-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CGHI3PvLZ6H0qRXyb0+I6Pgo89uvWxcsZljuUounzE5MVjiBJ6P+1vwI3tisulWF vxCj6lRTrGcs0HP1YyoqUA== 0000912057-00-018947.txt : 20000421 0000912057-00-018947.hdr.sgml : 20000421 ACCESSION NUMBER: 0000912057-00-018947 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20000401 FILED AS OF DATE: 20000420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SUNCOR ENERGY INC CENTRAL INDEX KEY: 0000311337 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 000000000 STATE OF INCORPORATION: A0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 001-12384 FILM NUMBER: 605510 BUSINESS ADDRESS: STREET 1: 112 4TH AVENUE SW PO BOX 38 STREET 2: CALGARY ALBERTA CITY: CANADA T2P 2V5 STATE: A0 BUSINESS PHONE: 4032698100 MAIL ADDRESS: STREET 1: 112 FOURTH AVE SW BOX 38 STREET 2: CALGARY ALBERTA CITY: CANADA T2P 2V5 6-K 1 FORM 6-K FORM 6-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Report of Foreign Private Issuer Pursuant to Rule 13a - 16 or 15d - 16 of the Securities Exchange Act of 1934 For the month of: April 2000 Commission File Number: 1-12384 SUNCOR ENERGY INC. (Name of registrant) 112 FOURTH AVENUE S.W. P.O. BOX 38 CALGARY, ALBERTA, CANADA, T2P 2V5 Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F Form 40-F X --------- --------- Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the SEC pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: Yes No X --------- --------- If "Yes" is marked, indicate the number assigned to the registrant in connection with Rule 12g3-2(b): N/A EXHIBIT INDEX
EXHIBIT DESCRIPTION OF EXHIBIT - --------- ------------------------------------------------- EXHIBIT 1 1ST QUARTER REPORT TO SHAREHOLDERS FOR THE PERIOD ENDED MARCH 31, 2000
EXHIBIT 1 FIRST QUARTER 2000 [LOGO] Report to shareholders for the period ended March 31, 2000 Suncor Reports Record Quarterly Earnings RECORD OIL SANDS PRODUCTION, HIGHER COMMODITY PRICES AND IMPROVED REFINING MARGINS CONTRIBUTE TO SUNCOR'S EARNINGS IMPROVEMENT FIRST QUARTER HIGHLIGHTS (All financial figures are in Canadian dollars unless noted otherwise) - - Suncor Energy Inc.'s first quarter earnings for 2000 rose to a record $105 million ($0.89 per common share), up from $11 million ($0.09 per common share) in the first quarter of 1999. The improvement was primarily a result of increased commodity prices, record oil sands production and higher downstream refining margins. - - During the first quarter, cash flow from operations was a record $269 million ($2.33 per common share), compared with $93 million ($0.84 per common share) in the first quarter of 1999. Revenue for the quarter was $779 million compared with $469 million during the same period in 1999. Cash flow and revenue rose mainly as a result of the same factors that affected earnings. - - Partially offsetting the benefits of higher crude prices was a $51 million loss during the quarter as a result of Suncor's hedging program. This compares with a $10 million hedging gain in the first quarter of 1999. - - Total production of conventional and synthetic crude oil, natural gas and natural gas liquids reached a record 148,600 barrels of oil equivalent (BOE) per day, an increase from the 1999 first quarter average of 133,900 BOE per day. The increase was due to an average quarterly production record at Oil Sands of 114,800 barrels per day, which was partially offset by lower conventional production. [GRAPH] - - The $2 billion Project Millennium oil sands expansion made significant advances during the quarter, including the installation of major equipment such as the four coke drums and fractionator used in the new upgrader. By the end of the quarter, about 22% of the site construction and 89% of the engineering work had been completed. - - Project Millennium is under some cost pressure. The $2 billion project budget has increased by $150 million due to design changes to improve reliability and provide for the potential of increased production. In addition, overall costs could increase by 5 to 15% as a result of the strong Alberta economy. - - Suncor's Oil Sands business remains on track to achieve projected growth in production. Daily production is targeted to average 115,000 barrels per day in 2000, 130,000 barrels per day in 2001, 210,000 barrels per day in 2002 and 225,000 barrels per day in 2003. - - Suncor announced plans to reposition its natural gas business to improve profitability. The unit has set a goal of reducing annual expenses by $18 - $20 million by the end of the year and achieving a 10% return on capital within five years. - - Sunoco's net earnings rose to a first quarter record $19 million from $5 million in the first quarter of 1999 as a result of improved refinery earnings. - - The commissioning of the Stuart Oil Shale project in Australia remains behind schedule. Work to resolve technical issues continues, and a decision as to the technical and operational viability of the project is expected to be made later this year. [GRAPH] For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website: www.suncom 2 SUNCOR ENERGY INC. - FIRST QUARTER 2000 "Record Oil Sands production and a significant improvement in Sunoco's refinery margins during