Suncor Energy Increased Production by $877M and Boosts Toronto Stock Index

As oil prices rise, Suncor Energy Inc. is doubling its dividend and bringing it back to pre-pandemic levels while paying down debt and increasing production.

Suncor Energy Inc.’s stock rose $3.78, or 13.4%, to $32 on Thursday. According to Suncor’s third-quarter results released after the market closed on Wednesday, the company earned $877 million, or 59 cents per common share, compared to a net loss of $12 million, or one cent per share, in the third quarter of 2019.

The Toronto Stock Exchange’s S&P/TSX composite index was up 48.27 points, or 0.23 percent, at 21,003.26, at 9:44 a.m. ET (13:44 GMT), recovering from perhaps the worst session since Sept. 28 after the Bank of Canada indicated this might increase the interest rate sooner than previously thought.

Energy stocks were up 1.6%, with Suncor Energy up 9%, a day after the company doubled its dividend. A recovery in crude prices from pandemic-driven lows helped it post a third-quarter profit, compared to a loss the previous year.

Due to this results and higher-than-expected energy prices, the company says it will raise its dividend to 42 cents per share on December 24.

“We’re just taking advantage of the high commodity price environment. We’ve made so much progress on restructuring the debt and such, our view was we needed to keep the dividends up at the same pace,” said Suncor chief executive Mark Little, on Thursday.

Suncor said its operating earnings increased to $1.04 billion or 71 cents per common share in the third quarter, compared with an operating loss of $338 million or 22 cents per common share in the same period last year. The company reported a $2 billion net debt reduction in the third quarter and a $3.1 billion net dept reduction since the start of 2021, expecting to reduce its net deb. by $5 billion by the en of the year.

“Even with a significant increase to the dividend and continuation of the buyback program, we are planning to accelerate the pace of achieving the net debt targets,” Little said.