Suncor Cuts 2009 Spending Plans

[Jack]

Suncor Energy has cut its capital spending target for 2009 by more than one-third to $6 billion in a program that establishes “prudence, growth and flexibility`` as its mantra going forward, says the oilsands producer`s CEO. “This action is very prudent for us, I think it`s in the best interest of our shareholders and it will help us on execution,`` CEO Rick George said Thursday on a conference call with analysts. Sixty per cent of the total - $3.6B - will be spent on development of the Voyageur oilsands development. Suncor`s 2009 plan maintains spending and construction schedules for the third and fourth stages of the Firebag underground operations - which provide feedstock for the $20.6B-Voyageur project - set for 2009 and 2010. Planning for later Firebag expansions will be “flexible to respond to market conditions.`` In the near term, Suncor will slow spending on the planned Voyageur upgrader, delaying targeted completion by a year, but remains committed to an integrated expansion strategy and targeted oilsands production of 550,000 barrels per day. “Given the current situation in the financial markets, what we`re doing is really announcing a change in how we`re going to execute this project, we`re not mothballing it, we`re not stopping it,`` George said. “We believe that this strategy will give us reduced risk on a go-forward basis and increased flexibility.`` In addition to Voyageur investment, Suncor plans 2009 capital spending of $2.4B to support its base business, including $1.7B in the oilsands, $300 million in natural gas operations, and $400M in refining and marketing segments.

(PR Newswire, Canadian Press 081023)

 

[derekcw]

Well we should definitely look behind the curtain on all these doom and gloom media reports. Suncor actually cut their budget about 13% not the 33% since they had only bumped up their capital budget 20% in September. There will still be billions spent in the province in 2009, especially up in McMurray. From the globe and mail article which actually presented the whole story:
"This echoed remarks made by Suncor CEO Rick George that the company has slashed its 2009 capital spending budget by one-third to $6-billion, just a month after raising it by 20 per cent. The Calgary company also said that it expects to maintain "similar levels" of capital spending through 2012 and that it is slowing down construction of its Voyageur upgrader, delaying its targeted completion date by about a year."

http://www.theglobeandmail.com/servlet/sto...BNStory/energy/

Also the article tells us that Fort Hills will probably delay their upgrader, but will try to go ahead with their Mine/Extraction plants in McMurray at a cost of $13-15 Billion.

"UTS, one of three partners in the $23.8-billion Fort Hills oil sands development, said the group may defer any decision to build a planned upgrader because of "costs, current commodity, equity and credit market conditions." Instead, it would proceed only with the mining and extraction portion of the development, whose costs UTS estimated at $13-billion to $15-billion."

Derek Wong
DCW Properties Group Ltd.

 

[GarthChapman]

QUOTE (derekcw @ Oct 24 2008, 04:43 PM) Well we should definitely look behind the curtain on all these doom and gloom media reports. Suncor actually cut their budget about 13% not the 33% since they had only bumped up their capital budget 20% in September. There will still be billions spent in the province in 2009, especially up in McMurray.
Derek Wong
DCW Properties Group Ltd.

Good job of reading beyond the headlines Derek.

 

[Thomas Beyer]

QUOTE (GarthChapman @ Oct 24 2008, 05:54 PM) Good job of reading beyond the headlines Derek.absolutely, but let`s not get too rose-coloured glasses ! The recession in Alberta will be here, too .. but it will be less deep than the rest of the world .. but there will be: layoffs, reduced wages, higher vacancies, a poor retail season, bankrupt retailers, bankrupt builders, bankrupt condo converters, more doom and gloom media reports .. and screaming real estate bargains we haven`t seen in two decades !

Keep your sharp-penciled and prudent buyers hat on .. and keep expenses tight while holding .. and you will be a winner in 2011 when we emerge from it .. and we will have a shortage of homes, condos and apartments again as people stream back to Alberta !