the quarter played a big role in driving us to our best quarter ever." RICHARD L. GEORGE, President and Chief Executive Officer [GRAPH] RECORD FIRST QUARTER EARNINGS REFLECT OPERATIONAL STRENGTHS Higher commodity prices played an important role in Suncor's record $105 million first quarter earnings, which were also strongly bolstered by excellent operating performance, says Rick George, president and chief executive officer. "Record Oil Sands production and a significant improvement in Sunoco's refinery margins during the quarter played a big role in driving us to our best quarter ever," says George. The benefits of high crude prices where partially offset by a $51 million hedging loss during the quarter. "Suncor pre-sells a portion of its future production at pre-set prices to reduce our exposure to low crude oil prices," says George. "This hedging program helps protect Suncor's ability to finance Project Millennium without having to issue equity and dilute our shareholders' interest in the company, and it has served our needs very well," says George. "Once this large capital project is complete, we plan to have a much less aggressive hedge position." SUNCOR ANNOUNCES PLANS TO REPOSITION EXPLORATION AND PRODUCTION On the day of the release of Suncor's first quarter results, the company also announced plans to reposition Exploration and Production into a natural gas business with a sharper focus on improved profitability. "We have been increasing our emphasis on natural gas for years now," says George. "But you are now going to see a real change in focus for us. Our plan calls for reducing annual expenses in this business by $18 to $20 million by the end of the year and achieving a 10% return on capital within the next five years." Suncor's natural gas business will concentrate on building competitive operating areas, improving base business efficiency and creating new low-capital businesses. [GRAPH] "These changes do not come without an impact on people," says George. "We will lose about 85 employees as we restructure the business. We are working to minimize this number by finding opportunities to place people within Suncor's other businesses." QUARTER SEES PROGRESS ON GROWTH PROJECTS The first quarter saw Suncor moving forward on a number of fronts. Construction work progressed on Project Millennium. By the end of the quarter, 89% of the engineering and 22% of site construction was completed, with most of the major equipment on site. The project remains on schedule, with commissioning activities planned for the second half of 2001. Project Millennium is under some cost pressure. "We have made some design changes to increase long-term reliability, with For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website: www.suncor.com 3 SUNCOR ENERGY INC. - FIRST QUARTER 2000 "Project Millennium is designed to make Suncor the lowest cost supplier of crude in North America, and we're still very much on track to achieve our goal." RICHARD L. GEORGE, President and Chief Executive Officer the potential for increased production from parts of the plant," says George. This change in scope is estimated to add $150 million to the project cost. "In addition we also have concerns about the strong Alberta economy, which could increase the overall project cost by 5 to 15%." George says these increases in Millennium costs are not expected to have a material impact on the project's return on capital or cash cost per barrel. "Project Millennium is designed to make Suncor the lowest cost supplier of crude in North America, and we're still very much on track to achieve our goal." Suncor's Oil Sands business continues to target average daily production of 115,000 barrels per day in 2000, 130,000 barrels per day in 2001, 210,000 barrels per day in 2002, and 225,000 barrels per day in 2003. During the quarter, Suncor announced intentions to invest a total of $750 million to increase Oil Sands upgrading capacity and to develop a commercial scale, in-situ bitumen recovery project on its Firebag properties, 40 kilometres northeast of the Oil Sands plant. Construction of the in-situ facility is expected to begin in 2001, pending regulatory and board of directors' approval. If approved, Oil Sands production is expected to increase to 260,000 barrels per day by the end of 2004. Suncor continues to assess integration opportunities to expand the company's reach into the North American refining market with potential joint ventures, acquisitions and other special long-term supply agreements with U.S. refiners. "Our work on downstream integration is an effort to drive additional synergistic value between our oil sands operation and the ultimate customer," says George. During the first quarter Suncor also announced plans to invest $100 million over the next five years in alternative and renewable energy. "This has the potential to be a viable, money-making business for Suncor, which can add value to the company," says George. "At the same time, we have an opportunity to enter a business that will benefit the environment and improve our quality of life." CONSOLIDATED FINANCIAL RESULTS Consolidated earnings for 2000 were $105 million ($0.89 per common share), compared