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Suncor to buy additional stake in Fort Hills project from Teck in C$1B deal

Daniel

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Suncor Energy (NYSE:SU) said Wednesday it agreed to acquire an additional 21.3% stake in the Fort Hills oil sands project and associated sales and logistics agreements from Teck Resources (NYSE:TECK) for ~C$1B (US$737M) in cash.

The deal will raise Suncor’s (SU) aggregate share in the project to 75.4%; TotalEnergies (TTE) will own the remaining 24.6% with the end of Teck’s (TECK) participation.

Suncor (SU) said the acquisition will be funded by cash from asset sale processes currently underway.

Suncor (SU) will recognize a non-cash impairment charge on its existing 54.1% interest of ~C$2.6B in Q3; Teck (TECK) expects to record a non-cash impairment charge of ~C$950M in Q3 as a result of the deal.

The acquisition “underscores Suncor’s confidence in the long-term value of the Fort Hills Project,” interim President and CEO Kris Smith said, adding the deal is part of the company’s Base Plant mine replacement strategy.

Suncor Energy (SU) is “disgustingly cheap,” trading at only 6.4x earnings and 6.2x free cash flow, Growth at a Good Price writes in an analysis posted recently on Seeking Alpha.

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Brenmiller Energy GAAP EPS of -$0.46, revenue of $1.52M

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