 

[SamEfford]

Fort McMurray has definately turned into a buyer`s market and a Landlord`s paradise due to the recent news headlines. Many potential homeowners are afraid to buy, and are deciding to rent until the economy turns around. I have been making offers well below list and having them accepted with conditions very favorable to myself. The rental market is very strong as well; I posted a vacancy on Tuesday, and signed a lease on Friday - with a rent increase of $750 over the previous lease!

 

[Jack]

QUOTE Well we should definitely look behind the curtain on all these doom and gloom media reports. Suncor actually cut their budget about 13% not the 33% since they had only bumped up their capital budget 20% in September. There will still be billions spent in the province in 2009, especially up in McMurray.

Yes, the article I posted acknowledged that Suncor would still be allocating $1.7B to the oilsands, so it`s not all doom & gloom by any strecth. That said, it`s still a downward revision to their forecast, which is significant. That`s a pretty strong signal as to how they expect the economics of the sector (ergo, the province) to perform over the year.

 

[wealthyboomer]

What will be happening very soon?
1.Oil will be valued at least $20 a barrel less than the break-even point that oil companies need to proceed.
2.The Federal Government will announce a deficit for the next 2 years.
3.No tax relief for at least 5 years.
4.LOC`s withdrawn, called, or interest doubled.
5.World economies look for a NEW stable currency while dumping USD.
6.More banks collapse as a NEW World Bank comes forth to create calm and a new economy.

 

[RedlineBrett]

QUOTE (wealthyboomer @ Oct 25 2008, 05:48 PM) What will be happening very soon?
1.Oil will be valued at least $20 a barrel less than the break-even point that oil companies need to proceed.
2.The Federal Government will announce a deficit for the next 2 years.
3.No tax relief for at least 5 years.
4.LOC`s withdrawn, called, or interest doubled.
5.World economies look for a NEW stable currency while dumping USD.
6.More banks collapse as a NEW World Bank comes forth to create calm and a new economy.
Hey if you`re selling I`m buying!

 

[wealthyboomer]

QUOTE (RedlineBrett @ Oct 26 2008, 12:22 AM) Hey if you`re selling I`m buying!CASH is KING!

The people who survived the Great Depression were the ones who had money to buy when everybody else was selling.

 

[Thomas Beyer]

QUOTE (wealthyboomer @ Oct 25 2008, 05:48 PM) What will be happening very soon?
1.Oil will be valued at least $20 a barrel less than the break-even point that oil companies need to proceed.
2.The Federal Government will announce a deficit for the next 2 years.
3.No tax relief for at least 5 years.
4.LOC`s withdrawn, called, or interest doubled.
5.World economies look for a NEW stable currency while dumping USD.
6.More banks collapse as a NEW World Bank comes forth to create calm and a new economy.
While I agree that some weak borrower`s LOC`s will be cut, that oil may drop a bit further in the short-term, that the USD will weaken again somewhat and that the fed`s will run a small deficit for a year or 2, I do question this doom-and-gloom scenario !

It is based on what assumptions / facts ?

 

[wealthyboomer]

QUOTE (wealthyboomer @ Oct 25 2008, 04:48 PM) What will be happening very soon?6.More banks collapse as a NEW World Bank comes forth to create calm and a new economy.More Banks have collapsed this past week.

The election of Barack Obama combined with the overwhelming fear of major international crises could facilitate a cataclysmic shift toward a New World Order.


A World Central Bank, worldwide regulation and world control of the whole system, of all the commodities and all the natural resources, what else can you call it other than world government? when the meeting starts on November 15th for the new monetary system.

There`s going to be an announcement of a NEW MONETARY ORDER, and they’ll probably make it sound very limited, they’re not going to say this is world government, even though it is if you control the world’s money and you control the military, which they do indirectly.”

 

[MikeMcCrae]

Last Friday after that guy spoke from Strathcona economic development I spoke with him about the cut backs. He agreed that if they cut 50% of the announced projects we still could not do them. There is just not a big enough labor force. All is not absolutly rosey but the fundamentals are still there. Compare our economy with 2004 not the RECORD highs of 06-07. They were a RECORD, not what we would expect (or want) to see every year.