with earnings of $11 million ($0.09 per share) in the first quarter of 1999. The increase in earnings was primarily a result of a more than a doubling of the benchmark WTI crude oil price, record Oil Sands production, higher natural gas prices, improved refining margins and lower interest expenses. These favourable factors were partially offset by hedging losses of $51 million in the For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website:www.suncor.com 4 SUNCOR ENERGY INC. - FIRST QUARTER 2000 [GRAPH] quarter (compared to a gain of $10 million in the first quarter of 1999), lower retail gasoline margins and higher non cash costs associated with overburden removal and depreciation at the Oil Sands operations. Cash flow from operations was $269 million ($2.33 per common share) compared to $93 million ($0.84 per common share) in the first quarter of 1999. The increase is primarily due to the same factors that increased earnings. BUSINESS UNIT PERFORMANCE OIL SANDS SETS RECORD QUARTERLY PRODUCTION RATE, EARNINGS AND CASH FLOW Oil Sands earnings rose to $90 million in the first quarter of 2000 compared with earnings of $17 million in the first quarter of 1999. Cash flow from operations rose to $199 million, up from $53 million in the first quarter of 1999. Higher crude oil prices, increased production and sales volumes and lower per-barrel cash operating costs contributed to the improved results. These positive factors were partially offset by crude oil hedging losses and higher non-cash charges. Oil Sands achieved a new production record, averaging 114,800 barrels per day in the first quarter of 2000, up 20% from the same period in 1999 when production was halted by an eight-day unplanned production outage. Oil Sands is targeting average annual production of 115,000 barrels per day for 2000. Sales in the quarter averaged 117,900 barrels per day compared to 91,300 barrels per day in the first quarter of 1999. [GRAPH] Cash operating costs per barrel declined to an average of $11.10 compared with cash operating costs of $12.55 in the first quarter of 1999. Higher sales volumes contributed to the improvement in cash operating costs. Oil Sands is targeting cash operating costs to average $11.50 for 2000. A fatal accident occurred on February 22 when two employees of a sub-contractor working on Project Millennium were in a truck explosion. One person was killed and another seriously injured. The accident is currently under investigation. "This incident has left all of us at Suncor deeply saddened," says Rick George. "The safety of everyone on this site is our highest priority. Our condolences go out to the family and friends of both men." SUNOCO EARNINGS STRENGTH DRIVEN BY STRONG REFINING MARGINS Sunoco's first quarter earnings were $19 million, compared with earnings of $5 million in the first quarter of 1999. Cash flow from operations was $46 million for the quarter compared with $23 million in the first quarter of 1999. Refining earnings were $16 million in the first quarter compared with a loss of $1 million for the same quarter last year. For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website:www.suncor.com 5 SUNCOR ENERGY INC. - FIRST QUARTER 2000 [GRAPH] The improvement is due to higher refining margins, which were influenced by strong seasonal North American distillate and gasoline margins, historically low gasoline inventories and a tight North American supply market. Sunoco's retail marketing earnings were $4 million, compared with earnings of $7 million in the first quarter of last year. Retail volumes were slightly ahead of last year. However, earnings declined as a result of lower retail margins as wholesale prices rose more quickly than they could be fully recovered at the retail outlets. The decline was partially offset by an improvement in non-gasoline revenues, including car wash and merchandise revenues at Sunoco service stations. Sunoco's Integrated Energy Solutions (IES) business had a loss of $1 million for the quarter compared with a loss of $1 million in the first quarter of 1999. EXPLORATION AND PRODUCTION CONTINUES STRATEGIC RE-POSITIONING Exploration and Production's (E&P) earnings increased to $8 million in the first quarter, up from $3 million in first quarter of 1999. The increase is attributable to higher crude prices and higher natural gas prices, which averaged $2.96 per million cubic feet (mcf) for the quarter, compared with $2.18 per mcf in the 1999 first quarter. Partially offsetting these favourable factors were higher crude oil hedging losses, lower production levels and higher royalties due to the improvement in commodity prices. Conventional production declined by 4,600 barrels per day during the first quarter, averaging 33,800 BOE per day compared with 38,400 BOE per day during the first quarter last year. The main factors contributing to the production decline are the impacts from 1999 property divestments and poor drilling results. E&P plans to pursue its property divestment program with a focus on selling oil properties. Property divestments planned for 2000 could generate over $250 million in proceeds, including the sale of Suncor's Burnt Lake property. Subsequent