Petro-Canada – former Toronto symbol PCA

Petro-Canada was Canada’s second largest integrated oil company. Its production centred on Western Canada before its sale to Suncor.

PETRO-CANADA was acquired by rival Suncor Energy Inc. (Toronto symbol SU) in August 2009.

Under the terms of the deal, Petro-Canada shareholders received 1.28 common shares of Suncor for each share they held, while Suncor investors got one share of the new company for each Suncor share they held. Petro-Canada shareholders ended up with about 40% of the combined company, which is now Canada’s largest integrated oil company in terms of market cap.

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As part of the deal, Suncor uses the Petro-Canada banner for its more than 1,500 retail gas stations.

Meantime, Suncor started up its Fort Hills oil sands development in 2018. It owns 54.11%, and operates the project. The other investors are France’s Total SA (24.58%) and Teck Resources (21.31%).

Fort Hills has the capacity to produce 180,000 barrels a day–although that fell in 2020 as the COVID-19 pandemic slowed global oil demand. However, Suncor restarted idled production at Fort Hills in the third quarter of 2020 and has now restored that lost output.

The stock now trades at a low 9.3 times the $4.14 a share that Suncor will probably earn in 2022.

Suncor’s dividend has now increased by an average 5.6% annually over the last 5 years. It yields a high 4.1%.

Suncor is a buy.

This article was originally published in 2009 and is regularly updated.

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