 

[GarthChapman]

QUOTE (wealthyboomer @ Nov 11 2008, 03:03 PM) More Banks have collapsed this past week.The election of Barack Obama combined with the overwhelming fear of major international crises could facilitate a cataclysmic shift toward a New World Order.


A World Central Bank, worldwide regulation and world control of the whole system, of all the commodities and all the natural resources, what else can you call it other than world government? when the meeting starts on November 15th for the new monetary system.

There`s going to be an announcement of a NEW MONETARY ORDER, and they`ll probably make it sound very limited, they`re not going to say this is world government, even though it is if you control the world`s money and you control the military, which they do indirectly."
You`re reading way too much pulp fiction.

In really simple terms what the leaders of the world will do is try to put some controls on the speculators who are pushing the markets up and down in wild swings, and they will try to create new controls to stop bankers from lending to those who should not receive loans.

 

[wealthyboomer]

QUOTE (GarthChapman @ Nov 11 2008, 08:58 PM) You`re reading way too much pulp fiction.

In really simple terms what the leaders of the world will do is try to put some controls on the speculators who are pushing the markets up and down in wild swings, and they will try to create new controls to stop bankers from lending to those who should not receive loans.
ohh...Ok...

 

[wealthyboomer]

QUOTE (GarthChapman @ Nov 11 2008, 09:58 PM) You`re reading way too much pulp fiction.
In really simple terms what the leaders of the world will do is try to put some controls on the speculators who are pushing the markets up and down in wild swings, and they will try to create new controls to stop bankers from lending to those who should not receive loans.
A New World Financial Order
In the midst of the imploding US and European financial systems and the resultant bankruptcies, nationalizations and bailouts the People’s Daily, China’s official newspaper, called for a new global currency to replace the US dollar. Writing in the People’s Daily edition of 17 September 2008 Professor Shi Jianxun of Shanghai’s Tongji University said that "[t]he world urgently needs to create a diversified currency and financial system and fair and just financial order that is not dependent on the United States."
http://tinyurl.com/6dekdh

 

[gwasser]

The Conference Board of Canada predicted next year`s economic growth for Alberta 2.6%. Ontario is quite a bit lower but still positive.

Mr. Boomer, for someone claiming to be wealthy, you`re sounding awfully black. A new world currency wanted by the Chinese? Yeah, right that is why they have pegged their currency to the U.S. dollar (kind of) and that is why they own so many US dollars. When the Euro came out, the Middle East and others claimed that this would be the new world currency. I propose the Singapore Dollar or the Luxembourg Yen... oops.

Seems the market is bottoming or near bottom. Oil prices may fall a bit more, but we`re getting near levels that new projects are delayed. Don`t forget that it is even difficult for the Syncrudes of the world to borrow money these days. And banks seem to demand that distributions are being cut in favor of repaying bank debts at even the most solid companies. Also, despite diminished demand in the U.S. the developing countries are still importing more. Overall, we`re not talking about a reduction in world oil demand but a temporary slow down in demand growth. In the mean time, supply is down; my guess is that oil prices will turn the corner within the next 6 months to a year.

No, the announced demise of the U.S. economy and its dollar is a bit premature. We`re not doing great, but things will, as always, work out. Have cash and nibble here and there at opportunities in real estate or the stock market.

I have nibbled to my hearts content. I`m getting full... i.e. I have bought every share of good companies that I wanted. I have bought all the real estate I need (for the moment) and I still have cash, just in case. In fact, cash is coming in every day, because I buy for positive cash flow, both in real estate and stocks. This lets me sit out the falling valuations (I hope).

 

[wealthyboomer]

QUOTE (GarthChapman @ Nov 11 2008, 08:58 PM) You`re reading way too much pulp fiction.Looks like the Britain Prime Minister must be reading the pulp fiction as well?
British Prime Minister Gordon Brown said Thursday that "a new world order" is emerging following the G20 summit in London on tackling the global financial crisis.