to the end of the quarter E&P completed the sale of a package of properties that generated $135 million in proceeds. The annual impact of the sale of these properties represents approximately 4,500 BOE of daily production. Due to the increased scope and acceleration of property divestments, conventional production for the year is now expected to average about 27,000 BOE per day as compared to E&P's original target of 30,000. Cash flow from operations for the quarter was $48 million compared with $42 million achieved in the 1999 first quarter. For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website:www.suncor.com 6 SUNCOR ENERGY INC. - FIRST QUARTER 2000 "[Alternative and renewable energy] has the potential to be a viable, money-making business for Suncor, which can add value to the company. At the same time, we have an opportunity to enter a business that will benefit the environment and improve our quality of life." RICHARD L. GEORGE, President and Chief Executive Officer STUART OIL SHALE PROJECT While commissioning remains behind schedule on Stage 1 of the Stuart Oil Shale Project, hot commissioning trials have demonstrated that oil can be produced from oil shale, but further assessment is required to determine whether the technology is viable. A decision as to the technical and operational viability of the project is expected to be made later this year. George says if Suncor decides not to proceed with further development the company would face a $55 million to $65 million write-off. SUNCOR ENERGY IS AN INTEGRATED CANADIAN ENERGY COMPANY WITH A LEADING POSITION IN CANADA'S OIL SANDS INDUSTRY. SUNCOR IS ALSO A CONVENTIONAL NATURAL GAS AND OIL PRODUCER IN WESTERN CANADA, OPERATES A REFINING AND MARKETING BUSINESS IN ONTARIO UNDER THE SUNOCO BRAND, AND IS PURSUING INTERNATIONAL GROWTH WITH AN OIL SHALE DEVELOPMENT PROJECT IN AUSTRALIA. AT THE SAME TIME AS SUNCOR MEETS TODAY'S ENERGY NEEDS, THE COMPANY IS ALSO INVESTING IN ALTERNATIVE AND RENEWABLE ENERGY FOR THE FUTURE. SUNCOR ENERGY COMMON SHARES AND PREFERRED SECURITIES ARE LISTED FOR TRADING ON THE TORONTO AND NEW YORK STOCK EXCHANGES (SYMBOL SU). Note: This news release contains forward-looking information. Actual future results may differ materially. The risks, uncertainties and other factors that could influence actual results are described in Suncor Energy's annual report to shareholders and other documents filed with regulatory authorities. For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website:www.suncor.com 7 SUNCOR ENERGY INC. - FIRST QUARTER 2000 Consolidated Statements of Earnings (unaudited)
Three months ended March 31 ($ millions) 2000 1999 - ------------------------------------------------------------------------------------------------- REVENUES 779 469 - ------------------------------------------------------------------------------------------------- EXPENSES Purchases of crude oil and products 155 79 Operating, selling and general 217 178 Exploration 10 14 Royalties 43 16 Taxes other than income taxes 84 77 Depreciation, depletion and amortization 91 75 Gain on disposal of assets (1) -- Interest -- 12 - ------------------------------------------------------------------------------------------------- 599 451 - ------------------------------------------------------------------------------------------------- EARNINGS BEFORE INCOME TAXES 180 18 - ------------------------------------------------------------------------------------------------- PROVISION FOR INCOME TAXES Current 7 4 Future 68 3 - ------------------------------------------------------------------------------------------------- 75 7 - ------------------------------------------------------------------------------------------------- NET EARNINGS 105 11 Dividends on preferred securities (6) (1) - ------------------------------------------------------------------------------------------------- Net earnings attributable to common shareholders 99 10 - ------------------------------------------------------------------------------------------------- PER COMMON SHARE (dollars) Net earnings 0.95 0.10 Dividends on preferred securities 0.06 0.01 - ------------------------------------------------------------------------------------------------- Net earnings attributable to common shareholders Basic 0.89 0.09 Diluted 0.87 0.09 - ------------------------------------------------------------------------------------------------- Cash dividends 0.17 0.17 - -------------------------------------------------------------------------------------------------
See accompanying notes. For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website: www.suncor.com 8 SUNCOR ENERGY INC. - FIRST QUARTER 2000 Consolidated Balance Sheets (unaudited)
