Suncor Energy Posts Loss

Falling oil prices take a toll, and the Canadian company scales back its tar-sands projects.
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Suncor Energy

(SU) - Get Report

reported a fourth-quarter loss Tuesday of C$215 million (US$172.7 million), or 24 cents per share in the fourth quarter compared with earnings of $1.04 billion, or $1.13 a share, due to rising costs, falling commodity prices and lower production through-put.

The Calgary-based energy company said in a press release that its tar-sands operations were hardest hit. SunCor said that it will slash its 2009 capex budget to C$3 billion from C$6 billion.

SunCor's cash from operations in the fourth quarter fell to C$551 million from C$1.2 billion in the same period last year. Its combined oil sands and natural gas production in the fourth quarter fell to 279,400 barrels per day equivalent from 290,700 barrels per day equivalent a year ago. Operating costs from oil sand production were C$41.30 last quarter compared to C$27.90 per barrel in the fourth quarter of 2007.

SunCor is the world's second largest producer of oil from oil sands. Energy companies made huge investments in the space when oil surged above $70 a barrel in 2007. However, the economic viability of oil sand operations has come under threat as oil prices fell last fall, and many proposed investments in oil sands have recently been delayed or canceled.