Suncor Energy (SU) Sees 2016 Capex of C$6.7-C$7.3B

Suncor Energy (NYSE: SU) released its 2016 corporate guidance today, which includes a flexible capital spending program of between $6.7 billion and $7.3 billion and average production of 525,000 to 565,000 barrels of oil equivalent per day.

The guidance includes projected Suncor oil sands cash operating costs per barrel (excluding Syncrude)(1) of $27.00 to $30.00, continuing a multi-year trend that has seen Suncor reduce its oil sands cash costs by over 25 per cent since 2011.

"Our oil sands production is expected to be slightly reduced in 2016, versus 2015 as a result of significant planned maintenance activities scheduled at various facilities, including our first five year full turnaround at the U2 upgrader and major maintenance at Firebag," said Steve Williams, Suncor president and chief executive officer. "We remain focused on achieving further reliability improvements across our operations. And, we'll continue to build upon the momentum gained in 2015 in reducing cash costs per barrel at our oil sands operations."

Approximately 55 per cent of the 2016 capital spending program has been allocated towards growth projects, the vast majority of which are in the Upstream segment. Approximately 45 per cent of Suncor's 2016 capital spend is expected to be directed towards sustaining capital investments that support safe, reliable and efficient operations.

Suncor's 2016 budget incorporates flexibility to respond quickly to any further deterioration in market conditions. Both capital and operating expenditures can be scaled back to ensure the company continues to live within its means.

"Our guidance reflects our ongoing commitment to capital discipline and operational excellence," said Williams. "Our focus on these areas has ensured we're well-positioned to invest in our base business and growth projects, even in a lower for longer oil price environment."

Suncor's corporate guidance provides management's outlook for 2016 in certain key areas of the company's business. Users of this forward-looking information are cautioned that actual results may vary materially from the targets disclosed. Readers are cautioned against placing undue reliance on this guidance.

Capital Expenditures ($ millions) (2) 2016 Full Year Outlook % Growth November 17, 2015 Capital (3) ---------------------------------------------------------------------------- Upstream(4) 5,850 - 6,300 65% Downstream 800 - 900 5% Corporate 50 - 100 5% Total 6,700 - 7,300 55% (1) Cash operating costs per barrel are a non-GAAP measure. See the Legal Advisory. (2) Capital expenditures exclude capitalized interest of $600 million - $700 million. (3) Balance of capital expenditures represents sustaining capital. For definitions of growth and sustaining capital expenditures, see the Capital Investment Update section of Suncor's Management's Discussion and Analysis dated October 28th, 2015 (the "MD&A") (4) The upstream capital spending estimate includes approximately $100 million of sustaining capital for Suncor's share of Syncrude. ------------------------- 2016 Full Year Outlook November 17, 2015 ---------------------------------------------------------------------------- Suncor Total Production (boe/d) (1) 525,000 - 565,000 Oil Sands (bbls/d) 400,000 - 425,000 Syncrude (bbls/d) (2) 30,000 - 35,000 Exploration and Production (boe/d) 95,000 - 105,000 Suncor Refinery Throughputs (bbls/d) 420,000 - 440,000 Suncor Refinery Utilization (3) 91% - 95% (1) At the time of publication, production in Libya continues to be affected by political unrest and therefore guidance is not being provided. Suncor Total Production excludes Libya production. (2) Reflects Suncor's share of production from Syncrude operations, based on Suncor's view of Syncrude's preliminary 2016 operating plan. Corresponding cash operating costs per barrel are estimated at $38 to $45, which excludes research and development costs. (3) Refinery utilizations are based on the following crude processing capabilities: Montreal - 137,000 bbls/d; Sarnia - 85,000 bbls/d; Edmonton - 142,000 bbls/d; and Commerce City - 98,000 bbls/d.

For more detail on Suncor's outlook and capital spending plan, see suncor.com/guidance.

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