Suncor downgraded to Neutral from Buy at Citigroup Citigroup downgraded Suncor to Neutral saying Canadian integrated oil companies are trading at fair value given its lower long-term crude price assumptions. Citi lowered its price target for shares to C$38 from C$48.
Suncor announces spending reduction including cutting a thousand jobs Suncor Energy announced significant spending reductions to its 2015 budget in response to the current lower crude price environment. The cuts include a $1B decrease in the company's capital spending program, as well as sustainable operating expense reductions of $600M-$800M to be phased in over two years offsetting inflation and growth. Suncor is implementing a number of initiatives to achieve the cost reduction targets. These include deferral of some capital projects that have not yet been sanctioned, such as MacKay River 2 and the White Rose Extension, as well as reductions to discretionary spending. Suncor has also implemented a series of workforce initiatives that will reduce total workforce numbers in 2015 by approximately 1000 people, primarily through its contract workforce, in addition to reducing employee positions. There will also be an overall hiring freeze for roles that are not critical to operations and safety. Major projects in construction such as Fort Hills and Hebron will move forward as planned and take full advantage of the current economic environment. These are long-term growth projects that are expected to provide strong returns when they come online in late 2017. Suncor has issued an update to its 2015 guidance to reflect, among other items, reduced spending and lower pricing and related assumptions. Production guidance for 2015 has not changed.
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