6-K 1 a2046134z6-k.txt 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 2001 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 PRESS RELEASE ISSUED APRIL 18, 2001 RE: SUNCOR ENERGY REPORTS RECORD QUARTERLY EARNINGS AND CASH FLOW
EXHIBIT 1 APRIL 18, 2001 FOR IMMEDIATE RELEASE FIRST QUARTER 2001 SUNCOR ENERGY REPORTS RECORD QUARTERLY EARNINGS AND CASH FLOW COMMODITY PRICES, IMPROVED REFINING MARGINS, CONTRIBUTE TO EARNINGS IMPROVEMENT FIRST QUARTER SUMMARY (ALL FINANCIAL FIGURES ARE IN CANADIAN DOLLARS UNLESS NOTED OTHERWISE.) - First quarter earnings for 2001 rose to a record $125 million, up from $105 million in the first quarter of 2000. - Cash flow from operations was a record $275 million, compared with $269 million during the same period last year. - Total daily production for Suncor averaged 135,100 barrels of oil equivalent(1) (BOE), a decrease over the first quarter daily average in 2000 of 148,600 BOE. - Oil Sands production averaged 113,400 barrels per day in the quarter, compared with 114,800 barrels per day in the first quarter of 2000. Sales in the quarter were 106,500 barrels per day, down from 117,900 barrels per day in the first quarter of 2000. - Due to lower sales volume and higher energy costs, Oil Sands base plant cash operating costs increased to $12.65 per barrel compared with $11.10 per barrel in the first quarter of 2000. - Project Millennium reached the 80 per cent completion mark. Project costs spent to date are $2.65 billion. - Suncor's Natural Gas business produced an average of 21,700 BOE per day compared with 33,800 BOE per day during the first quarter last year. Production during the quarter consisted of 177 million cubic feet per day of natural gas; 2,300 barrels per day of natural gas liquids; and 1,700 barrels per day of crude oil. - Refining margins for Sunoco improved almost 15 per cent, averaging 6.2 cents per litre (cpl) compared with 5.4 cpl in the first quarter of 2000. Retail gasoline margins for Sunoco's branded retail outlets were 6.1 cpl compared to 6.8 cpl in the first quarter of 2000. -------- (1) Converted at a 10:1 basis
------------------------------------------------------------------------------------------------------------- NET EARNINGS COMPONENTS 3 MONTHS ENDED 3 MONTHS ENDED ($ millions after income taxes) MARCH 31, 2001 MARCH 31, 2000 ------------------------------------------------------------------------------------------------------------- Operational earnings 131 105 ------------------------------------------------------------------------------------------------------------- Oil Sands Start-up expenses - Project Millennium (6) --- ------------------------------------------------------------------------------------------------------------- Net Earnings 125 105 -------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------- CASH FLOW FROM OPERATIONS COMPONENTS 3 MONTHS ENDED 3 MONTHS ENDED ($ millions) MARCH 31, 2001 MARCH 31, 2000 ------------------------------------------------------------------------------------------------------------- Operational cash flow 302 269 ------------------------------------------------------------------------------------------------------------- Oil Sands Start-up expenses & overburden Removal - Project Millennium (27) --- ------------------------------------------------------------------------------------------------------------- Cash flow from operations 275 269 -------------------------------------------------------------------------------------------------------------
Earnings for the first quarter of 2001 rose to a quarterly record of $125 million ($0.53 per common share), up from $105 million ($0.45 per common share) in the first quarter of 2000. The improvement was primarily a result of increased commodity prices (including the impact of a weaker Canadian dollar versus the U.S. dollar), higher downstream refining margins and a lower crude oil hedging loss. These favourable factors were partially offset by lower sales volumes, a higher light/heavy crude oil differential, higher interest expenses, start-up costs associated with Project Millennium, and Stuart Oil Shale Project costs. During the first quarter, cash flow from operations was a record $275 million ($1.19 per common share), compared with $269 million ($1.16 per common share) in the first quarter of 2000. Revenue was $1 billion compared with $779 million during the same period in 2000. "Continued strong crude oil prices, higher natural gas prices and improved downstream refining margins gave Suncor