EX-1 2 a2028458zex-1.txt EXHIBIT 1 EXHIBIT 1 [LOGO] THIRD QUARTER 2000 Report to shareholders for the Period ended September 30, 2000. Strong Operational Earnings on Strengthened Operational Performance and Higher Prices REVISED COST ESTIMATE FOR PROJECT MILLENNIUM THIRD QUARTER HIGHLIGHTS (All financial figures are in Canadian dollars unless otherwise noted.) - Suncor Energy Inc.'s earnings for the first nine months of 2000 were $266 million ($1.11 per common share), compared with earnings of $114 million ($0.45 per common share) for the comparable period in 1999. Cash flow from operations during the same period was $742 million ($3.19 per common share), compared with $369 million ($1.56 per common share) in 1999. During both the quarter and year, there were transactions impacting earnings that were not viewed as ongoing operational earnings. See the table below that breaks out the components of net earnings. The above noted transactions included Suncor's partial write-down of its carrying value of the Stuart Oil Shale project in Australia, restructuring costs and divestment gains in its Natural Gas (formerly Exploration and Production) business and Project Millennium start-up expenses. Operational earnings increased to $313 million from $93 million in the same period of 1999. The increase primarily reflects higher commodity prices, record oil sands production, improved downstream refining margins, lower interest expense and higher foreign exchange gains. These factors were partially offset by higher hedging losses, higher operating costs, lower natural gas volumes, expenses associated with the Stuart Oil Shale Project and lower retail gasoline margins. The increase in cash flow from operations was due to the same factors as noted above. - Third quarter earnings were $50 million ($0.19 per common share), compared with $70 million ($0.29 per common share) in the third quarter of 1999. Cash flow from operations was $229 million ($0.98 per common share), compared with $147 million ($0.62 per common share) for the third quarter of 1999. In the quarter, net earnings were also impacted by the partial write-down of the Stuart project, Natural Gas restructuring costs and divestment gains and Project Millennium start-up expenses. Operational earnings in the quarter were $111 million compared to $55 million in the same quarter last year. Factors affecting third quarter operational earnings and cash flow were essentially the same as those affecting the company's nine-month financial performance. - Subsequent to the end of the quarter, Suncor completed a thorough analysis of Project Millennium at its Oil Sands operations and has revised the project's cost estimate to $2.8 billion. The project will more than double production capacity to 225,000 barrels per day from 105,000 barrels per day in 1999. Major commissioning work is still planned for the second half of 2001, with previously announced production and cash operating cost targets on track. (See pages 2 and 3 for further details). EARNINGS COMPONENTS
Nine months ended Third Quarter September 30 ($ millions after income taxes) 2000 1999 2000 1999 ------------------------------------------------------------------- OPERATIONAL EARNINGS 111 55 313 93 NATURAL GAS Asset divestments 35 15 69 21 Restructuring cost (10) -- (30) -- STUART OIL SHALE PROJECT Partial asset write-down (80) -- (80) -- OIL SANDS Start-up expenses - Project Millenium (6) -- (6) -- ------------------------------------------------------------------- Net earnings 50 70 266 114 -------------------------------------------------------------------
CASH FLOW COMPONENTS
Nine months ended Third Quarter September 30 ($ millions) 2000 1999 2000 1999 ------------------------------------------------------------------- OPERATIONAL CASH FLOW 252 147 773 369 NATURAL GAS Restructuing cost (1) -- (9) -- OIL SANDS Start-up expenses & overburden removal - Project Millennium (22) -- (22) -- ------------------------------------------------------------------- Cash flow from operations 229 147 742 369 -------------------------------------------------------------------
Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 2 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 "Our strong operational performance allowed us to take advantage of the current pricing environment for our key commodities.'' R I C H A R D L. G E O R G E, President and Chief Executive Officer
------------------------------------------------------------------ 1999 2000 ------------------------------------------------------------------ Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------------------ EARNINGS BY QUARTER 70 72 105 111 50 ($ millions) ------------------------------------------------------------------
------------------------------------------------------------------ 1999 2000 ------------------------------------------------------------------ Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------------------ CASH FLOW FROM OPERATIONS BY QUARTER 147 222 269 244 229 ($ millions) ------------------------------------------------------------------
- Suncor's hedging program had a loss of $69 million during the third quarter compared with a $24 million loss in the third quarter of 1999, and a $171 million loss on a year-to-date basis compared with a $20 million loss for the same period last year. - Suncor's total crude oil, natural gas and natural gas liquids production during the first nine months averaged 144,100 barrels of oil equivalent (BOE) per day, compared with 139,800 BOE per day during the same period in 1999. Total third quarter production averaged 140,600 barrels of oil equivalent (BOE) per day, compared with 137,100 BOE per day in the third quarter of 1999. - Oil Sands achieved record third quarter production of 114,200 barrels per day compared with 101,500 barrels per day in the third quarter of 1999. The average production target for the year remains at 115,000 barrels per day. - During the quarter, Natural Gas continued to progress its new strategy by completing its restructuring and the divestment of non-core assets. During the quarter, the divestment generated $113 million in proceeds, raising the total proceeds this year to $314 million. - Suncor's Natural Gas business had production during the third quarter of 26,400 BOE per day. Production for the year is targeted to achieve its plan of 27,000 BOE per day. - In the downstream refining and retail marketing business, Sunoco's third quarter earnings rose to $19 million, up from $12 million in the third quarter of 1999. The increase primarily reflects improved refining margins. - During the quarter, Suncor announced plans to resolve operational issues at its Stuart joint venture oil shale demonstration project in Australia that could require expenditures of $13 million and potentially up to $22 million to improve plant performance. The next stage of development will be put on hold until operational issues and concerns about environmental and social impacts are addressed. Suncor also recorded an after tax write-down of $80 million of the project, reflecting increased costs and delayed oil production. - For the second year in a row, Suncor was included in the Dow Jones Sustainability Group Index, a global stock index that tracks the performance of leading sustainability companies. The principles of sustainable development are environmental performance, economic development and social responsibility. - Consolidated revenues for the first nine months were $2.5 billion, compared with $1.7 billion during the same period last year. Consolidated revenues for the third quarter were $862 million compared with $639 million in the third quarter of 1999. SUNCOR OPERATING STRENGTH SHOWS IN THIRD QUARTER "Suncor continues to benefit from high commodity prices and demand for our products," said Rick George, president and chief executive officer. "Our strong operational performance allowed us to take advantage of the current pricing environment for our key commodities. Sunoco's refining margins improved and Oil Sands production during the quarter puts it on target to hit a record annual production rate of 115,000 barrels per day this year. Natural Gas is making significant progress with its repositioning and is on track to achieve its target of 10 per cent return on capital within five years." REVISED COST ESTIMATE FOR PROJECT MILLENNIUM Subsequent to the end of the quarter, a thorough analysis was completed on Suncor's Project Millennium that resulted in a revised cost estimate of $2.8 billion. In the first quarter of this year, Suncor had estimated project costs could be as high as $2.45 billion, up from the original estimate of $2 billion. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 3 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 "Even with the added cost, the economics of Project Millennium remain very attractive and promise significant returns for our shareholders.'' R I C H A R D L. G E O R G E, President and Chief Executive Officer
-------------------------------------------------------------------- 1999 2000 -------------------------------------------------------------------- Q3 Q4 Q1 Q2 Q3 -------------------------------------------------------------------- INDUSTRY INDICATORS Crude Oil - West Texas Intermediate (U.S.$/bbl) 21.70 24.50 28.75 28.65 31.60 Exchange Rate (Cdn$ : U.S.$) .68 .69 .69 .68 .68 --------------------------------------------------------------------
-------------------------------------------------------------------- 1999 2000 -------------------------------------------------------------------- Q3 Q4 Q1 Q2 Q3 -------------------------------------------------------------------- RATIOS (Percentages) Return on average shareholder's equity 8.8 10.3 13.6 16.4 15.4 Exchange Rate (Cdn$ : U.S.$) 8.2 8.3 11.4 15.5 14.8 --------------------------------------------------------------------
The increased costs are largely attributed to the rising costs of labour, fabrication and material and a $150 million change in the project scope. One of the largest capital projects in Canada, Project Millennium will more than double Suncor's oil sands production capacity from an average of 105,000 barrels per day in 1999 to 225,000 barrels per day in 2002. The project is the cornerstone of Suncor's plan to achieve daily production capacity of 400,000 - 450,000 barrels per day at its oil sands operations by 2008. "We always believed Project Millennium would be a major boost for the Alberta economy. During the planning for this project three years ago, no one could have foreseen just how strong the economy would be today and the high demand for skilled labour across the country," says George. The project is approximately 50 per cent complete, engineering is essentially finished, all materials have been purchased and the focus is on construction and completion. "With the finish line in sight, we believe our revised estimate is an accurate reflection of the project's cost." The additional capital costs, which were approved by Suncor's Board of Directors, are expected to be financed through internally generated cash flow and additional borrowing. "Even with the added cost, the economics of Project Millennium remain very attractive and promise significant returns for our shareholders," George says. Project Millennium will increase plant reliability, provide environmental improvements and reduce oil sands cash costs to between $8.50 and $9.50 per barrel. "We are as enthusiastic as ever about what this expansion means to our future," says George. FINANCIAL RESULTS THIRD QUARTER Consolidated earnings for the third quarter were $50 million ($0.19 per common share), down from $70 million ($0.29 per common share) in the third quarter of 1999. Operational earnings in 2000 of $111 million were higher than the $55 million operational earnings in the same period in 1999. The $56 million increase in operational earnings to $111 million was mainly due to higher crude oil and natural gas prices, record oil sands production, improved refining margins and higher foreign exchange gains as the Australian dollar weakened against the Canadian dollar. These increases were partially offset by higher hedging losses, higher operating expenses, lower natural gas volumes, ongoing costs associated with the Stuart Oil Shale Project and lower retail margins. In addition to the above items, net earnings were impacted by Suncor's partial write-down of its carrying value of the Stuart Oil Shale project in Australia, restructuring costs, Natural Gas divestments gains (2000 and 1999) and Project Millennium start-up expenses. The start-up expenses relate to the preparations necessary prior to the actual commencement of operations in 2001. The preparatory work on the project will continue over the balance of 2000 and into 2001 when start-up activities are expected to be completed and operations begin. Cash flow from operations for the quarter was $229 million, ($0.98 per common share), up from $147 million, ($0.62 per common share) in the third quarter of 1999. This improvement was primarily due to the same factors that increased earnings, partially offset by $12 million of overburden removal costs associated with the start-up of the Project Millennium mine in 2001. The overburden removal cash outlays are in addition to the start-up expenses and are always incurred before oil sands mining can be undertaken. Overburden removal costs will begin to be expensed once oil sands Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 4 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 OIL SANDS CASH OPERATING COSTS
Nine months ended Third Quarter September 30 (Dollars per barrel) 2000 1999 2000 1999 ------------------------------------------------------------------- Base Plant 12.40 12.35 11.90 11.90 Start-up expenditures - Project Millennium 2.10 -- 0.65 -- ------------------------------------------------------------------- Total cash operating costs 14.50 12.35 12.55 11.90 -------------------------------------------------------------------
