CALGARY — Suncor Energy Inc. is doubling its dividend and restoring it to pre-pandemic levels as it continues to pay down debt and ramp up production in the wake of higher oil prices.
Shares in the Calgary-based oil producer and refiner closed up $3.78 or 13.4 per cent to $32 on Thursday. Suncor reported after markets closed on Wednesday that it earned a net profit of $877 million in its third quarter, or 59 cents per common share, compared with a net loss of $12 million or one cent per share in the third quarter of 2020.
The company says it will increase its dividend to 42 cents per share on Dec. 24, thanks to strong performance and higher-than-expected energy prices.
“We’re just taking advantage of the high commodity price environment. We’ve made so much progress on restructuring the debt and such, our view was we needed to keep the dividends up at the same pace,” said Suncor chief executive Mark Little, on a conference call with analysts.
Suncor said its operating earnings increased to $1.04 billion or 71 cents per common share in the third quarter, compared with an operating loss of $338 million or 22 cents per common share in the same period last year.
Suncor’s total upstream production for the quarter ended Sept. 30 was 698,600 barrels of oil equivalent per day, compared with 616,200 in the same quarter a year ago.
Suncor’s refinery business reported $947 million in funds from operations in the third quarter, compared with $594 million in the same quarter the year before.
The company said it reduced its net debt by $2 billion in the third quarter and has reduced its net debt by a total of $3.1 billion since the beginning of 2021. Little said Suncor expects to reduce net debt by a total of $5 billion by the end of the year.
Suncor’s board has also increased its current share buyback program to seven per cent of outstanding shares to be purchased by Feb. 7. Little said the company anticipates continuing the buyback program at the prior rate of about five per cent of outstanding shares after that date.