March 31 December 31 ($ millions) 2000 1999 - ----------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents 3 5 Accounts receivable 342 277 Future income taxes 53 14 Inventories 169 161 - ----------------------------------------------------------------------------------------------- Total current assets 567 457 - ----------------------------------------------------------------------------------------------- Capital assets, net 4 909 4 528 Deferred charges and other 177 191 - ----------------------------------------------------------------------------------------------- Total assets 5 653 5 176 - ----------------------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings 15 32 Accounts payable 324 277 Accrued liabilities 256 339 Income taxes 5 15 Taxes other than income taxes 40 46 Current portion of long-term borrowings 1 1 - ----------------------------------------------------------------------------------------------- Total current liabilities 641 710 - ----------------------------------------------------------------------------------------------- Long-term borrowings 1 661 1 306 Accrued liabilities and other 246 236 Future income taxes 859 816 Shareholders' equity (see below) 2 246 2 108 - ----------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity 5 653 5 176 - ----------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY: Number Number - ----------------------------------------------------------------------------------------------- Preferred securities 17 540 000 514 17 540 000 514 Share capital 110 565 389 525 110 516 119 524 Retained earnings 1 207 1 070 - ----------------------------------------------------------------------------------------------- 2 246 2 108 - -----------------------------------------------------------------------------------------------
See accompanying notes. For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website: www.suncor.com 9 SUNCOR ENERGY INC. - FIRST QUARTER 2000 Consolidated Statements of Cash Flows (unaudited)
Three months ended March 31 ($ millions) 2000 1999 - ----------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Cash flow provided from operations (1), (2) 269 93 Increase in operating working capital Accounts receivable (65) (22) Inventories (8) (8) Accounts payable and accrued liabilities (36) (18) Taxes payable (16) (13) - ----------------------------------------------------------------------------------------------------- CASH PROVIDED FROM OPERATING ACTIVITIES 144 32 - ----------------------------------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES (2) (460) (184) - ----------------------------------------------------------------------------------------------------- NET CASH DEFICIENCY BEFORE FINANCING ACTIVITIES (316) (152) - ----------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Increase (decrease) in short-term borrowings (17) 1 Issuance of preferred securities -- 507 Stuart oil shale project borrowings -- 4 Repayment of commercial paper borrowings -- (491) Net increase in other long-term borrowings 360 179 Issuance of common shares under stock option plan 1 1 Dividends paid on preferred securities (3) (11) (1) Dividends paid on common shares (19) (19) - ----------------------------------------------------------------------------------------------------- CASH PROVIDED FROM FINANCING ACTIVITIES 314 181 - ----------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2) 29 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 5 26 - ----------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 3 55 - ----------------------------------------------------------------------------------------------------- PER COMMON SHARE (dollars) (1) Cash flow provided from operations 2.44 0.85 (3) Dividends paid on preferred securities (pre-tax) 0.11 (0.01) - ----------------------------------------------------------------------------------------------------- Cash flow provided from operations after deducting dividends paid on preferred securities 2.33 0.84 - -----------------------------------------------------------------------------------------------------
(2) See Schedules of Segmented Data See accompanying notes. Consolidated Statements of Changes in Shareholders' Equity (unaudited)
Preferred Share Retained ($ millions) Securities Capital Earnings - ------------------------------------------------------------------------------------------------------------------- AT DECEMBER 31, 1998 -- 518 981 Net earnings -- -- 11 Dividends paid -- -- (20) Issuance of preferred securities 507 -- -- Issued for cash under stock option plan -- 1 -- - ------------------------------------------------------------------------------------------------------------------- AT MARCH 31, 1999 507 519 972 - ------------------------------------------------------------------------------------------------------------------- AT DECEMBER 31, 1999 514 524 1 070 Net earnings -- -- 105 Dividends paid -- -- (25) Issued for cash under stock option plan -- 1 -- Income taxes - impact of new standard (note 1b) -- -- 57 - ------------------------------------------------------------------------------------------------------------------- AT MARCH 31, 2000 514 525 1 207 - -------------------------------------------------------------------------------------------------------------------
See accompanying notes. For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website: www.suncor.com 10 SUNCOR ENERGY INC. - FIRST QUARTER 2000 Common Share Information
