• 4 minutes 2nd Annual Great Oil Price Prediction Challenge of 2019
  • 7 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 10 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 13 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 hours The 5 Scary New Rules Of Upside-Down Capitalism
  • 2 hours U.S. Shale To Break Records Despite Bearish Rhetoric
  • 1 hour Winter Storms Hitting Continental US
  • 7 hours Hydrogen Hurdles in Japan
  • 21 hours More dumbed down? re Hong Kong Act of Congress
  • 14 hours Conoco next gen test wells Vintage 5 (V5) 20% recovery and say " We can do even better "
  • 13 hours PennEast Appealing Wacky 3rd Circuit Decision to Supreme Court
  • 1 day U.S. Shale Output may Start Dropping Next Year
  • 11 hours Aramco IPO magic trick
  • 23 hours Petroleum Industry Domain Names
  • 16 hours Impeachment S**te
  • 14 hours Contaminated Oil
  • 14 hours NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 1 day Crazy Stories From Round The World
  • 14 hours Wonders of US Shale: US Shale Benefits: The U.S. leads global petroleum and natural gas production with record growth in 2018
Robert M Cutler

Robert M Cutler

More Info

Premium Content

Does Suncor Energy Offer a Good Investment?

The Canadian energy company Suncor Energy has been struggling since hitting a high of 74 five years ago. It is now trading in the high 20s (in U.S. dollars: symbol SU on the New York Stock Exchange; dividend yield 1.9%) after falling from its most recent high of 34.50 two months ago.  It is set to release its first-quarter financial results early this coming Monday morning, after its fourth-quarter results last year were judged to be disappointing when it posted decreased revenue compared to the fourth quarter of 2011.  An integrated energy company, Suncor markets products under the Petro-Canada brand. Together with its subsidiaries it develops and upgrades oil sands as well as conventional and offshore oil and gas, and also runs petroleum refining operations.

Company shares suffered after a fourth-quarter loss was posted in February and a $1.5-billion investment in an oil sands project upgrade was written off. They recovered a bit following last week's announcement of a sale of its conventional natural gas and crude oil business in Western Canada (estimated production 42,0000 barrels of oil per day equivalent, of which 90% gas) for $1 billion to a partnership comprising the U.K. company Centrica and Qatar Petroleum International, subject to Canadian government regulatory approval.

Related article: Never Mind Oil, Libya could Supply Europe with Solar Power

This move helps to streamline the company's profile and makes strategic sense although some critics question the timing and price of the sale. Continuing assets still include important conventional reserves and production in the offshore from Eastern Canada as well as in the North Sea. These assets should generate good cash flow for expanding oil sands operations in the future. Despite a generally good financial situation, including respectable debt and valuation levels, the company's earnings per share have been weak as net income and return on equity have disappointed investors. At present, analysts expect Suncor Energy to track the broader U.S. market over the next quarter, but Bloomberg data reveals overwhelming buy sentiment among specialists with targets ranging from 36 to 48 per share.

Over the longer term, the chart suggests a failure to break out to the upside from convergent triangle dating from the May 2008 high and the following November 2008 low. However, it has been holding above a long-term support just under 28, thus forming a descending triangle. (Next-lower supports kick in just above 27 and just above 24, of which the former was confirmed earlier this month.)  Medium-term technical indicators suggest that shares may be due to confirm this reversal to the upside, giving it the momentum to challenge the short-term descending-tops trend line where it finds itself today and even the static short-term upside resistance at 31. Above 29.50 it will have penetrated a medium-term descending-tops downtrend. There is static medium-term resistance around 34 that coincides with another long-term descending-tops downtrend. This probably accounts for the $36 analyst estimate. If the shares make it through that barrier, then $48 is feasible, of course depending on the market level of energy prices themselves.

By. Robert M. Cutler




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play