hotline for March 24,…