2000 1999 - -------------------------------------------------------------------------------------- for the quarter ended March 31 Average number outstanding, weighted monthly (thousands) 110 532 110 233 - -------------------------------------------------------------------------------------- as at March 31 Share price at end of trading Toronto Stock Exchange - $Canadian 62.85 50.75 New York Stock Exchange - $U.S. 42.50 33.50 - -------------------------------------------------------------------------------------- Book value per common share - $Canadian 15.67 13.52 - $U.S. 10.78 8.95 - -------------------------------------------------------------------------------------- Common share options outstanding 3 309 854 3 125 440 - -------------------------------------------------------------------------------------- Ratios (unaudited) - -------------------------------------------------------------------------------------- as at March 31 Debt to debt plus shareholders' equity (%) 42.7 33.5 - -------------------------------------------------------------------------------------- Net tangible asset coverage on long-term debt (times) Before deduction of future income taxes 2.7 3.6 - -------------------------------------------------------------------------------------- After deduction of future income taxes 2.2 2.8 for the twelve months ended March 31 Debt to cash flow provided from operations (times) 1.8 1.8 - -------------------------------------------------------------------------------------- Interest coverage on long-term debt (times) Net income 6.7 3.4 - -------------------------------------------------------------------------------------- Cash flow from operations 10.7 7.5 - --------------------------------------------------------------------------------------
Notes to the Consolidated Financial Statements (unaudited) 1. ADOPTION OF NEW ACCOUNTING STANDARDS a) Employee future benefits Effective January 1, 2000, the company adopted new recommendations issued by the Accounting Standards Board of the Canadian Institute of Chartered Accountants for the recognition, measurement and disclosure of the cost of employee future benefits. Under this standard, a liability and an expense is recognized for all employee future benefits in the reporting period in which an employee has provided the service that gives rise to the benefits. The recommendations were adopted in a manner that produces recognized and unrecognized amounts for all of its benefit plans the same as those determined by application of accounting principles generally accepted in the United States. The new recommendations, which will not affect the company's cash flows or liquidity, have been adopted retroactively and prior periods' results have been restated. As a result, retained earnings were decreased by $34 million, accrued liabilities and other were increased by $57 million and future income taxes were decreased by $23 million at January 1, 2000. The impact of the new recommendations for the first quarter of 2000 was to increase operating, selling and general expenses by $3 million and decrease net earnings by $2 million after income tax credits of $1 million (1999 - increase operating, selling and general expenses by $6 million and decrease net earnings by $4 million after income tax credits of $2 million). b) Income taxes Effective January 1, 2000, the company adopted new recommendations issued by the Accounting Standards Board of the Canadian Institute of Chartered Accountants dealing with the accounting for income taxes. This standard requires the use of the asset and liability method for computing future income taxes. Under this method, future income taxes are recognized for the future income tax consequences attributable to differences between the financial statement carrying value and their respective income tax bases (temporary differences). Future income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which temporary differences are expected to be recovered or settled. The effect on future income tax assets and liabilities of a change in tax rates is included in net earnings in the period that includes the enactment date. Material changes in tax rates could result in volatility in net earnings in the periods affected. The amount of future income tax assets recognized is limited to the amount that is more likely than not to be recognized. Previously, the company followed the deferral method of accounting for income taxes, which was based on differences in the timing of reporting income and expenses in financial statements and tax returns. The new recommendations, which will not affect the company's cash flows or liquidity, have been adopted retroactively without restating prior periods. The cumulative effect at January 1, 2000 is to decrease future income taxes and increase retained earnings by $57 million. The new recommendations had no impact on net earnings for the first quarter of 2000. 2. COMPARATIVE FIGURES In addition to the restatement of prior periods' results for comparative purposes identified in note 1, adoption of the new accounting standards has resulted in changes to prior periods' capital employed, return on capital employed, affected ratios and indicators, and certain per common share calculations. 3. SUPPLEMENTAL INFORMATION
