Shares of Suncor Energy Inc are up Thursday morning after the company agreed to buy the Canadian operations of France-based Total Energies in a deal worth as much as $6.1 billion.
Calgary-based Suncor will pay $5.5 billion in cash, along with another $600 million that is conditional on Western Canadian Select benchmark oil pricing and certain production targets, the company said.
Suncor expects the deal to add 135,000 barrels per day of net bitumen production capacity and 2.1 billion barrels of proven and probable reserves to Suncor's oilsands portfolio.
Shares of Suncor added 2.7% to $30.08 in New York trading.
“This transaction represents a major step in securing long-term bitumen supply to our base plant upgraders at a competitive supply cost,” Suncor CEO Rich Kruger said. “These are valuable oilsands assets that are a strategic fit for us and add long-term shareholder value."
TotalEnergies EP Canada Ltd holds a 31.23% interest in the Fort Hills oilsands project and a 50% working interest in the Surmont in situ asset. This deal means that Suncor will own the entire Fort Hills project.
Surmont is operated by ConocoPhillips (NYSE:COP) Canada, which holds the other 50% stake.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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