a strong start to the year," said Rick George, president and chief executive officer. "To sustain these record returns Suncor will continue to focus on improving operational reliability and reducing operating costs an effort aimed at driving higher returns through production growth, not commodity prices." During the quarter Suncor recorded a $45 million hedging loss from its crude oil hedging program, compared to a loss of $51 million in the first quarter of 2000. Total production of crude oil, natural gas and natural gas liquids averaged 135,100 BOE per day, a decrease from the 2000 first quarter average of 148,600 BOE per day. The decrease reflects lower production from the Natural Gas business primarily due to last year's property divestments. 2 OIL SANDS PRODUCTION STEADY Oil Sands recorded earnings of $69 million in the first quarter, compared with $90 million in the same quarter of 2000. Cash flow from operations declined to $140 million, down from $199 million in the first quarter of 2000. Oil Sands production in the quarter averaged 113,400 barrels per day, compared with 114,800 barrels per day in the first quarter of 2000, mainly due to ore quality variability in February. A maintenance shutdown in early April, which allowed for repairs to the 5C9 fractionating tower, is expected to improve production rates during the remainder of the year. Oil Sands original production target of 130,000 barrels per day for 2001 includes the estimated impact of this maintenance. Sales volumes for the quarter declined to 106,500 barrels per day from 117,900 barrels per day in the first quarter of 2000. The decline occurred as Suncor built back inventory to normal operational levels. Inventory had declined to help meet customer requirements during the 5C9 maintenance shutdown. Cash operating costs increased to $12.65 per barrel compared with $11.10 per barrel in the first quarter of 2000. The increase was due to the lower sales volume and higher energy costs. The first quarter costs for 2001 increase to $15.40 per barrel when Project Millennium start-up costs are included.
------------------------------------------------------------------------------------------------------------- OIL SANDS CASH OPERATING COST 3 MONTHS ENDED 3 MONTHS ENDED (dollars per sales barrel) MARCH 31, 2001 MARCH 31, 2000 ------------------------------------------------------------------------------------------------------------- Base plant 12.65 11.10 ------------------------------------------------------------------------------------------------------------- Start-up expenditures - Project Millennium 2.75 --- ------------------------------------------------------------------------------------------------------------- Total cash operating costs 15.40 11.10 -------------------------------------------------------------------------------------------------------------
Several milestones for advancing Project Millennium were met during the quarter, including successfully testing improved extraction technology that is expected to operate at a lower cost and be easier to maintain than the existing method; and completion of a continuous water recycling system that should contribute to energy efficiency by recycling waste heat and reducing water use. Construction was also completed on TransAlta's co-generation facility, where a portion of the output will help meet Suncor's long-term needs for electricity and steam. "We're making significant progress and expect to complete Project Millennium on schedule," said George. "We are on track to deliver on our commitments for growth and see our average daily oil production capacity increase to 225,000 barrels per day by year-end." By the end of the quarter, Project Millennium had reached the 80 per cent completion mark with engineering, equipment and material purchases all essentially complete. Project expenditures at the end of the first quarter were $2.65 billion. Suncor's current $2.8 billion estimate remains unchanged, however, construction cost pressures continue to challenge the project. Construction productivity in the second quarter will be important. Suncor expects to provide a final cost estimate early in the third quarter when the project is expected to be over 90 per cent complete. 