Three months ended March 31 ($ millions) 2000 1999 - ---------------------------------------------------------------- Interest paid 28 26 - ---------------------------------------------------------------- Income taxes paid 16 3 - ---------------------------------------------------------------- Interest expense Long-term interest cost 22 20 Capitalized interest (22) (8) - ---------------------------------------------------------------- -- 12 - ----------------------------------------------------------------
11 SUNCOR ENERGY INC. - FIRST QUARTER 2000 Schedules of Segmented Data (unaudited)
Exploration Corporate Oil Sands and Production Sunoco and Eliminations Total ($ millions) 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 - ---------------------------------------------------------------------------------------------------------------------------- EARNINGS Three months ended March 31 REVENUES Sales and other operating revenues 151 99 46 20 581 349 -- -- 778 468 Intersegment revenues 191 65 44 50 -- -- (235) (115) -- -- Interest -- -- -- -- -- -- 1 1 1 1 - ---------------------------------------------------------------------------------------------------------------------------- 342 164 90 70 581 349 (234) (114) 779 469 EXPENSES Purchases of crude oil and products -- 3 -- -- 382 184 (227) (108) 155 79 Operating, selling and general 109 86 23 19 73 69 12 4 217 178 Exploration -- -- 10 14 -- -- -- -- 10 14 Royalties 25 7 18 9 -- -- -- -- 43 16 Taxes other than income taxes 3 2 -- 1 81 74 -- -- 84 77 Depreciation, depletion and amortization 55 38 23 24 13 13 -- -- 91 75 Gain on disposal of assets -- -- (1) -- -- -- -- -- (1) -- Interest -- -- -- -- -- -- -- 12 -- 12 - ---------------------------------------------------------------------------------------------------------------------------- 192 136 73 67 549 340 (215) (92) 599 451 - ---------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES 150 28 17 3 32 9 (19) (22) 180 18 Income taxes (60) (11) (9) -- (13) (4) 7 8 (75) (7) - ---------------------------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) 90 17 8 3 19 5 (12) (14) 105 11 - ---------------------------------------------------------------------------------------------------------------------------- CAPITAL EMPLOYED as at March 31 1 520 1 324 709 784 469 537 (66) (70) 2 632 2 575 - ---------------------------------------------------------------------------------------------------------------------------- RETURN ON AVERAGE CAPITAL EMPLOYED (%) Twelve months ended March 31 17.2 11.4 6.4 3.1 8.6 6.6 -- -- 11.4 7.3 - ---------------------------------------------------------------------------------------------------------------------------- CASH FLOW BEFORE FINANCING ACTIVITIES three months ended March 31 CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES: Cash flow provided from (used in) operations Net earnings (loss) 90 17 8 3 19 5 (12) (14) 105 11 Exploration expenses Cash -- -- 4 6 -- -- -- -- 4 6 Dry hole costs -- -- 6 8 -- -- -- -- 6 8 Non-cash items included in earnings Depreciation, depletion and amortization 55 38 23 24 13 13 -- -- 91 75 Future income taxes 57 10 (4) -- 6 -- 9 (7) 68 3 Current income tax provision allocated to Corporate 3 1 13 -- 7 4 (23) (5) -- -- Gain on disposal of assets -- -- (1) -- -- -- -- -- (1) -- Other 3 (1) (1) 1 1 1 (4) 2 (1) 3 Overburden removal outlays (8) (12) -- -- -- -- -- -- (8) (12) Increase (decrease) in deferred credits and other (1) -- -- -- -- -- 6 (1) 5 (1) - ---------------------------------------------------------------------------------------------------------------------------- Total cash flow provided from (used in) operations 199 53 48 42 46 23 (24) (25) 269 93 Decrease (increase) in operating working capital (93) (44) (20) 6 (25) (39) 13 16 (125) (61) - ---------------------------------------------------------------------------------------------------------------------------- Total cash provided from (used in) operating activities 106 9 28 48 21 (16) (11) (9) 144 32 - ---------------------------------------------------------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES: Capital and exploration expenditures (406) (109) (40) (59) (5) (3) (6) (14) (457) (185) Deferred maintenance shutdown expenditures -- (2) -- -- -- -- -- -- -- (2) Deferred outlays and other investments (3) -- -- -- (3) -- -- (1) (6) (1) Proceeds from disposals -- -- 3 4 -- -- -- -- 3 4 - ---------------------------------------------------------------------------------------------------------------------------- Total cash used in investing activities (409) (111) (37) (55) (8) (3) (6) (15) (460) (184) - ---------------------------------------------------------------------------------------------------------------------------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES (303) (102) (9) (7) 13 (19) (17) (24) (316) (152) - ----------------------------------------------------------------------------------------------------------------------------
For more information please contact: Media Inquiries: Ron Shewchuk (403) 269-8655 Investor Relations: John Rogers (403) 269-8670 Visit Suncor's website: www.suncor.com 12 SUNCOR ENERGY INC. - FIRST QUARTER 2000 Quarterly Operating Summary (unaudited)
