Fresh from its acquisition of Petro-Canada, Suncor energy is gushing profits from the Canadian Oil Sands. The company’s shares climbed as high as $33.89 in morning trading on the Toronto Stock Exchange after it recorded second quarter net earnings of $480 million or 31 cents per share compared to a net loss of $51 million six cents per share for the second quarter of 2009.
The company credited higher oil prices, offset by a stronger Canadian dollar, for the positive results, and thanks to contributions from Petro-Canada, Suncor said its oil sands production reached a record high of 330,000 barrels per day in April. Total upstream production averaged 633,900 barrels of oil equivalent per day.
“Even with the impacts of maintenance, we had one of our best quarters for oil sands production on record,” Suncor CEO Rick George said in a statement.
Given the high risk premium now associated with deep water drilling following the BP fiasco, investors should begin to gravitate towards the oil sands, which though dirty, have a much clearer and planned impact on the environment than does a sudden burst of an oil well into the ocean. At a little over 30 dollars per share, the opportunity to generate over 633,000 barrels of oil per day, largely from Canadian land reserves, is a beautiful thing.