-------------------------------------------------------------------- 1999 2000 -------------------------------------------------------------------- Q3 Q4 Q1 Q2 Q3 -------------------------------------------------------------------- OIL SANDS PRODUCTION BY QUARTER (thousands of barrels per day) 101.5 113.2 114.8 116.7 114.2 --------------------------------------------------------------------
mining commences. Cash flow from the operations, before Project Millennium start-up expenditures and Natural Gas restructuring for the quarter, was $252 million compared with $147 million in the same period in 1999. NINE-MONTH CONSOLIDATED EARNINGS Consolidated earnings for the first nine months of the year were $266 million ($1.11 per common share), compared with $114 million ($0.45 per common share), earned during the comparable period in 1999. Operational earnings in 2000 of $313 million were higher than the $93 million operational earnings in 1999. The $220 million increase in operational earnings to $313 million was due primarily to the same factors that impacted earnings in the quarter. Year-to-date earnings for 2000 were also higher, reflecting a reduction in statutory income tax rates that increased earnings by $7 million. In addition to the above items, net earnings were also impacted by the same factors as noted above under the third quarter discussion. Cash flow from operations for the first nine months was $742 million ($3.19 per common share), compared with $369 million ($1.56 per common share) in the same period of 1999. Cash flow was affected by the same factors that increased earnings as well as the $12 million spending associated with overburden removal prior to the commencement of mining on Project Millennium. Cash flow from the operational activities on a year-to-date basis was $773 million compared with $369 million in the same period in 1999. BUSINESS UNIT PERFORMANCE OIL SANDS ON TRACK TO MEET ANNUAL PRODUCTION TARGET OF 115,000 BARRELS PER DAY Oil Sands' third quarter earnings were $76 million ($82 million operational earnings before Project Millennium start-up expenses) compared with $43 million in the third quarter of 1999. Cash flow from operations was $156 million in the third quarter compared with $104 million in the comparable quarter in 1999. Excluding Project Millennium start-up expenditures, 2000 cash flow from operations was $178 million. The earnings increase reflects higher crude oil prices and record third quarter production, partially offset by higher hedging losses and cash and non-cash expense increases, and Project Millennium start-up expenses. Higher expenses reflect the increased level of production, higher natural gas prices and higher non-cash expenses (depreciation, depletion and amortization). The higher non-cash expenses are due to a higher asset base that increased the production capacity and an increase in the estimated amount and cost of overburden removal. Oil Sands third quarter production was 114,200 barrels per day compared with 101,500 barrels per day during the third quarter of 1999. Oil Sands continues to target annual production in 2000 of 115,000 barrels per day. Cash operating costs for the first nine months were $12.55 per barrel compared with $11.90 in the first nine months of 1999. Excluding the $0.65 per barrel impact of Project Millennium start-up expenditures, the cash operating costs were $11.90 per barrel. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 5 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0
------------------------------------------------------------------- 1999 2000 ------------------------------------------------------------------- Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------------------- NATURAL GAS BOE CONVENTIONAL PRODUCTION BY QUARTER 35.6 33.8 33.8 26.1 26.4 (thousands of barrels of oil equivalent per day) -------------------------------------------------------------------
------------------------------------------------------------------- 1999 2000 ------------------------------------------------------------------- Q3 Q4 Q1 Q2 Q3 ------------------------------------------------------------------- DOWNSTREAM PRODUCT MARGINS BY QUARTER (cents per litre) Retail 6.9 7.2 6.8 6.4 6.4 Refining 4.8 4.3 5.4 6.3 6.1 -------------------------------------------------------------------
NATURAL GAS GENERATES DIVESTMENT PROCEEDS OF $314 MILLION THIS YEAR In the third quarter, Natural Gas earned $43 million ($18 million operational earnings before asset divestments and restructuring charges) compared with $20 million ($5 million before asset divestments) in the same quarter of 1999. Cash flow from operations during the quarter was $64 million compared with $39 million last year. Excluding the impact of divestment and restructuring charges, the increase in earnings was due primarily to higher commodity prices and lower exploration expenses, partially offset by lower production volumes. During the third quarter, Natural Gas completed its current planned divestment program with the sale of non-core assets bringing the total proceeds generated this year to $314 million. This exceeds the company's original target of $250 million by $64 million. During 2000, Natural Gas divested 41 million BOE of total proven reserves. These reserves represent approximately 10,000 BOE per day of production at the time of sale. The annualized production impact for 2000 is 5,500 BOE per day. As expected, the divestment program resulted in a decline in production. Third quarter production volumes averaged 26,400 BOE per day compared with 35,600 BOE per day in the third quarter of 1999. Natural Gas expects to exit the year with a production rate of 22,000 BOE per day. Production for 2000 is expected to average 27,000 BOE per day. The business is on track to achieve its previously announced target of $18 - $20 million in annual expense reductions in 2001. HIGHER REFINING MARGINS IMPROVE SUNOCO THIRD QUARTER PERFORMANCE Sunoco's third quarter earnings rose to $19 million, compared with earnings of $12 million in the third quarter of 1999. Cash flow from operations was $49 million for the quarter compared with $37 million in the third quarter of 1999. Higher refining margins had a positive impact on earnings and cash flow, while lower retail margins partially offset the improved refining margins. Refining operations earned $20 million in the third quarter compared with earnings of $9 million for the same quarter last year. Low North American refined product inventories and concerns of possible heating oil shortages this winter helped push refining margins higher. Sunoco's retail marketing earnings were $1 million, down from earnings of $4 million in the third quarter of last year. The decrease reflects lower margins in the quarter, and higher operating costs, including price-related cost increases. These factors were partially offset by higher ancillary income at the service station level. Sunoco launched its Affinity Card loyalty program that offers residential natural gas customers a two per cent discount on fuel and store purchases (excluding tobacco, fast food and lottery purchases) at Sunoco retail sites. Sunoco's Integrated Energy Solutions (IES) business posted a loss of $2 million for the quarter compared with a loss of $1 million in the third quarter of 1999. The restructuring of pricing arrangements on contracts is expected to generate positive earnings in 2001. During the quarter, Sunoco launched its new e-commerce web site WWW.SUNOCO.CA. The site supports Sunoco's existing business development and community relations strategies by offering WEB GAS, a way to pre-purchase gasoline and other products on the Internet, and free web-site locations to non-profit groups. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 6 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 STUART OIL SHALE WRITE-DOWN During the quarter, Suncor announced plans to resolve operational issues at its Stuart joint-venture oil shale demonstration project in Australia, which could require expenditures of $13 million and potentially up to $22 million to improve plant performance. The next stage of development will be put on hold until operational issues and concerns about environmental and social impacts are addressed. Suncor also recorded an after-tax write-down of $80 million on the project, reflecting increased costs and delayed oil production. Future expenditures at the oil shale plant will be expensed against earnings. SUNCOR ENERGY IS AN INTEGRATED CANADIAN ENERGY COMPANY WITH A LEADING POSITION IN CANADA'S OIL SANDS INDUSTRY. SUNCOR IS ALSO A NATURAL GAS PRODUCER IN WESTERN CANADA; OPERATES A REFINING AND MARKETING BUSINESS IN ONTARIO UNDER THE SUNOCO BRAND; AND IS COMMISSIONING 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). THIS NEWS RELEASE CONTAINS FORWARD-LOOKING INFORMATION. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED AS A RESULT OF A NUMBER OF FACTORS, RISKS AND UNCERTAINTIES, KNOWN AND UNKNOWN. THIS FORWARD-LOOKING INFORMATION REGARDING SUNCOR ENERGY'S FUTURE PLANS, INCLUDING COST ESTIMATES, IS PRELIMINARY AND REMAINS SUBJECT TO CHANGE IN RESPONSE TO FACTORS THAT COULD INCLUDE: STAKEHOLDER CONSULTATION; THE REGULATORY PROCESS; DETAILED ENGINEERING WORK; TECHNICAL ISSUES; ENVIRONMENTAL ISSUES; TECHNOLOGICAL CAPABILITIES; NEW LEGISLATION; COMPETITIVE AND GENERAL ECONOMIC FACTORS AND CONDITIONS; AND THE OCCURRENCE OF UNEXPECTED EVENTS. FURTHER DISCUSSION OF THE RISKS, UNCERTAINTIES AND OTHER FACTORS THAT COULD AFFECT THESE PLANS AND ANY ACTUAL RESULTS ARE DESCRIBED IN SUNCOR ENERGY'S ANNUAL REPORT TO SHAREHOLDERS AND OTHER DOCUMENTS FILED WITH REGULATORY AUTHORITIES. For more information about Suncor, visit our website at WWW.SUNCOR.COM or phone: Media Inquiries: Lisa Falkowsky Manager, External Communications (403) 205-6966 lfalkowsky@suncor.com Investor Relations: John Rogers Director, Investor Relations (403) 269-8670 jrogers@suncor.com Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 7 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 Consolidated Statements of Earnings (unaudited)
Third quarter Nine months ended September 30 ($ millions) 2000 1999 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- REVENUES 862 639 2,461 1,672 ----------------------------------------------------------------------------------------------------------------------------- EXPENSES Purchases of crude oil and products 212 145 575 355 Operating, selling and general 211 208 647 571 Exploration 6 8 41 28 Royalties 48 26 134 62 Taxes other than income taxes 94 84 269 246 Depreciation, depletion and amortization 91 78 271 231 Gain on disposal of assets (74) (25) (149) (34) Write down of oil shale assets (note 2) 125 - 125 - Restructuring (note 3) 22 - 65 - Start-up expenses - Project Millennium (note 4) 10 - 10 - Interest 6 5 6 24 ----------------------------------------------------------------------------------------------------------------------------- 751 529 1994 1 483 ----------------------------------------------------------------------------------------------------------------------------- EARNINGS BEFORE INCOME TAXES 111 110 467 189 ----------------------------------------------------------------------------------------------------------------------------- PROVISION FOR INCOME TAXES Current 19 22 38 33 Future 42 18 163 42 ----------------------------------------------------------------------------------------------------------------------------- 61 40 201 75 ----------------------------------------------------------------------------------------------------------------------------- NET EARNINGS 50 70 266 114 Dividends on preferred securities (6) (7) (19) (15) ----------------------------------------------------------------------------------------------------------------------------- Net earnings attributable to common shareholders 44 63 247 99 ----------------------------------------------------------------------------------------------------------------------------- PER COMMON SHARE (dollars) Net earnings 0.22 0.32 1.20 0.52 Dividends on preferred securities 0.03 0.03 0.09 0.07 ----------------------------------------------------------------------------------------------------------------------------- Net earnings attributable to common shareholders Basic 0.19 0.29 1.11 0.45 Diluted 0.19 0.29 1.11 0.45 ----------------------------------------------------------------------------------------------------------------------------- Dividends 0.085 0.085 0.255 0.255 -----------------------------------------------------------------------------------------------------------------------------
See accompanying notes. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 8 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0
SEPTEMBER 30 December 31 ($ millions) 2000 1999 ----------------------------------------------------------------------------------------------------------------------------- ASSETS CURRENT ASSETS Cash and cash equivalents 126 5 Accounts receivable 389 277 Future income taxes 45 14 Inventories 161 161 ----------------------------------------------------------------------------------------------------------------------------- Total current assets 721 457 ----------------------------------------------------------------------------------------------------------------------------- Capital assets, net 5,427 4,528 Deferred charges and other 161 191 ----------------------------------------------------------------------------------------------------------------------------- Total assets 6,309 5,176 ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Short-term borrowings 25 32 Accounts payable 369 277 Accrued liabilities 264 339 Income taxes 20 15 Taxes other than income taxes 35 46 Current portion of long-term borrowings 1 1 ----------------------------------------------------------------------------------------------------------------------------- Total current liabilities 714 710 ----------------------------------------------------------------------------------------------------------------------------- Long-term borrowings 2,021 1,306 Accrued liabilities and other 257 236 Future income taxes 951 816 Shareholders' equity (see below) 2,366 2,108 ----------------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity 6,309 5,176 ----------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY: Number Number ----------------------------------------------------------------------------------------------------------------------------- Preferred securities 17,540,000 514 17,540,000 514 Share capital 221,701,285 534 221,032,238 524 Retained earnings 1,318 1,070 ----------------------------------------------------------------------------------------------------------------------------- 2,366 2,108 ----------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------