3 NATURAL GAS SETS RECORD FOR EARNINGS AND CASH FLOW Natural Gas earnings increased to $53 million in the first quarter, up from $8 million in first quarter of 2000. Cash flow from operations for the quarter was $127 million compared with $48 million for the first quarter 2000. Production averaged 21,700 BOE per day compared with 33,800 BOE per day during the first quarter last year. Natural gas production in the quarter averaged 177 million cubic feet (mmcf) per day down from 222 mmcf per day in the first quarter of 2000. The decrease primarily reflects property divestments that occurred last year and natural reservoir decline. "One year after unveiling its new strategy, Natural Gas has made progress in building and sustaining a profitable business," said George. SUNOCO EARNINGS DRIVEN BY REFINING MARGINS Sunoco's first quarter earnings were $23 million, compared with $19 million in the first quarter of 2000. Cash flow from operations was $50 million for the quarter compared with $46 million in the same quarter in 2000. In the first quarter, refining margins improved almost 15 per cent, averaging 6.2 cents per litre (cpl) compared with 5.4 cpl in the first quarter of 2000. Strong demand for gasoline and distillates in North America accompanied by low inventories contributed to the improved margins. Sales volumes increased by more than four per cent over the same quarter last year. In January, operational problems associated with the Sarnia Refinery's catalytic cracker increased maintenance costs and resulted in Sunoco making product purchases to ensure customer requirements were met. The cat cracker returned to full production later that same month. Retail gasoline margins for Sunoco's branded retail outlets were 6.1 cpl compared to 6.8 cpl in the first quarter of 2000. The decline is primarily due to competitive market pressures and price related costs for Sunoco's customer loyalty program. A three per cent improvement in retail gasoline sales volumes at Sunoco's branded retail sites partially offset the margin decline. STUART OIL SHALE Subsequent to the end of the quarter, Suncor sold its interest in the Stuart Oil Shale Project to Southern Pacific Petroleum and Central Pacific Minerals (SPP/CPM) and will record a write off in the second quarter of $3 million. "While we think the Project has potential for the future, we had to make a choice among competing growth priorities," said George. "For Suncor, it makes sense to focus our people and resources on growing our core businesses in Canada." PROGRESS ON SUSTAINABLE DEVELOPMENT Suncor's plan to establish an alternative and renewable energy business was advanced during the quarter with the company acquiring a $3 million minority equity interest in Northern Power Systems - a Vermont based firm that specializes in wind and solar energy. The two companies have also signed a non-binding letter of intent to form a joint venture to develop large-scale wind power generation and other renewable energy projects in Canada. Suncor Energy is an integrated Canadian energy company. Its Oil Sands business mines and upgrades oil sand and markets custom-blended refinery feedstock and diesel fuel. Suncor is also a conventional natural gas and oil producer in Western Canada and operates a refining and 4 marketing business in Ontario under the Sunoco brand. At the same time as Suncor meets today's energy needs, the company is also investing in alternative and renewable energy for the future. Suncor Energy common shares (symbol SU) and preferred securities are listed for trading on the Toronto and New York Stock exchanges. This news release contains forward-looking information including forward looking statements that may be identified by words such as "expects", "schedules", "goals", "targets" and similar expressions. Actual future results may differ materially. The risks, uncertainties and other factors that could influence actual results are described in Suncor Energy's annual report to shareholders and other documents filed with regulatory authorities. - 30 - Media & Investor Inquiries: John Rogers (403) 269-8670 For more information about Suncor Energy, visit our website at WWW.SUNCOR.COM. 5 SUNCOR ENERGY INC. CONSOLIDATED STATEMENTS OF EARNINGS (unaudited)
