Canada's Suncor Energy deepens spending cuts, slashes dividend

FILE PHOTO: Suncor Energy facility is seen in Sherwood Park, Alberta, Canada August 21, 2019. REUTERS/Candace Elliott

(Reuters) - Suncor Energy Inc SU.TO deepened its spending cuts, suspended its share repurchase program and cut its quarterly dividend by 55%, hit by a historic plunge in oil prices caused by a feud between Saudi Arabia and Russia and the COVID-19 pandemic.

Canada’s second-largest oil and gas producer produced a total of 739,800 barrels of oil equivalent per day (boepd) in the first quarter, down from 764,300 boepd a year ago.

North American oil and gas companies have been curbing output and slashing spending targets amid a collapse in crude prices and drop in oil consumption.

Suncor cut its 2020 capital budget to a range of C$3.6 billion to C$4.0 billion, a C$400 million reduction at mid‑point compared to the previous guidance and about 33% compared to the original plan.

The company also suspended share repurchases and reduced its quarterly dividend to C$0.21 per common share from C$0.465 per common share.

The Calgary, Alberta-based company posted a loss of C$3.53 billion ($2.51 billion), or C$2.31 per share, in the first quarter ended March 31, compared with a profit of C$1.47 billion, or C$0.93 per share, a year earlier.

The company recorded an after-tax impairment charge of C$1.798 billion on its share of the Fort Hills assets and against its share of the White Rose and Terra Nova assets.

Excluding one-off items, the company posted a loss of 20 Canadian cents per share, missing analysts’ estimates of a loss of 17 Canadian cents, according to IBES data from Refinitiv.

Reporting by Bharath Manjesh and Shanti S Nair in Bengaluru; Additional reporting by Shradha Singh; Editing by Shailesh Kuber