Suncor Energy Board approves 2009 capital spending plan

Suncor Energy Board approves 2009 capital spending plan

Suncor Energy Inc. announced that its Board of Directors has approved a $6 billion capital spending plan for 2009. Approximately $3.6 billion in spending, or about 60% of the total, is targeted to Suncor’s Voyageur oil sands growth strategy.

“Following a thorough review in light of current financial market conditions, we’ve modified our capital plans for 2009, reducing targeted spending by more than a third” said Rick George, president and chief executive officer. “Our aim is to ensure we are living within our means during a time of market uncertainty, while also making the strategic spending decisions that will allow us to continue on our growth path.”

Suncor’s 2009 plan maintains spending and construction timelines for the third and fourth stages of the company’s Firebag in-situ operations, part of the $20.6 billion Voyageur strategy. Completion of Firebag stages 3 and 4 (in 2009 and 2010, respectively) is expected to provide increases in bitumen production and future cash flow.

In the near-term, Suncor expects to scale down spending and the pace of construction on the company’s planned Voyageur upgrader, delaying targeted completion by approximately one year. Stages five and six of Firebag in-situ operations are expected to proceed but, as they are at relatively early phases of development, spending and scheduling plans are flexible to respond to market conditions.

“We remain committed to an integrated expansion strategy and targeted oil sands production of 550,000 barrels per day,” said George. “However, we’ve always had options available to us in terms of how the expansion is rolled out – and we believe in the current economic environment it’s prudent to exercise that flexibility.”

In addition to Voyageur program investment, Suncor plans 2009 capital spending of $2.4 billion to support its base business. Approximately $1.7 billion is targeted for the company’s oil sands operations, including new extraction facilities and various projects intended to improve the reliability and productivity of oil sands assets. Continuing investments in emission control equipment are also slated for 2009.

In Suncor’s natural gas operations, plans call for spending of approximately $300 million on exploration and production in 2009. In the company’s refining and marketing operations, approximately $400 million in capital is slated for planned maintenance and environmental improvements.

Suncor expects similar levels of company-wide capital spending through 2012. However, some projects, including components of Suncor’s planned in-situ expansion, are subject to regulatory approval and the outcome may impact project details and related budgets.

Suncor’s 2009 capital spending plan is expected to be financed through undrawn credit facilities and cash flow from operations.

Suncor Energy Inc. is an integrated energy company headquartered in Calgary, Alberta. Suncor’s oil sands business, located near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas. Suncor operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand. U.S.A. downstream assets include pipeline and refining operations in Colorado and Wyoming and retail sales in the Denver area under the Phillips 66(R) brand. Suncor’s common shares (symbol: SU) are listed on the Toronto and New York stock exchanges.

Suncor Energy (U.S.A.) Inc. is an authorized licensee of the Phillips 66(R) brand and marks in the state of Colorado. Sunoco in Canada is separate and unrelated to Sunoco in the United States, which is owned by Sunoco, Inc. of Philadelphia.

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