• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 13 hours GREEN NEW DEAL = BLIZZARD OF LIES
  • 5 days Does Toyota Know Something That We Don’t?
  • 5 days World could get rid of Putin and Russia but nobody is bold enough
  • 23 hours America should go after China but it should be done in a wise way.
  • 7 days China is using Chinese Names of Cities on their Border with Russia.
  • 8 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 8 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 8 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 7 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 8 days Putin and Xi Bet on the Global South
  • 8 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 9 days United States LNG Exports Reach Third Place
  • 9 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Low Crude Prices Force Another Oil Major To Slash Dividends

Suncor Energy is axing its quarterly dividend by 55 percent to reduce its cash breakeven to a WTI Crude price of US$35 a barrel, one of Canada’s biggest oil firms said on Wednesday.

Suncor made the statement when reporting a huge Q1 loss due to impairments stemming from the low oil prices. 

“[A]fter taking significant action in reducing capital and operating costs, the Board believes that reducing the current level of dividends is required to drive down the cash breakeven of the company to a WTI price of US$35 per barrel,” Mark Little, president and chief executive officer at Suncor Energy, said in a statement.   

Suncor Energy’s Board has decided to cut the quarterly cash dividend by 55 percent to US$0.15 (C$0.21) per common share.

As early as in March, Suncor announced cuts to its oil production and spending for this year, as did all Canadian, American, and international oil companies in response to the oil price collapse.

Today, Suncor said that “At a WTI price of US$35 per barrel, all planned operating and administration costs, sustaining capital and dividends can be covered from operating revenue, once demand returns.”

Suncor reported today a net loss of US$2.5 billion (C$3.525 billion) for Q1 2020, compared to net earnings of US$1.05 billion (C$1.470 billion) for the prior-year quarter, due to low oil prices and non?cash after?tax asset impairment charges.  

“The company’s results in the first quarter of 2020 were impacted by the significant weakness and volatility in commodity prices, compared to the prior year quarter, as a result of the COVID?19 pandemic and OPEC+’s initial plan to increase production,” Suncor said in an unsurprising recap of the events in Q1 which was the highlight of every oil firm’s results release this earnings season.   

ADVERTISEMENT

Suncor joins other Canadian and major international companies that touched the dividend to protect their balance sheets in the current weak operating and price environment. Cenovus Energy, for example, announced last week a temporary suspension of the dividend after swinging to a Q1 loss, while Husky Energy slashed dividends by 90 percent as it also posted a loss. Last week, Shell announced its first dividend cut since World War II.  

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment
  • William Cathey on May 07 2020 said:
    As a former industry semi-retired geologist engineer, with worker bee experience with Exxon, Shell, Conoco, Occidental, and DOE, might I humbly suggest that majors might leverage their feedstock, and with their deep pockets (if they haven't already,) buy a drug company.

    This would help end making the oil industry the world's favorite whipping boy, and eliminate some of the inadvertent competition between earth sciences (also engineering) and the life sciences.

    wbcathey@gmail.com

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News