Three Three months months ended March 31 ended March 31 ($ millions) 2001 2000 -------------- --------------- REVENUES (NOTE 2) 1,001 779 -------------- --------------- EXPENSES Purchases of crude oil and products (note 2) 306 155 Operating, selling and general 230 217 Exploration 1 10 Royalties 57 43 Taxes other than income taxes 86 84 Depreciation, depletion and amortization 88 91 Gain on disposal of assets - (1) Start-up expenses - Project Millenium (note 3) 10 - Interest 4 - -------------- --------------- 782 599 -------------- --------------- EARNINGS BEFORE INCOME TAXES 219 180 -------------- --------------- PROVISION FOR INCOME TAXES Current 17 7 Future 77 68 -------------- --------------- 94 75 -------------- --------------- NET EARNINGS 125 105 Dividends on preferred securities (7) (6) -------------- --------------- Net earnings attributable to common shareholders 118 99 -------------- --------------- PER COMMON SHARE (dollars) Net earnings attributable to common shareholders - basic 0.53 0.45 -------------- --------------- - diluted 0.52 0.45 -------------- --------------- Cash dividends 0.085 0.085 -------------- ---------------
(See accompanying notes) 6 SUNCOR ENERGY INC. CONSOLIDATED BALANCE SHEETS (unaudited)
March 31 December 31 ($ millions) 2001 2000 -------------- ------------- ASSETS Current assets Cash and cash equivalents 45 21 Accounts receivable 401 407 Future income taxes 45 45 Inventories 215 192 -------------- ------------- Total current assets 706 665 -------------- ------------- Capital assets, net 6 215 5 883 Deferred charges and other 171 166 Future income taxes 131 119 -------------- ------------- Total assets 7 223 6 833 -------------- ------------- -------------- ------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Short-term borrowings 30 64 Accounts payable 373 424 Accrued liabilities 237 285 Income taxes payable 7 15 Future income taxes 5 9 Taxes other than income taxes 29 39 Current portion of long-term borrowings 1 1 -------------- ------------- Total current liabilities 682 837 -------------- ------------- Long-term borrowings 2 528 2 192 Accrued liabilities and other 261 252 Future income taxes 1 173 1 080 Shareholders' equity (see below) 2 579 2 472 -------------- ------------- Total liabilities and shareholders' equity 7 223 6 833 -------------- ------------- -------------- ------------- Shareholders' equity: Number Number -------------- ---------------- Preferred securities 17 540 000 514 17 540 000 514 Share capital 222 420 334 545 221 900 579 537 Retained earnings 1 520 1 421 -------------- ------------- 2 579 2 472 -------------- ------------- -------------- -------------
7 SUNCOR ENERGY INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Three Three months months ended ended March 31 March 31 ($ millions) 2001 2000 ----------- ----------- OPERATING ACTIVITIES Cash flow provided from operations (1), (2) 275 Decrease (increase) in operating working capital Accounts receivable 6 (65) Inventories (23) (8) Accounts payable and accrued liabilities (99) (36) Taxes payable (16) (16) ----------- ----------- CASH PROVIDED FROM OPERATING ACTIVITIES 143 144 ----------- ----------- CASH USED IN INVESTING ACTIVITIES (2) (398) (460) ----------- ----------- NET CASH DEFICIENCY BEFORE FINANCING ACTIVITIES (255) (316) ----------- ----------- FINANCING ACTIVITIES Decrease in short-term borrowings (34) (17) Net increase in long-term borrowings 336 360 Issuance of common shares under stock option plan 6 1 Dividends paid on preferred securities (3) (12) (11) Dividends paid on common shares (17) (19) ----------- ----------- CASH PROVIDED FROM FINANCING ACTIVITIES 279 314 ----------- ----------- INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 24 (2) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 21 5 ----------- ----------- CASH AND CASH EQUIVALENTS AT END OF PERIOD 45 3 ----------- ----------- ----------- ----------- PER COMMON SHARE (dollars) (1) Cash flow provided from operations 1.24 1.22 (3) Dividends paid on preferred securities (pre-tax) 0.05 0.06 Cash flow provided from operations after deducting ----------- ----------- dividends paid on preferred securities 1.19 1.16 -------------------------------------------------------------------------------------------------------------------- (2) See Schedules of Segmented Data
(See accompanying notes) 8 SUNCOR ENERGY INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (unaudited)
Preferred Share Retained ($ millions) Securities Capital Earnings ----------------- -------------- ---------------- AT DECEMBER 31, 1999 514 524 1 070 Net earnings - - 105 Dividends paid on preferred securities - - (6) Dividends paid on common shares - - (19) Issued for cash under stock option plan - 1 - Income taxes - impact of new standard - - 57 ----------------- -------------- ---------------- AT MARCH 31, 2000 514 525 1 207 ----------------- -------------- ---------------- AT DECEMBER 31, 2000 514 537 1 421 Net earnings - - 125 Dividends paid on preferred securities - - (7) Dividends paid on common shares - - (17) Issued for cash under stock option plan - - Issued under dividend reinvestment plan - 2 (2) ----------------- -------------- ---------------- AT MARCH 31, 2001 514 545 1 520 ----------------- -------------- ----------------
