Suncor Energy Inc.
), Canada's biggest energy firm and the largest oil sands outfit,
declared that it has signed a deal with Tamarack Acquisition Corp.,
an affiliate of Tamarack Valley Energy Ltd., to sell its Wilson
Creek assets. The transaction is valued at C$168.5 million.
The Cardium-focused Wilson Creek assets are located near Rimbey, in
Alberta and have a year-to-date net production of about 1,702
barrels of oil equivalent per day (boe/d). The closure of the deal
- expected in the fourth quarter of the year - is subject to
Suncor Energy holds over 80% working interest in the Wilson Creek
assets. The company also has a 52% working interest in the
liquid-rich gas producing Wilson Creek Unit No.1 and related
Management at Suncor stated that the sale is in accordance with its
portfolio restructuring plan. While the company is selling non-core
assets, it also intends to invest in assets that fit in its
long-term growth strategy.
Calgary, Alberta-based Suncor's operations include oil sands
development and upgrading, conventional and offshore crude oil and
gas production, petroleum refining, and product marketing under the
Suncor is anticipated to generate significant cash flows in the
long run after its Golden Eagle and Hebron projects start
operating. Notably, the company's oil sand production has been
increasing at a record rate. The favorable trend is expected to
continue going forward. However, we remain concerned about the
company's high debt level and capital expenditure.
In keeping with these views, Suncor Energy carries a Zacks Rank #3
(Hold), implying that it is expected to perform in line with the
broader U.S. market in the next one to three months.
Meanwhile, one can consider better-ranked players from the broader
energy sector such as
PetroChina Co. Ltd.
Sunoco Logistics Partners L.P.
Patterson-UTI Energy Inc.
). All these stocks sport a Zacks Rank #1 (Strong Buy).
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