The Successful Investor Hotline – Friday, September 25, 2015

Article Excerpt

SUNCOR ENERGY INC., $35.07, Toronto symbol SU, has agreed to buy an additional 10.0% of the Fort Hills oil sands project in northern Alberta from France’s Total S.A. Following the purchase, Suncor will own 50.8% of Fort Hills, while Total will hold 29.2%. Teck Resources (see below) will continue to own the remaining 20.0%. Owning a majority interest will make it easier for Suncor to cut costs and make other changes in response to low crude prices. The company will pay $310 million for this additional stake. To put that in context, its cash flow was $2.2 billion, or $1.49 a share, in the three months ended June 30, 2015. Suncor expects to complete the purchase by the end of this year. Construction on Fort Hills is now 40% complete, and it should start up in 2017. The project will eventually produce 180,000 barrels a day; Suncor’s share of 91,440 barrels is equal to 16% of its daily second-quarter output of 599,900…