(See accompanying notes) 9 SUNCOR ENERGY INC. SCHEDULES OF SEGMENTED DATA (unaudited)
Oil Sands Natural Gas Sunoco ----------------------------------------------------------------------- ($ millions) 2001 2000 2001 2000 2001 2000 ----------- ---------- ----------- --------- ----------- ---------- EARNINGS Three months ended March 31 REVENUES Sales and other operating revenues 252 151 82 46 666 581 Intersegment revenues 41 191 108 44 - - Interest - - - - - - ----------- ---------- ----------- --------- ----------- ---------- 293 342 190 90 666 581 EXPENSES Purchases of crude oil and products - - - - 449 382 Operating, selling and general 108 109 14 23 84 73 Exploration - - 1 10 - - Royalties 7 25 50 18 - - Taxes other than income taxes 3 3 1 - 82 81 Depreciation, depletion and amortization 57 55 18 23 14 13 Gain on disposal of assets - - - (1) - - Start-up expenses - Project Millennium 10 - - - - - Interest - - - - - - ----------- ---------- ----------- --------- ----------- ---------- 185 192 84 73 629 549 ----------- ---------- ----------- --------- ----------- ---------- EARNINGS (LOSS) BEFORE INCOME TAXES 108 150 106 17 37 32
Corporate and Total Eliminations ------------------------------------------------- ($ millions) 2001 2000 2001 2000 ----------- ---------- ------------ ------------ EARNINGS Three months ended March 31 REVENUES Sales and other operating revenues - - 1 000 778 Intersegment revenues (149) (235) - - Interest 1 1 1 1 ----------- ---------- ------------ ------------ (148) (234) 1 001 779 EXPENSES Purchases of crude oil and products (143) (227) 306 155 Operating, selling and general 24 12 230 217 Exploration - - 1 10 Royalties - - 57 43 Taxes other than income taxes - - 86 84 Depreciation, depletion and amortization (1) - 88 91 Gain on disposal of assets - - - (1) Start-up expenses - Project Millennium - - 10 - Interest 4 - 4 - ----------- ---------- ------------ ------------ (116) (215) 782 599 ----------- ---------- ------------ ------------ EARNINGS (LOSS) BEFORE INCOME TAXES (32) (19) 219 180
10
Income taxes (39) (60) (53) (9) (14) (13) ----------- ---------- ----------- --------- ----------- ---------- NET EARNINGS (LOSS) 69 90 53 8 23 19 ----------- ---------- ----------- --------- ----------- ---------- ----------- ---------- ----------- --------- ----------- ---------- CAPITAL EMPLOYED As at March 31 1 500 1 520 320 709 520 469 ----------- ---------- ----------- --------- ----------- ---------- ----------- ---------- ----------- --------- ----------- ---------- Twelve months ended March 31 RETURN ON AVERAGE CAPITAL EMPLOYED (%) 19.5 16.8 28.0 6.2 17.3 8.1 ----------- ---------- ----------- --------- ----------- ---------- ----------- ---------- ----------- --------- ----------- ---------- RETURN ON AVERAGE CAPITAL EMPLOYED (%) * 8.7 11.6 28.0 6.2 17.3 8.1 ----------- ---------- ----------- --------- ----------- ---------- ----------- ---------- ----------- --------- ----------- ----------
Income taxes 12 7 (94) (75) ----------- ---------- ------------ ------------ NET EARNINGS (LOSS) (20) (12) 125 105 ----------- ---------- ------------ ------------ ----------- ---------- ------------ ------------ CAPITAL EMPLOYED As at March 31 (17) (66) 2 323 2 632 ----------- ---------- ------------ ------------ ----------- ---------- ------------ ------------ Twelve months ended March 31 RETURN ON AVERAGE CAPITAL EMPLOYED (%) - - 16.3 11.0 ----------- ---------- ------------ ------------ ----------- ---------- ------------ ------------ RETURN ON AVERAGE CAPITAL EMPLOYED (%) * - - 8.9 8.3 ----------- ---------- ------------ ------------ ----------- ---------- ------------ ------------
* 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. 11 SUNCOR ENERGY INC. SCHEDULES OF SEGMENTED DATA (cont'd) (unaudited)
Oil Sands Natural Gas Sunoco ----------------------------------------------------------------------- ($ millions) 2001 2000 2001 2000 2001 2000 ----------- ---------- ----------- --------- ----------- ---------- 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) 69 90 53 8 23 19 Exploration expenses Cash - - - 4 - - Dry hole costs - - 1 6 - - Non-cash items included in earnings Depreciation, depletion and amortization 57 55 18 23 14 13 Future income taxes 37 57 53 (4) 1 6 Current income tax provision allocated to Corporate 2 3 - 13 13 7 Gain on disposal of assets - - - (1) - - Other 2 3 1 (1) 1 1 Overburden removal outlays (9) (5) - - - - Overburden removal outlays - Project Millenium (17) (3) - - - -
