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Deal gives Suncor 100% ownership of Fort Hills oilsands project
- Transaction includes the remaining 31.23% working interest in Fort Hills and 50% working interest in Surmont
- Adds 135,000 barrels per day of bitumen production capacity and 2.1 billion barrels of reserves
- Ensures sufficient long-term bitumen supply beyond Base Mine end of life to keep Base Plant upgraders full
- Immediately accretive to funds flow per share and the Board intends on increasing dividend by approximately 10% after closing
The company initially planned to spin off the business but said the sale to Suncor would be more straightforward and the price tag was comparable to its own valuations for a listing of the business.
Taking into account the sale, which should close by the end of the third quarter, it plans to distribute at least 40 per cent of the cash flow generated this year to shareholders through a share buyback or special dividend.
TotalEnergies said its first-quarter adjusted net income fell 27 per cent to US$6.5 billion — in line with analyst expectations — due to lower energy prices.
Unlike many peers, TotalEnergies has kept some of its investments in Russia. However, it booked US$14.8 billion worth of impairments on its Russian holdings in 2022.
Biraj Borkhataria, head of European energy research at RBC Europe Ltd, said the surprise sale marked “a clean exit” and the expected cash distribution was “a positive signal.
© Thomson Reuters 2023
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