DBRS Comments on Suncor’s Sale of Western Canadian Conventional Natural Gas Assets

DBRS notes today that Suncor Energy Inc. (Suncor or the Company, rated A (low)) has announced the sale of the conventional portion of its natural gas business in Western Canada for $1 billion to a newly established partnership between Centrica plc and Qatar Petroleum International. Estimated production from the assets sold is approximately 42,000 boe/d, which is 90% natural gas weighted. DBRS notes that the sale does not include the majority of the Company’s unconventional natural gas properties, including the Montney in British Columbia and Wilson Creek in Alberta.

DBRS estimates the sale will result in Suncor’s production becoming weighted approximately 92% towards liquids (based on 2012 production levels).

The sale is subject to regulatory approval, including under the Investment Canada Act and Competition Act, and is expected to close during the third quarter 2013.

DBRS anticipates that proceeds from the sale will be used to further strengthen Suncor’s financial position or to fund its growth initiatives.

Notes:
All figures are in Canadian dollars unless otherwise noted.

The applicable methodology is Rating Oil and Gas Companies, which can be found on the DBRS website under Methodologies.