Corporate and Total Eliminations ------------------------------------------------- ($ millions) 2001 2000 2001 2000 ----------- ---------- ------------ ------------ 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) (20) (12) 125 105 Exploration expenses Cash - - - 4 Dry hole costs - - 1 6 Non-cash items included in earnings Depreciation, depletion and amortization (1) - 88 91 Future income taxes (14) 9 77 68 Current income tax provision allocated to Corporate (15) (23) - - Gain on disposal of assets - - - (1) Other 1 (4) 5 (1) Overburden removal outlays - - (9) (5) Overburden removal outlays - Project Millenium - - (17) (3)
12 Increase (decrease) in deferred credits and other (1) (1) 1 - (2) - --------- ---------- ---------- ---------- ---------- ---------- Total cash flow provided from (used in) operations 140 199 127 48 50 46 Decrease (increase) in operating working capital (111) (93) 49 (20) (28) (25) --------- ---------- ---------- ---------- ---------- ---------- Total cash provided from (used in) operating activities 29 106 176 28 22 21 --------- ---------- ---------- ---------- ---------- ---------- CASH USED IN INVESTING ACTIVITIES: Capital and exploration expenditures (362) (406) (30) (40) (4) (5) Deferred maintenance shutdown expenditures - - - - - - Deferred outlays and other investments - (3) - - (1) (3) Proceeds from disposals - - - 3 - - --------- ---------- ---------- ---------- ---------- ---------- Total cash used in investing activities (362) (409) (30) (37) (5) (8) --------- ---------- ---------- ---------- ---------- ---------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES (333) (303) 146 (9) 17 13 --------- ---------- ---------- ---------- ---------- ---------- --------- ---------- ---------- ---------- ---------- ----------
Increase (decrease) in deferred credits and other 7 6 5 5 ---------- ----------- ------------ ----------- Total cash flow provided from (used in) operations (42) (24) 275 269 Decrease (increase) in operating working capital (42) 13 (132) (125) ---------- ----------- ------------ ----------- Total cash provided from (used in) operating activities (84) (11) 143 144 ---------- ----------- ------------ ----------- CASH USED IN INVESTING ACTIVITIES: Capital and exploration expenditures (2) (6) (398) (457) Deferred maintenance shutdown expenditures - - - - Deferred outlays and other investments 1 - - (6) Proceeds from disposals - - - 3 ---------- ----------- ------------ ----------- Total cash used in investing activities (1) (6) (398) (460) ---------- ----------- ------------ ----------- NET CASH SURPLUS (DEFICIENCY) BEFORE FINANCING ACTIVITIES (85) (17) (255) (316) ---------- ----------- ------------ ----------- ---------- ----------- ------------ -----------
13 SUNCOR INC. QUARTERLY OPERATING SUMMARY (unaudited)
For the quarter ended Total year -------------------------------------------------------------------------------------------- MAR 31 Dec 31 Sept 30 June 30 Mar 31 2001 2000 2000 2000 2000 2000 ------------ ------------ ------------- ------------ ------------ ------------ OIL SANDS PRODUCTION (a) 113.4 110.0 114.2 116.7 114.8 113.9 SALES (a) - light sweet crude oil 53.0 64.0 61.4 64.3 67.7 64.3 - diesel 13.5 11.0 8.9 8.6 8.7 9.3 - light sour crude oil 40.0 38.5 42.6 45.2 41.5 42.0 ------------ ------------ ------------- ------------ ------------ ------------ 106.5 113.5 112.9 118.1 117.9 115.6 ------------ ------------ ------------- ------------ ------------ ------------ AVERAGE SALES PRICE (b) - light sweet crude oil 36.09 37.22 36.21 33.54 34.35 35.31 - other (diesel and light sour crude oil) 25.66 23.71 27.84 28.22 28.46 27.09 - total 30.84 31.33 32.39 31.12 31.84 31.67 - total * 38.17 43.27 43.41 39.40 39.19 41.29 CASH OPERATING COSTS (1), (c) 15.40 16.40 14.50 12.20 11.10 13.55 TOTAL OPERATING COSTS (2), (c) 18.60 19.50 17.40 16.60 15.50 17.25 NATURAL GAS GROSS PRODUCTION ** Conventional - natural gas (d) 177 183 200 195 222 200 - natural gas liquids (a) 2.3 2.5 2.8 3.1 3.5 3.0 - crude oil (a) *** 1.7 1.6 3.6 3.5 8.1 4.2 - total (e) 21.7 22.4 26.4 26.1 33.8 27.2 AVERAGE SALES PRICE - natural gas (f) 10.73 8.02 4.63 3.70 2.96 4.72
