Q: How material is today's Suncor news? : "Suncor Energy (TSX: SU) (NYSE: SU) announced today that it has agreed to purchase TotalEnergies EP Canada Ltd., which holds a 31.23% working interest in the Fort Hills oil sands mining project (Fort Hills) for $1.468 billion". Will it have a positive effect on the stock? Thank you
5i Research Answer:
We see it as positive, as SU needs supply. For Suncor, the purchase secures long-term bitumen supplies for the upgraders at its Base Plant, prolonging the operation’s lifespan. The company has been searching for new supplies for the facilities after the Canadian government signaled last year that it might not approve a project to extend the life of the mine that currently feeds them. So, positive for operations, but the total value is still quite small for the size of SU (about 3.5% of market cap).