For the quarter ended Total Year - ----------------------------------------------------------------------------------------------------------------------------- MAR 31 Dec 31 Sept 30 June 30 Mar 31 2000 1999 1999 1999 1999 1999 - ----------------------------------------------------------------------------------------------------------------------------- OIL SANDS PRODUCTION (a) 114.8 113.2 101.5 112.0 95.5 105.6 SALES (a) - - light sweet crude oil 67.7 62.8 52.1 41.3 54.6 52.7 - - diesel 8.7 9.5 8.4 6.8 7.9 8.2 - - light sour crude oil 41.5 35.1 47.5 54.8 28.8 41.3 - ----------------------------------------------------------------------------------------------------------------------------- 117.9 107.4 108.0 102.9 91.3 102.2 - ----------------------------------------------------------------------------------------------------------------------------- AVERAGE SALES PRICE (b) - - light sweet crude oil 34.35 30.81 27.23 24.47 20.55 26.06 - - other (diesel and light sour crude oil) 28.46 25.91 21.45 19.60 19.18 21.48 - - total 31.84 28.77 24.24 21.57 20.00 23.84 - - total* 39.19 33.72 27.56 22.29 18.52 25.89 CASH OPERATING COSTS (1),(c) 11.10 11.15 12.35 10.90 12.55 11.70 TOTAL OPERATING COSTS (2),(c) 15.50 15.10 15.30 14.30 15.60 15.05 EXPLORATION AND PRODUCTION GROSS PRODUCTION** Conventional - - crude oil (a) *** 8.1 7.9 8.4 9.7 10.8 9.2 - - natural gas liquids (a) 3.5 4.0 4.1 4.1 4.7 4.2 - - natural gas (d) 222 219 231 225 229 226 - - total (e) 33.8 33.8 35.6 36.3 38.4 36.0 Non-conventional - - crude oil (a) *** 1.4 1.3 1.0 1.2 1.3 1.2 Total production (e) 35.2 35.1 36.6 37.5 39.7 37.2 AVERAGE SALES PRICE - - crude oil - conventional (b) 26.30 25.21 20.55 20.48 18.48 20.94 - - crude oil - non-conventional (b) 26.91 20.89 21.46 13.55 9.87 16.27 - - total crude oil (b) 26.39 24.61 20.65 19.70 17.57 20.40 - - total crude oil (b)* 36.58 31.08 27.30 20.95 15.60 23.12 - - natural gas liquids (b) 33.16 27.12 22.81 16.70 11.88 19.32 - - natural gas (f) 2.96 2.96 2.48 2.15 2.18 2.44 - - natural gas (f)* 2.97 3.11 2.58 2.17 2.10 2.48 NET WELLS DRILLED Conventional - exploratory **** 2 10 6 1 2 19 - development 4 4 1 2 -- 7 - ----------------------------------------------------------------------------------------------------------------------------- 6 14 7 3 2 26 - ----------------------------------------------------------------------------------------------------------------------------- SUNOCO REFINED PRODUCT SALES (g) Transportation fuels Gasoline - retail ***** 4.0 4.3 4.0 4.2 4.0 4.1 - other 3.8 3.8 3.8 3.9 3.3 3.7 Jet fuel 1.1 0.9 1.2 1.0 1.1 1.1 Other 2.8 2.9 2.8 2.7 2.3 2.7 - ----------------------------------------------------------------------------------------------------------------------------- 11.7 11.9 11.8 11.8 10.7 11.6 Petrochemicals 0.6 0.8 0.8 0.7 0.6 0.7 Heating oils 0.7 0.5 0.1 0.3 0.8 0.4 Heavy fuel oils 0.7 0.5 0.4 0.6 0.5 0.5 Other 0.6 0.5 0.8 0.7 0.5 0.6 - ----------------------------------------------------------------------------------------------------------------------------- 14.3 14.2 13.9 14.1 13.1 13.8 - ----------------------------------------------------------------------------------------------------------------------------- NATURAL GAS SALES (d) 84 90 87 86 93 89 - ----------------------------------------------------------------------------------------------------------------------------- MARGINS (h) Refining (3) 5.4 4.3 4.8 3.3 3.4 4.0 Retail (4) 6.8 7.2 6.9 7.6 7.9 7.4 CRUDE OIL SUPPLY AND REFINING Processed at Suncor refinery (g) 11.4 10.2 11.2 10.4 10.8 10.6 Utilization of refining capacity (%) 102 92 100 93 97 95 - -----------------------------------------------------------------------------------------------------------------------------
* Excludes the impact of hedging activities. ** Currently all E&P production is located in the Western Canada Sedimentary Basin. *** Before deducting first quarter 2000 Alberta Crown royalty of 1.0 thousand barrels per day (first quarter 1999 - 0.6 thousand barrels per day). **** Excludes exploratory wells in progress. ***** Excludes sales through joint venture interests. (a) thousands of barrels per day (b) dollars per barrel (c) dollars per barrel rounded to the nearest $0.05 (d) millions of cubic feet per day (e) BOE per day (f) dollars per thousand cubic feet (g) thousands of cubic metres per day (h) cents per litre DEFINITIONS (1) Cash operating costs - operating, selling and general expenses, crude oil and products purchases, taxes other than income taxes and overburden cash expenditures for the period. (2) Total operating costs - cash and non-cash operating costs (total Oil Sands expenses less royalties in Schedules of Segmented Data). (3) Refining margin - average wholesale unit price from all products minus average unit cost of crude oil. (4) Retail margin - average street price of Sunoco branded retail gasoline minus refining gasoline price. METRIC CONVERSION Crude oil, refined products, etc. - 1 m3 (cubic metre) = approx. 6.29 barrels Natural gas - 1 m3 (cubic metre) = approx. 35.49 cubic feet SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. SUNCOR ENERGY INC. By: Date: April 20, 2000 "JANICE B. ODEGAARD" ------------------------------------ JANICE B. ODEGAARD Assistant Secretary -----END PRIVACY-ENHANCED MESSAGE-----