14 - natural gas (f) * 10.81 8.05 4.62 3.70 2.97 4.73 - natural gas liquids (b) 45.07 43.00 39.56 32.80 33.16 36.66 - crude oil - conventional(b) 37.35 36.01 33.09 30.04 26.30 29.50 - crude oil - conventional(b) * 42.12 44.35 42.31 38.65 38.23 39.80 NET WELLS DRILLED Conventional - exploratory **** 2 4 1 9 2 16 - development 2 4 5 6 4 19 ------------ ------------ ------------- ------------ ------------ ------------ 4 8 6 15 6 35 ------------ ------------ ------------- ------------ ------------ ------------
15 SUNCOR INC. QUARTERLY OPERATING SUMMARY (unaudited)
For the quarter ended Total year ------------------------------------------------------------------------------------------- MAR 31 Dec 31 Sept 30 June 30 Mar 31 2001 2000 2000 2000 2000 2000 ----------- ----------- ----------- ----------- ----------- ----------- SUNOCO REFINED PRODUCT SALES (g) Transportation fuels Gasoline - retail ***** 4.1 4.4 4.2 4.2 4.0 4.2 - other 4.0 4.1 4.1 4.2 3.8 4.0 Jet fuel 1.1 1.0 1.1 1.0 1.1 1.1 Diesel 3.1 3.3 3.0 3.3 2.8 3.1 ----------- ----------- ----------- ----------- ----------- ----------- 12.3 12.8 12.4 12.7 11.7 12.4 Petrochemicals 0.5 0.6 0.3 0.8 0.6 0.6 Heating oils 0.8 0.6 0.2 0.3 0.7 0.4 Heavy fuel oils 0.9 0.7 0.5 0.6 0.7 0.6 Other 0.4 0.5 0.6 0.7 0.6 0.6 ----------- ----------- ----------- ----------- ----------- ----------- 14.9 15.2 14.0 15.1 14.3 14.6 ----------- ----------- ----------- ----------- ----------- ----------- NATURAL GAS SALES (d) 92 95 74 78 84 83 ----------- ----------- ----------- ----------- ----------- ----------- MARGINS (h) Refining (3) 6.2 5.8 6.1 6.3 5.4 5.9 Retail (4) 6.1 7.0 6.4 6.4 6.8 6.6 CRUDE OIL SUPPLY AND REFINING Processed at Suncor refinery (g) 9.8 10.5 10.7 11.0 11.4 10.9 Utilization of refining capacity (%) 88 95 96 99 102 98
* Excludes the impact of hedging activities. ** Currently all Natural Gas production is located in the Western Canada Sedimentary Basin. 16 *** Before deducting first quarter 2001 Alberta Crown royalty of 0.2 thousands barrels per day (first quarter 2000 - 1.0 thousand barrels per day). **** Excludes exploratory wells in progress. ***** Excludes sales through joint venture interests. (a) thousands of barrels per day (d) millions of cubic feet per day (g) thousands of cubic metres per day (b) dollars per barrel (e) BOE per day (h) cents per litre (c) dollars per barrel rounded to the nearest $0.05 (f) dollars per thousand cubic feet
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. 1m3 (cubic metre) = approx. 6.29 barrels Natural gas 1m3 (cubic metre) = approx. 35.49 cubic feet 17
2001 2000 --------------- ------------ COMMON SHARE INFORMATION for the quarter ended March 31 Average number outstanding, weighted monthly (thousands) 222 115 221 064 --------------- ------------ --------------- ------------ as at March 31 Share price at end of trading Toronto Stock Exchange - $Canadian 40.55 31.45 --------------- ------------ --------------- ------------ New York Stock Exchange - $U.S. 25.90 21.25 --------------- ------------ --------------- ------------ Book value per common share - $Canadian 9.29 7.84 --------------- ------------ --------------- ------------ - $U.S. 5.89 5.39 --------------- ------------ --------------- ------------ Common share options outstanding 6 399 816 6 619 708 --------------- ------------ --------------- ------------ RATIOS (unaudited) as at March 31 Debt to debt plus shareholders' equity (%) 49.8 42.7 --------------- ------------ --------------- ------------ 18 Net tangible asset coverage on long-term debt (times) Before deduction of future income taxes 2.4 2.7 --------------- ------------ --------------- ------------ After deduction of future income taxes 2.0 2.2 --------------- ------------ --------------- ------------ for the twelve months ended March 31 Debt to cash flow provided from operations (times) 2.6 1.8 --------------- ------------ --------------- ------------ Interest coverage on long-term debt (times) Net income 5.4 6.7 --------------- ------------ --------------- ------------ Cash flow from operations 7.9 10.7 --------------- ------------ --------------- ------------
19 SUNCOR ENERGY INC. 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, with the exception to the elimination of intercompany sales as discussed in note 2. 2. ELIMINATION OF INTERCOMPANY SALES During the first quarter of 2001, the company changed the methodology of accounting for sales from its upstream operations (Oil Sands and Natural Gas) to its downstream operations (Sunoco) from a deeming concept to the actual tracking of product shipped. This change was made to better reflect the current operational activities within the company. This prospective change will equally increase sales and other operating revenues and purchases of crude oil and products by $96 million and will have no impact on consolidated and segmented net earnings in the accompanying financial statements. 3. START-UP EXPENSES Start-up expenses represent pre-operating costs incurred in the commissioning of the company's Oil Sands Project Millenium. 4. SUPPLEMENTAL INFORMATION
