Canada’s Suncor says company is improving operations, talks with activist firm ahead -Breaking
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Nia Williams
(Reuters) – Canadian oil and gas producer Suncor Energy (NYSE:), which is under pressure from an activist investor firm, on Tuesday said it is making progress on safety and operational improvements after posting stronger-than-expected first quarter results.
Elliott Management made public a call for new board members, management changes, and strategic reviews at Suncor. The company argued its shares are behind other peers, even though crude prices rose to multi-year highs.
Suncor’s chief executive Mark Little stated that the company was looking forward to constructive talks with Elliott during Tuesday’s conference call. Later in the day, the company will host its annual general assembly.
The company’s new oil sands executives were cited by him as an indication of tangible action to fix repeated operational errors that led to four Suncor site deaths since 2020. This raised doubts about Little’s future as chief executive.
Little also highlighted the importance of Suncor’s retail fuel business. Elliott has asked the company to consider selling it to increase shareholder returns. Suncor, an integrated oil company means it can produce upstream and downstream as well as marketing and refining operations.
Little stated that “we believe it’s crucial to maximising the value across all of our integrated business chains.” We believe we have North America’s best downstream business and it is important it stays together.
Suncor, which reported Monday night a net income C$2.95 Billion ($2.27 Billion), raised its dividend, and stated that it is exploring selling its UK North Sea assets.
“We are proud of Suncor’s results, but we think the market still needs consistent meets and/or beats.” Eight Capital analyst Phil Skolnick said in a note that Suncor had exceeded analyst expectations.
Suncor stock shares last rose 1.2% to C$45.84 at the Toronto Stock Exchange.
($1 = 1.3010 Canadian dollars)
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