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Suncor beats Q3 results expectations, on track to exceed

2024

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production and refining guidance

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Company share price up 29% year-to-date

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CEO Kruger says culture change, efficiency gains key to

revival

By Nia Williams

Nov 13 (Reuters) - Suncor Energy's ( SU ) much

better-than-expected third-quarter results cement the revival of

Canada's second-largest oil producer, two years after its

previous CEO resigned following a string of worker fatalities

and operational mishaps.

The Calgary-based producer beat analysts' estimates for cash

flow, upstream production and refining throughput and hit its

C$8 billion ($5.72 billion) net debt target ahead of schedule,

triggering a move to return 100% of free cash flow to

shareholders.

Suncor also said it is on track to exceed its 2024

production and refining guidance, helped by record third-quarter

output from its oil sands upgraders in northern Alberta.

The latest results, reported late Tuesday, follow a steady

improvement in operations and safety since former Exxon Mobil

executive Rich Kruger took over as CEO in April 2023 and

underline Suncor's transformation from oil sands sector laggard

to outperformer.

"Today's Suncor is a new Suncor," Kruger told analysts on an

earnings call on Wednesday, attributing the success to

incremental gains in efficiency and a change in company culture.

"A year ago, 15 months ago, it was 'What the hell can you

guys do to get off your knees and back on your feet' and now

folks are asking how high can we take this."

Kruger said Suncor had focused on boosting production,

giving the example of the Firebag thermal oil sands plant, which

on paper has capacity to produce 215,000 barrels per day (bpd),

but in September reached 247,000 bpd.

The company's shares were last up 3.9% at C$55.22 on the

Toronto Stock Exchange and have climbed 29% year-to-date,

outstripping the performance of oil sands peers Canadian Natural

Resources ( CNQ ) and Cenovus Energy ( CVE ).

Suncor's performance has improved markedly since 2022 when

activist U.S. investment firm Elliott Management built a stake

in the firm to demand changes, following years of share price

underperformance and major operational issues at the Fort Hills

mine. Less than three months after Elliott took aim at Suncor,

former CEO Mark Little resigned following the death of a fifth

worker in three years.

The company embarked on an overhaul of operations that

included cutting 1,500 jobs and reducing oil sands mining

operating costs. Last month Elliott said it has nearly doubled

its investment, because it is convinced ongoing improvements

will yield a higher share price.

It typically takes much longer to turn a company around and

Kruger's achievements to date have been amazing, said Laura Lau,

chief investment officer of the Brompton Group, which holds

Suncor shares.

"I think Suncor can keep this up, because momentum breeds

momentum," she said.

Suncor had a great quarter, said Scotiabank analyst Jason

Bouvier, but warned it would be much harder to beat year-on-year

comparisons in 2025 and the company still has to deal with

end-of-life implications at its oldest oil sands assets in the

coming decade.

The company also faces a gloomier outlook for global oil

prices, which have been trending lower this year amid concerns

about demand.

($1 = 1.3985 Canadian dollars)