See accompanying notes. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 9 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 Consolidated Statements of Cash Flows (unaudited)
Third quarter Nine months ended September 30 ($ millions) 2000 1999 2000 1999 --------------------------------------------------------------------------------------------------------------------------- OPERATING ACTIVITIES Cash flow provided from operations (1), (2) 229 147 742 369 Decrease (increase) in operating working capital Accounts receivable (30) (10) (112) (73) Inventories -- 10 -- 27 Accounts payable and accrued liabilities 19 77 17 116 Taxes payable 16 18 11 6 --------------------------------------------------------------------------------------------------------------------------- CASH PROVIDED FROM OPERATING ACTIVITIES 234 242 658 445 --------------------------------------------------------------------------------------------------------------------------- CASH USED IN INVESTING ACTIVITIES (2) (390) (299) (1,066) (713) --------------------------------------------------------------------------------------------------------------------------- NET CASH DEFICIENCY BEFORE FINANCING ACTIVITIES (156) (57) (408) (268) --------------------------------------------------------------------------------------------------------------------------- FINANCING ACTIVITIES Increase (decrease) in short-term borrowings 11 (5) (7) (8) Issuance of preferred securities - - - 507 Stuart oil shale project borrowings - - - 9 Repayment of commercial paper borrowings - - - (507) Net increase in other long-term borrowings 291 90 617 334 Issuance of common shares under stock option plan 3 - 8 5 Dividends paid on preferred securities (3) (12) (12) (35) (26) Dividends paid on common shares (17) (19) (54) (56) --------------------------------------------------------------------------------------------------------------------------- CASH PROVIDED FROM FINANCING ACTIVITIES 276 54 529 258 --------------------------------------------------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 120 (3) 121 (10) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 6 19 5 26 --------------------------------------------------------------------------------------------------------------------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 126 16 126 16 --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- PER COMMON SHARE (dollars) (1) Cash flow provided from operations 1.03 0.67 3.35 1.67 (3) Dividends paid on preferred securities (pre-tax) 0.05 0.05 0.16 0.11 --------------------------------------------------------------------------------------------------------------------------- Cash flow provided from operations after deducting dividends paid on preferred securities 0.98 0.62 3.19 1.56 ---------------------------------------------------------------------------------------------------------------------------
(2) See Schedules of Segmented Data. See accompanying notes. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 10 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 Consolidated Statements of Changes in Shareholders' Equity (unaudited)
Preferred Share Retained ($ millions) Securities Capital Earnings --------------------------------------------------------------------------------------------------------------------------- AT DECEMBER 31, 1998 - 518 981 Net earnings - - 114 Dividends paid on preferred securities - - (15) Dividends paid on common shares - - (56) Issuance of preferred securities 514 - - Issued for cash under stock option plan - 5 - --------------------------------------------------------------------------------------------------------------------------- AT SEPTEMBER 30, 1999 514 523 1,024 --------------------------------------------------------------------------------------------------------------------------- --------------------------------------------------------------------------------------------------------------------------- AT DECEMBER 31, 1999 514 524 1,070 Net earnings - - 266 Dividends paid on preferred securities - - (19) Dividends paid on common shares - - (54) Issued under dividend reinvestment plan - 2 (2) Issued for cash under stock option plan - 8 -- Income taxes - impact of new standard (note 5(b)) - - 57 --------------------------------------------------------------------------------------------------------------------------- AT SEPTEMBER 30, 2000 514 534 1,318 --------------------------------------------------------------------------------------------------------------------------- ---------------------------------------------------------------------------------------------------------------------------
See accompanying notes. Common Share Information -------------------------------------------------------------------------------- Share price at end of trading
-------------------------------------------------------------------- 1999 2000 -------------------------------------------------------------------- T3 T4 T1 T2 T3 -------------------------------------------------------------------- Toronto Stock Exchange - $Canadian 28.00 30.20 31.45 34.20 32.35 --------------------------------------------------------------------
-------------------------------------------------------------------- 1999 2000 -------------------------------------------------------------------- T3 T4 T1 T2 T3 -------------------------------------------------------------------- New York Stock Exchange - $U.S. 19.55 20.90 21.25 23.25 22.13 --------------------------------------------------------------------
