Suncor hunting for natural gas properties - CEO
September 5, 2007
By Scott Haggett
CALGARY, Alberta, Sept 5 (Reuters) - Suncor Energy Inc (SU.TO: Quote, Profile, Research), Canada's No. 2 oil sands producer, is hunting for new natural gas properties after changes to Canada's income trust rules made acquisitions affordable for the first time in a decade, the company's chief executive said on Wednesday.
Suncor CEO Rick George said at a New York investment conference that the company is returning to the acquisition market after an absence of more than 10 years, seeking to boost gas production as it ramps up output from its oil sands operations.
"We will be looking at acquisitions," George said, "Because of changes in the income trust model in Canada, finally after a decade of being unable to compete for assets ... we can look at purchases of natural gas properties."
Because they weren't subject to corporate taxes, income trusts had been able to outbid more conventional companies for oil and gas assets. However the Canadian government removed that advantage last year and by 2011 existing trusts will be fully taxable.
Suncor has already made one purchase this year, paying C$160 million ($152 million) for natural gas properties in northeastern British Columbia.
The company wants to boost its natural gas production as it ramps up production at its Fort McMurray, Alberta, oil sands operations to 350,000 barrels a day next year from an average output of about 260,000 bpd this year.
Natural gas is used to produce steam that's pumped into the ground to liquefy the oil sands' tarry bitumen in thermal operations and is also a key ingredient in upgrading bitumen into synthetic crude oil.
Suncor expects to produce 200 million to 205 million cubic feet of gas a day this year and expects to boost that by 3 to 5 percent in 2008.
Suncor is the second Canadian producer at the Lehman Brothers-sponsored conference looking to buy natural gas properties. EnCana Corp (ECA.TO: Quote, Profile, Research) CEO Randy Eresman also said on Wednesday his firm was looking to acquire gas assets in Western Canada
Monday, April 20, 2009
Posted by Fillibluster at 8:46 PM