SU Suncor Energy Inc

CALGARY, Alberta—Suncor Energy Inc., Canada's largest crude-oil producer, blamed a second-quarter net loss on lower crude oil prices and production cuts from wildfires in May that forced a shutdown of its oil-sands operations.

Global energy producers have been hit hard by a slide in oil prices below $50 a barrel, and many oil-sands operators in Western Canada suffered an additional blow when out-of-control forest fires forced them to suspend production for several weeks.

The Calgary company reported a net loss of 735 million Canadian dollars ($559.3 million), or 46 Canadian cents a share, for the three months to June 30, compared with a net profit of C$729 million, or 50 Canadian cents a share, in the year-earlier period. That was exacerbated by charges for early repayment of debt and losses on derivatives and U.S. dollar-denominated debt, Suncor said Wednesday.

The massive wildfire in May forced the evacuation of the business hub of Fort McMurray, Alberta, and led to the temporary closure of Suncor's mainstay oil-sands mines and wells located to the north of the town. No facilities were damaged by the blaze, but the company said the disruption forced it to forgo production of some 20 million barrels of oil until full operations resumed in mid-July.

Restart costs of C$50 million were more than offset by cost reductions during the shutdown of C$180 million, it said.

"The forest fires in the Fort McMurray area significantly impacted the region," Steve Williams, Suncor's chief executive, said in a statement. "We shut in our oil-sands production and focused on the safe evacuation of employees, their families and the community."

Suncor said its oil-sands output sank to 177,500 barrels of oil a day in the April to June quarter, well below the 423,800 barrels of oil a day produced a year ago and the 453,000 barrels a day logged in the first quarter.

On an operating, or adjusted, basis that excludes one-time items, Suncor lost C$565 million, or 36 Canadian cents a share for the period, compared with a profit of C$906 million, or 63 Canadian cents a share, in the second quarter of 2015. That was larger than an average forecast of financial analysts for a loss of 25 Canadian cents a share, according to RBC Dominion Securities.

Cash flow from operations in the April to June quarter came to C$916 million, down from C$2.2 billion a year ago.

In addition to the oil-price slump and lost production, Suncor said routine maintenance at a partial refining unit and higher operating expenses from its increased stake in the Syncrude oil-sands consortium contributed to weaker earnings.

The company boosted its ownership in Syncrude to 53.74% in the first quarter after buying a 5% share held by Murphy Oil Corp. and earlier acquiring Canadian Oil Sands Ltd., which owned 36.74% of the oil-sands mining consortium.

Total production at Suncor fell to 330,700 barrels of oil equivalent a day in the second quarter, down from 559,900 barrels of oil equivalent a day in the year earlier period and 691,400 barrels of oil equivalent a day in the first three months of the year.

The company left unchanged its latest full-year production guidance of 585,000 to 620,000 barrels of oil equivalent a day. In June, Suncor lowered its production forecast from a previous estimate of 620,000 to 665,000 barrels of oil equivalent a day.

(END) Dow Jones Newswires

July 27, 2016 23:05 ET (03:05 GMT)

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