Suncor Energy Inc on Wednesday reported third-quarter profit just shy of estimates as weak business environment and higher operating and transportation expenses dented the second-largest Canadian oil and gas producer’s margins.
The company also narrowed its full-year total production outlook range to 780,000 – 790,000 barrels of oil equivalent per day (boepd) from 780,000 – 820,000 boepd.
The government’s mandatory cuts for oil production that came into effect on January 1 have helped free up some pipeline space for the country’s crude.
The mandatory cuts sharply reduced a price discount on Canadian versus U.S. oil, boosting revenue for many producers but affecting profits for integrated companies such as Suncor, which benefited from low-cost oil to run through its refineries.
In the third quarter ended Sept. 30, it produced 762,300 boepd, up from 743,800 boepd in the year-ago quarter.
Suncor said its production rose due to higher output at Syncrude and the ramp-up of Fort Hills and Hebron oil facilities in 2018.
Net profit fell to C$1.04 billion or 67 Canadian cents per share in the quarter, from C$1.82 billion or C$1.12 per share last year.
Excluding one-off items, the company earned 72 Canadian cents per share, a touch below analysts’ average estimates of 73 Canadian cents, according to IBES data from Refinitiv.