2000 1999 --------------------------------------------------------------------------------------------------------------------------- nine months ended September 30 Average number outstanding, weighted monthly (thousands) 221,301 220,761 --------------------------------------------------------------------------------------------------------------------------- Book value per common share - $Canadian 8.36 7.00 --------------------------------------------------------------------------------------------------------------------------- - $U.S. 5.57 4.77 --------------------------------------------------------------------------------------------------------------------------- Common share options outstanding 5,999,137 5,868,759 --------------------------------------------------------------------------------------------------------------------------- Ratios (unaudited) --------------------------------------------------------------------------------------------------------------------------- as at September 30 Debt to debt plus shareholders' equity (%) 46.4 35.6 --------------------------------------------------------------------------------------------------------------------------- Net tangible asset coverage on long-term debt (times) Before deduction of future income taxes 2.6 3.3 --------------------------------------------------------------------------------------------------------------------------- After deduction of future income taxes 2.1 2.7 --------------------------------------------------------------------------------------------------------------------------- twelve months ended September 30 Debt to cash flow provided from operations (times) 2.0 2.3 --------------------------------------------------------------------------------------------------------------------------- Interest coverage on long-term debt (times) Net income 6.2 4.0 --------------------------------------------------------------------------------------------------------------------------- Cash flow from operations 10.0 7.3 ---------------------------------------------------------------------------------------------------------------------------
Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 11 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 Notes to the Consolidated Financial Statements (unaudited) 1. ACCOUNTING POLICIES These financial statements follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual financial statements except as described in note 5. 2. WRITE DOWN OF OIL SHALE ASSETS During the third quarter, the company announced plans to resolve operational issues and improve performance at its oil shale project in Australia. These plans could require expenditures in the range of $13 million to $22 million during the next six months. Also included in these plans is a third quarter write down of the carrying value of the oil shale project in the amount of $125 million. The impact of this charge to expense is to decrease net earnings by $80 million. 3. RESTRUCTURING CHARGE During the second quarter, the company announced the approval, by the Board of Directors, of a new strategy designed to deliver profitable and sustainable growth in its Natural Gas business by capitalizing on opportunities to strengthen its competitive position, lower costs and improve its return on capital. As a result of initiating the first phase of the strategy, the carrying value of certain assets was written down to their estimated fair market value and a provision for estimated restructuring costs, including those associated with employee terminations, was recorded. The impact of these charges to expense is to decrease net earnings by $20 million after income tax credits of $23 million. There have been no material adjustments during the third quarter to the above estimates. Any future adjustments would be recorded as they are identified. During the third quarter, completion of the re-positioning of the company's Natural Gas business has resulted in the recording of a further provision for restructuring costs in the amount of $22 million. The impact of these charges is to decrease net earnings by $10 million. 4. START-UP EXPENSES Start-up expenses represent pre-operating costs incurred in the commissioning of the company's Oil Sands Project Millennium. 5. 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 accrued benefit asset or obligation and expense amounts for all of its benefit plans that are 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 nine months ended September 30, 2000 was to increase operating, selling and general expenses by $10 million and decrease net earnings by $6 million (1999 - increase operating, selling and general expenses by $18 million and decrease net earnings by $11 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 based on differences between the book and tax values of assets and liabilities. Future income tax assets and liabilities are measured using the tax rates and tax laws expected to apply when those differences are settled in the future. The effect on future income tax assets and liabilities of a change in tax rates is included in net earnings in the year in which the change to the future tax liability is made. Material changes in tax rates could result in volatility in net earnings in the periods affected. 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 effective income tax rate for the nine months ended September 30, 2000 was 43% reflecting a non-cash credit of $7 million resulting from the revaluation of future income tax balances. This revaluation reflects the substantive enactment of reductions in income tax rates this year. 6. COMPARATIVE FIGURES In addition to the restatement of prior periods' results for comparative purposes identified in note 5, adoption of the new accounting standards has resulted in changes to prior periods' capital employed, return on capital employed, affected ratios and indicators, and certain per common share calculations. The 1999 common share price and number of common shares and common share options outstanding, as well as net earnings, cash dividends, cash flow from operations and book value per common share, have been changed to reflect the two-for-one split of the company's common shares during the second quarter of 2000. 7. SUPPLEMENTAL INFORMATION
($ millions) 2000 1999 --------------------------------------------------------- NINE MONTHS ENDED SEPTEMBER 30 Interest paid 81 54 --------------------------------------------------------- --------------------------------------------------------- Income taxes paid 15 -- --------------------------------------------------------- --------------------------------------------------------- Interest expense Long-term interest cost 78 52 Capitalized interest (72) (28) --------------------------------------------------------- 6 24 --------------------------------------------------------- THIRD QUARTER Interest paid 37 22 --------------------------------------------------------- Income taxes refunded (1) (7) --------------------------------------------------------- Interest expense Long-term interest cost 26 16 Capitalized interest (26) (11) --------------------------------------------------------- - 5 --------------------------------------------------------- ---------------------------------------------------------
Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 12 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 Schedules of Segmented Data (unaudited)
