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Apr 27, 2017

Suncor posts better-than-expected Q1 profit

A Suncor refinery is seen in Sherwood Park, near Edmonton, Alberta, Canada November 13, 2016.

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CALGARY, Alberta - Suncor Energy (SU.TO), Canada's largest oil and gas company, reported a better-than-expected first-quarter profit on Wednesday as a result of higher crude prices, foreign exchange gains and the sale of assets.

The company reported net earnings of $1.352 billion or 81 Canadian cents per share. In the year-prior quarter, Suncor recorded a net profit of $257 million, or 17 cents a share.

Suncor said earnings were boosted by an unrealized after-tax foreign exchange gain of $103 million on the revaluation of U.S. dollar denominated debt and after-tax gains of $437 million on the sale of its lubricants business and interest in the Cedar Point wind facility in Ontario.

Suncor's first-quarter operating profit, which excludes one-time items, was $812 million, or 49 Canadian cents per share, versus a loss of $500 million, or 33 cents per share, in the year-ago period.

The company said the swing to profit was helped by higher crude prices and a drop in operating costs.

Analysts had predicted earnings of 31 Canadian cents per share, according to Thomson Reuters data.

Calgary-based Suncor is the biggest producer in Canada's oil sands and last year became the majority owner of the Syncrude project, which was forced to cut production last month because of a fire that damaged the plant. The company also has operations in the offshore Atlantic Canada region and the North Sea.

Total oil sands operating costs dropped to $22.55 in the first quarter from $24.25 a year earlier, but the Syncrude fire pushed operating costs at the 350,000 barrel-per-day facility in northern Alberta, one of Canada's largest single sources of crude, to US$45.15 a barrel from US$31.35 in the same quarter of 2016.

The company brought forward planned maintenance at Syncrude as a result of the fire and said it expects to be back to full production by the end of June.

"We were able to partially mitigate the impact of the Syncrude incident by making use of Suncor's operational flexibility and that's an indication of the future benefits of integration," said Chief Executive Steve Williams.

Suncor's total production was 725,100 barrels of oil equivalent per day in the first quarter, up from 691,400 boepd in the same period of 2016.

Refinery throughput was 429,900 barrels per day in the first quarter of 2017, up from 420,900 bpd in the same period a year earlier.