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Even though oil prices haven't been cooperating that much for producers in recent months, Suncor has had a pretty good run as it has been wheeling and dealing to become an even bigger player in the Canadian oil market. While the company's line hasn't been the most impressive thing in recent quarters, Suncor's management has its sights on things that will most likely lead to better days ahead. Here are several quotes from Suncor's most recent conference call that lay out what investors should be focusing on as we get closer to the company's next earnings report.
Keeping an eye on costs
As is the case for so many other oil and gas producers, cutting costs has been the name of the game for Suncor. Over the past couple of years, the company has done a decent job of keeping spending in line, but CEO Steven Williams thinks the company can do even better this year:
Now that we're a little more than halfway through the year, it would be a good time to see if the company is on track to meet these goals.
Suncor has been one of the most aggressive acquirers in the oil and gasindustryas of late. Two of its most important acquisitions have been its increased stake in the Syncrude project. Now that Suncor is themajority owner andprimaryoperator, Williams is intent on increasing the reliability and profitability of the joint venture:
This was a pretty newsworthy acquisition, so investors can likely expect to get someupdateson it this coming quarter.
Getting the next big thing up and running
While the company has been very conscious of spending as of late, Suncor has kept moving full steam ahead with two of its major projects: its Fort Hills, Alberta, joint venture with Total and Teck Resources, and its Hebron, Newfoundland and Labrador, offshore platform. According to Williams, these have so far remained on track:
Chances are there hasn't been any major changes to the timetable for these two projects, but investors should check in anyway with their progress, just in case.
Big production jump
Suncor is a unique investment opportunity right now. As an integrated oil and gas company, it offers the stability that comes with having assets in all parts of the oil and gas value chain. At the same time, though, it has much more production potential compared to the traditional Big Oil companies.
|Company||Estimated Production Growth to 2019|
|Chevron||17% (highest estimate)|
Data source: Company investor presentations.
Williams thinks Wall Street has focused too much on Suncor's integrated business model and not sufficiently on its ability to grow, and that it makes the company a bit undervalued:
Saying that all productionwill come on line and it actually happening are two completely different things. This will be a good long-term target for investors to check up on in the coming quarters.
As much as the CEO wants you to think about the growth potential at Suncor, CFO Alister Cowan is much more focused on keeping the company's financial house in order:
That debt-to-capital ratio is a little higher than that of most of its integrated oil and gas peers, but that can also be expected during a long downturn in oil prices. As the oil market improves and Suncor wraps up some of its projects, it would be worth it to see the company cut its debt load a little to ensure more stability when the next crash comes.
The article 5 Things Suncor's Management Thinks You Should Monitor This Quarter originally appeared on Fool.com.
Tyler Crowe has no position in any stocks mentioned.You can follow him at Fool.comor on Twitter@TylerCroweFool. The Motley Fool recommends Chevron and Total. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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