($ millions) 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 --------------------------------------------------------------------------------------------------------------------------------- EARNINGS nine months ended September 30 REVENUES Sales and other operating revenues 422 325 157 101 1,880 1,243 - - 2,459 1,669 Intersegment revenues 590 279 120 117 - - (710) (396) - - Interest - - - - - - 2 3 2 3 --------------------------------------------------------------------------------------------------------------------------------- 1,012 604 277 218 1,880 1,243 (708) (393) 2,461 1,672 EXPENSES Purchases of crude oil and products 2 4 - - 1,278 736 (705) (385) 575 355 Operating, selling and general 336 276 53 65 218 196 40 34 647 571 Exploration - - 41 28 - - - - 41 28 Royalties 73 33 61 29 - - - - 134 62 Taxes other than income taxes 9 7 3 3 257 236 - - 269 246 Depreciation, depletion and amortization 170 124 60 68 41 39 - - 271 231 (Gain) loss on disposal of assets - 2 (148) (36) (1) - - - (149) (34) Write down of oil shale assets - - - - - - 125 - 125 - Restructuring - - 65 - - - - - 65 - Start-up expenses - Project Millennium 10 - - - - - - - 10 - Interest - - - - - - 6 24 6 24 --------------------------------------------------------------------------------------------------------------------------------- 600 446 135 157 1,793 1,207 (534) (327) 1,994 1,483 --------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES 412 158 142 61 87 36 (174) (66) 467 189 Income taxes (165) (64) (75) (25) (29) (16) 68 30 (201) (75) --------------------------------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) 247 94 67 36 58 20 (106) (36) 266 114 --------------------------------------------------------------------------------------------------------------------------------- CAPITAL EMPLOYED as at September 30 1,366 1,277 462 714 445 482 (7) (109) 2,266 2,364 --------------------------------------------------------------------------------------------------------------------------------- twelve months ended September 30 RETURN ON AVERAGE CAPITAL EMPLOYED (%) 24.1 12.9 12.3 6.1 14.1 5.6 - - 14.8 8.2 --------------------------------------------------------------------------------------------------------------------------------- RETURN ON AVERAGE CAPITAL EMPLOYED (%)* 12.1 7.8 12.3 6.1 14.1 5.6 - - 9.0 5.9 --------------------------------------------------------------------------------------------------------------------------------- CASH FLOW BEFORE FINANCING ACTIVITIES nine months ended September 30 CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES: Cash flow provided from (used in) operations Net earnings (loss) 247 94 67 36 58 20 (106) (36) 266 114 Exploration expenses Cash - - 10 10 - - - - 10 10 Dry hole costs - - 31 18 - - - - 31 18 Non-cash items included in earnings Depreciation, depletion and amortization 170 124 60 68 41 39 - - 271 231 Future income taxes 153 60 74 24 4 (17) (68) (25) 163 42 Current income tax provision allocated to Corporate 12 4 1 1 25 33 (38) (38) - - (Gain) loss on disposal of assets - 2 (148) (36) (1) - - - (149) (34) Write down of oil shale assets - - - - - - 125 - 125 - Restructuring - - 56 - - - - - 56 - Other 3 - 2 4 6 1 (8) 4 3 9 Overburden removal outlays (34) (39) - - - - - - (34) (39) Overburden removal outlays - Project Millennium (12) - - - - - - - (12) - Increase (decrease) in deferred credits and other (3) 2 1 (1) - 1 14 16 12 18 --------------------------------------------------------------------------------------------------------------------------------- Total cash flow provided from (used in) operations 536 247 154 124 133 77 (81) (79) 742 369 Decrease (increase) in operating working capital (151) 12 42 9 (17) (11) 42 66 (84) 76 --------------------------------------------------------------------------------------------------------------------------------- Total cash flow provided from (used in) operating activities 385 259 196 133 116 66 (39) (13) 658 445 --------------------------------------------------------------------------------------------------------------------------------- CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES: Capital and exploration expenditures (1,328) (592) (95) (127) (30) (18) (10) (35) (1,463) (772) Deferred maintenance shutdown expenditures (1) (23) - - (9) - - - (10) (23) Deferred outlays and other investments (5) (7) - - (6) (1) 1 (1) (10) (9) Proceeds from disposals 101 1 314 90 2 - - - 417 91 --------------------------------------------------------------------------------------------------------------------------------- Total cash provided from (used in) investing activities (1,233) (621) 219 (37) (43) (19) (9) (36) (1,066) (713) --------------------------------------------------------------------------------------------------------------------------------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES (848) (362) 415 96 73 47 (48) (49) (408) (268) ---------------------------------------------------------------------------------------------------------------------------------
* The company's definition of capital employed excludes capitalized costs related to major projects in progress. If capital employed were to include these capitalized costs, the return on average capital employed would be as stated on this line. Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 13 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 Schedules of Segmented Data (unaudited)
Corporate and Oil Sands Natural Gas Sunoco Eliminations Total ------------- ------------ ------------- ------------- ------------- ($ millions) 2000 1999 2000 1999 2000 1999 2000 1999 2000 1999 --------------------------------------------------------------------------------------------------------------------------------- EARNINGS Third quarter REVENUES Sales and other operating revenues 140 121 62 40 659 477 - - 861 638 Intersegment revenues 196 119 43 39 - - (239) (158) - - Interest - - - - - - 1 1 1 1 --------------------------------------------------------------------------------------------------------------------------------- 336 240 105 79 659 477 (238) (157) 862 639 EXPENSES Purchases of crude oil and products - 1 - - 451 297 (239) (153) 212 145 Operating, selling and general 111 105 16 27 72 64 12 12 211 208 Exploration - - 6 8 - - - - 6 8 Royalties 23 14 25 12 - - - - 48 26 Taxes other than income taxes 4 2 1 1 89 81 - - 94 84 Depreciation, depletion and amortization 57 44 19 21 15 13 - - 91 78 Gain on disposal of assets - - (74) (25) - - - - (74) (25) Write down of oil shale assets - - - - - - 125 - 125 - Restructuring - - 22 - - - - - 22 - Start-up expenses - Project Millennium 10 - - - - - - - 10 - Interest - - - - - - 6 5 6 5 --------------------------------------------------------------------------------------------------------------------------------- 205 166 15 44 627 455 (96) (136) 751 529 --------------------------------------------------------------------------------------------------------------------------------- EARNINGS (LOSS) BEFORE INCOME TAXES 131 74 90 35 32 22 (142) (21) 111 110 Income taxes (55) (31) (47) (15) (13) (10) 54 16 (61) (40) --------------------------------------------------------------------------------------------------------------------------------- NET EARNINGS (LOSS) 76 43 43 20 19 12 (88) (5) 50 70 --------------------------------------------------------------------------------------------------------------------------------- CASH FLOW BEFORE FINANCING ACTIVITIES Third quarter CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES: Cash flow provided from (used in) operations Net earnings (loss) 76 43 43 20 19 12 (88) (5) 50 70 Exploration expenses Cash - - 3 2 - - - - 3 2 Dry hole costs - - 3 6 - - - - 3 6 Non-cash items included in earnings Depreciation, depletion and amortization 57 44 19 21 15 13 - - 91 78 Future income taxes 51 29 47 14 1 (13) (57) (12) 42 18 Current income tax provision allocated to Corporate 4 2 - 1 12 23 (16) (26) - - Gain on disposal of assets - - (74) (25) - - - - (74) (25) Write down of oil shale assets - - - - - - 125 - 125 - Restructuring - - 21 - - - - - 21 - Other - - 1 2 3 - (10) 1 (6) 3 Overburden removal outlays (15) (14) - - - - - - (15) (14) Project Millennium (12) - - - - - - - (12) - Increase (decrease) in deferred credits and other (5) - 1 (2) (1) 2 6 9 1 9 --------------------------------------------------------------------------------------------------------------------------------- Total cash flow provided from (used in) operations 156 104 64 39 49 37 (40) (33) 229 147 Decrease (increase) in operating working capital 14 66 (12) 4 (13) (11) 16 36 5 95 --------------------------------------------------------------------------------------------------------------------------------- Total cash provided from (used in) operating activities 170 170 52 43 36 26 (24) 3 234 242 --------------------------------------------------------------------------------------------------------------------------------- CASH PROVIDED FROM (USED IN) INVESTING ACTIVITIES: Capital and exploration expenditures (475) (284) (22) (34) (13) (10) 3 (13) (507) (341) Deferred maintenance shutdown expenditures - (1) - - (1) - - - (1) (1) Deferred outlays and other investments 4 - - - - - - (1) 4 (1) Proceeds from disposals - - 113 44 1 - - - 114 44 --------------------------------------------------------------------------------------------------------------------------------- Total cash provided from (used in) investing activities (471) (285) 91 10 (13) (10) 3 (14) (390) (299) --------------------------------------------------------------------------------------------------------------------------------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES (301) (115) 143 53 23 16 (21) (11) 156 (57) ---------------------------------------------------------------------------------------------------------------------------------
Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 14 S U N C O R E N E R G Y I N C. - T H I R D Q U A R T E R 2 0 0 0 QUARTERLY OPERATING SUMMARY (unaudited)
For the quarter ended Nine months ended Total year SEPT 30 June 30 Mar 31 Dec 31 Sept 30 SEPT 30 Sept 30 2000 2000 2000 1999 1999 2000 1999 1999 --------------------------------------------------------------------------------------------------------------------------------- OIL SANDS PRODUCTION (a) 114.2 116.7 114.8 113.2 101.5 115.3 103.1 105.6 SALES (a) light sweet crude oil 61.4 64.3 67.7 62.8 52.1 64.4 49.3 52.7 diesel 8.9 8.6 8.7 9.5 8.4 8.7 7.7 8.2 light sour crude oil 42.6 45.2 41.5 35.1 47.5 43.2 43.5 41.3 --------------------------------------------------------------------------------------------------------------------------------- 112.9 118.1 117.9 107.4 108.0 116.3 100.5 102.2 --------------------------------------------------------------------------------------------------------------------------------- AVERAGE SALES PRICE (b) light sweet crude oil 36.21 33.54 34.35 30.81 27.23 34.68 24.02 26.06 other (diesel and light sour crude oil) 27.84 28.22 28.46 25.91 21.45 28.17 20.18 21.48 total 32.39 31.12 31.84 28.77 24.24 31.78 22.07 23.84 total* 43.41 39.40 39.19 33.72 27.56 40.64 23.07 25.89 CASH OPERATING COSTS (1),(c) 14.50 12.20 11.10 11.15 12.35 12.55 11.90 11.70 TOTAL OPERATING COSTS (2),(c) 18.55 16.60 15.50 15.10 15.30 16.85 15.05 15.05 NATURAL GAS GROSS PRODUCTION** Conventional crude oil (a) *** 3.6 3.5 8.1 7.9 8.4 5.1 9.6 9.2 natural gas liquids (a) 2.8 3.1 3.5 4.0 4.1 3.1 4.3 4.2 natural gas (d) 200 195 222 219 231 206 228 226 total (e) 26.4 26.1 33.8 33.8 35.6 28.8 36.7 36.0 AVERAGE SALES PRICE crude oil - conventional (b) 33.09 30.04 26.30 25.21 20.55 28.79 19.76 20.94 crude oil - conventional (b)* 42.31 38.65 38.23 32.72 28.01 39.31 21.61 24.01 natural gas liquids (b) 39.56 32.80 33.16 27.12 22.81 34.94 16.91 19.32 natural gas (f) 4.63 3.70 2.96 2.96 2.48 3.74 2.27 2.44 natural gas (f)* 4.62 3.70 2.97 3.11 2.58 3.74 2.28 2.48 NET WELLS DRILLED Conventional - exploratory **** 1 9 2 10 6 12 9 19 - development 5 6 4 4 1 15 3 7 -------------------------------------------------------------------------------------------------------------------------------- 6 15 6 14 7 27 12 26 -------------------------------------------------------------------------------------------------------------------------------- SUNOCO REFINED PRODUCT SALES (g) Transportation fuels Gasoline - retail ***** 4.2 4.2 4.0 4.3 4.0 4.1 4.1 4.1 - other 4.1 4.2 3.8 3.8 3.8 4.0 3.7 3.7 Jet fuel 1.1 1.0 1.1 0.9 1.2 1.1 1.1 1.1 Other 3.0 3.3 2.8 2.9 2.8 3.1 2.6 2.7 -------------------------------------------------------------------------------------------------------------------------------- 12.4 12.7 11.7 11.9 11.8 12.3 11.5 11.6 Petrochemicals 0.3 0.8 0.6 0.8 0.8 0.6 0.7 0.7 Heating oils 0.2 0.3 0.7 0.5 0.1 0.4 0.4 0.4 Heavy fuel oils 0.5 0.6 0.7 0.5 0.4 0.6 0.5 0.5 Other 0.6 0.7 0.6 0.5 0.8 0.6 0.6 0.6 -------------------------------------------------------------------------------------------------------------------------------- 14.0 15.1 14.3 14.2 13.9 14.5 13.7 13.8 -------------------------------------------------------------------------------------------------------------------------------- NATURAL GAS SALES (d) 74 78 84 90 87 79 89 89 -------------------------------------------------------------------------------------------------------------------------------- MARGINS (h) Refining (3) 6.1 6.3 5.4 4.3 4.8 6.0 3.8 4.0 Retail (4) 6.4 6.4 6.8 7.2 6.9 6.5 7.5 7.4 CRUDE OIL SUPPLY AND REFINING Processed at Suncor refinery (g) 10.7 11.0 11.4 10.2 11.2 11.0 10.8 10.6 Utilization of refining capacity (%) 96 99 102 92 100 99 97 95 --------------------------------------------------------------------------------------------------------------------------------
* Excludes the impact of hedging activities. ** Currently all Natural Gas production is located in the Western Canada Sedimentary Basin. *** Before deducting third quarter 2000 Alberta Crown royalty of 0.5 thousands barrels per day (third quarter 1999 - 0.9 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, start-up expenses 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. 1m3 (cubic metre) = approx. 6.29 barrels Natural gas 1m3 (cubic metre) = approx. 35.49 cubic feet Media and Investor Inquiries: For more information about Suncor Energy, John Rogers (403) 269-8670 visit our website at: www.suncor.com 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. Date: October 27, 2000 By: "MICHAEL W. O'BRIEN" -------------------------------- Michael W. O'Brien Executive Vice President, Corporate Development and Chief Financial Officer