------------------------------------------------------------------------ Three months ended March 31 ------------------------------------------------------------------------ ($ millions) 2001 2000 ------------------------------------------------------------------------ Interest paid 43 28 ------------------------------------------------------------------------ Income taxes paid 20 16 ------------------------------------------------------------------------ Interest expense ------------------------------------------------------------------------ Long term interest cost 35 22 ------------------------------------------------------------------------ Capitalized interest (31) (22) ------------------------------------------------------------------------ 4 - ------------------------------------------------------------------------
HEDGE POSITION UPDATE
-------------------------------------------------------------------------------------------- QUANTITY $US (WTI) $CDN -------------------------------------------------------------------------------------------- 2001 -------------------------------------------------------------------------------------------- Crude Oil 42,710 bbl/day @ $18.75 $26.39 -------------------------------------------------------------------------------------------- 4,790 bbl/day @ $18.75 $29.58 * -------------------------------------------------------------------------------------------- $26.00 - $31.88 $41.01 - $50.29 * 10,000 bbl/day @ (costless collar) -------------------------------------------------------------------------------------------- 2002 -------------------------------------------------------------------------------------------- Crude Oil 41,000 bbl/day @ $20.06 $28.45 -------------------------------------------------------------------------------------------- $22.00 - $26.28 $34.70 - $41.45 * 12,000 bbl/day @ (costless collar) -------------------------------------------------------------------------------------------- $21.00 - $26.19 $33.13 - $41.31 * 10,000 bbl/day @ (costless collar) --------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------- QUANTITY AVERAGE MARGIN HEDGED -------------------------------------------------------------------------------------------- $US/BBL $CDN/BBL -------------------------------------------------------------------------------------------- 2001 - Q2 -------------------------------------------------------------------------------------------- Refined Products - Distillate/Gasoline 1.5 million bbls @ $4.51 $7.11 * -------------------------------------------------------------------------------------------- * For presentation purposes, these $US hedges have been converted to a $CDN equivalent based on the month end $US/$CDN exchange rate of 1.5774. --------------------------------------------------------------------------------------------
5. SUBSEQUENT EVENT - OIL SHALE PROJECT Effective April 5, 2001, the company sold its interest in the Stuart Oil Shale Project to its partners in the joint venture Southern Pacific Petroleum and Central Pacific Minerals (SPP/CPM). In consideration, the company will retain a 5% royalty interest in Stage 1 of the project and each party will retain its world wide rights to the technology. The company will make total payments as part of the transaction in the amount of AUD$7 million, which SPP/CPM will use to fund Stage 1 operating, capital and transition costs. The company will receive 2.5 million SPP shares and 0.926 million CPM shares in consideration. SPP/CPM will issue the company 12.5 million SPP share options and 4.6 million CPM share options, exercisable over five years at a strike price of AUD$1.25 per SPP share and AUD$3.38 per CPM share. During the second quarter of 2001, the company will write off the carrying value of the capital assets, surrender its partly paid Restricted Class shares and extinguish the long term borrowings and accrued interest. The resulting after tax charge of the divestment will be $3 million. 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: April 18, 2001 By: "TERRENCE J. HOPWOOD" ------------------------------- TERRENCE J. HOPWOOD Vice President, General Counsel and Secretary