Mr. Steve Williams reports

SUNCOR ENERGY REPORTS SECOND QUARTER 2015 RESULTS

Suncor Energy Inc. is releasing its second quarter 2015 results.

"Suncor generated strong cash flows in excess of $2.1-billion during the second quarter of 2015, more than enough to fund our capital requirements and our dividend," said Steve Williams, president and chief executive officer. "As a result, we are returning more value to shareholders by increasing our dividend and renewing our share buyback program."

Highlights:

• Cash flow from operations of $2,155-million ($1.49 per common share), versus $2,406-million ($1.64 per common share) in the prior year quarter, despite a decrease in crude oil benchmarks of over 40 per cent;
• Operating earnings of $906-million (63 cents per common share) and net earnings of $729-million (50 cents per common share);
• Solid refinery utilization and a favourable downstream business environment resulted in refining and marketing operating earnings of $631-million;
• Production from oil sands operations increased by 45,000 barrels per day from the prior-year quarter to 423,800 barrels per day, despite planned maintenance at Firebag. The increase, combined with lower natural gas prices and a continued focus on cost reduction initiatives, resulted in a further decrease in cash operating costs per barrel to $28 for the quarter;
• The company's 2015 capital expenditures outlook has been reduced by $400-million to $5.8-billion to $6.4-billion as a result of Suncor's continued focus on capital discipline and cost reduction initiatives;
• Suncor's board of directors has approved an increase to the company's dividend to 29 cents per common share and the renewal of the share repurchase program, demonstrating the company's ability to generate cash flows and return value to shareholders.

Financial results

Suncor Energy recorded second quarter 2015 operating earnings of $906-million (63 cents per common share) and cash flow from operations of $2,155-million ($1.49 per common share), compared with $1,135-million (77 cents per common share) and $2,406-million ($1.64 per common share), respectively, in the prior-year quarter, reflecting the lower crude oil price environment. Highlights of the second quarter included increased oil sands operations production, a favourable downstream pricing environment and solid refinery utilizations. For the 12 months ended June 30, 2015, free cash flow was $795-million, compared with $3,599-million for the 12 months ended June 30, 2014.

Net earnings were $729-million (50 cents per common share) in the second quarter of 2015, compared with net earnings of $211-million (14 cents per common share) in the prior year quarter, which included impairment charges. Net earnings for the second quarter of 2015 included a $423-million deferred income tax charge related to a 2-per-cent increase in the Alberta corporate income tax rate. During the second quarter of 2015, the company also recorded an after-tax foreign exchange gain on the revaluation of U.S.-dollar-denominated debt of $178-million, and an after-tax gain of $68-million on the disposal of the company's share of certain assets and liabilities of Pioneer Energy in the refining and marketing segment. Net earnings in the prior-year quarter included after-tax impairment charges of $718-million on the company's interest in the Joslyn mining project, $297-million against the company's Libyan assets and $223-million on various oil sands assets, partially offset by an after-tax foreign exchange gain of $282-million.

Operating results

Suncor's total upstream production was 559,900 barrels of oil equivalent per day in the second quarter of 2015, compared with 518,400 barrels of oil equivalent per day in the prior-year quarter, due primarily to strong reliability in oil sands operations and the continued ramp-up of Golden Eagle production in the United Kingdom.

Oil sands operations production was 423,800 barrels per day in the second quarter of 2015, compared with 378,800 barrels per day in the prior-year quarter, primarily due to reliable operations resulting in minimal unplanned maintenance. Planned maintenance at Firebag and at Upgrader 1 was completed during the second quarter of 2015.

Cash operating costs per barrel for oil sands operations decreased in the second quarter of 2015 to $28 per barrel, compared with $34.10 per barrel in the prior-year quarter, due to increased production, and lower costs as a result of lower natural gas prices and a continued focus on cost reduction initiatives.

"As a result of our continued focus on operational excellence, production at oil sands operations increased by 45,000 barrels per day," said Mr. Williams. "At the same time, we reduced our absolute operating costs, consistent with the commitments we outlined in the first quarter of this year."

Suncor's share of Syncrude production was 24,900 barrels per day in the second quarter of 2015, and remained comparable with the prior year's second quarter production of 24,300 barrels per day as both periods included planned maintenance.

Production volumes in exploration and production (E&P) decreased to 111,200 barrels of oil equivalent per day in the second quarter of 2015, compared with 115,300 barrels of oil equivalent per day in the prior-year quarter, primarily due to a planned turnaround at Terra Nova during the second quarter of 2015, and natural declines at Hibernia and White Rose. These were partially offset by the continued ramp-up of production from Golden Eagle. Production in Libya continues to be substantially shut in due to political unrest, with the timing of a return to normal operations remaining uncertain.

During the second quarter of 2015, refining and marketing completed planned maintenance at the Edmonton and Sarnia refineries. Average refinery utilization improved to 90 per cent in the second quarter, compared with 85 per cent in the prior-year quarter, which included planned maintenance events at the Montreal and Edmonton refineries.

Strategy update

Suncor continues to focus on safely and reliably operating its assets, and optimizing the value chain through integration. Subsequent to the quarter, the company reached an agreement with TransAlta Corp. to exchange Suncor's Kent Breeze and its share of the Wintering Hills wind power facilities for TransAlta's Poplar Creek cogeneration facilities, which provide steam and power to Suncor's oil sands operations.

"The agreement with TransAlta is aligned with our approach of bringing assets that are integral to our operations in-house. As a result of securing the long-term future use of the Poplar Creek cogeneration facilities, we expect to improve efficiency, reliability and profitability," concluded Mr. Williams.

Subsequent to the quarter, Suncor's board of directors approved an increase to the company's quarterly dividend to 29 cents per common share.

Oil sands operations

Oil sands operations continued work on projects that enhance safety, reliability and environmental performance, including the completion of planned maintenance at Firebag and annual coker maintenance in Upgrader 1. Second quarter spending also included continuing well pad construction to maintain existing production levels at Firebag and MacKay River.

Oil sands ventures

The Fort Hills project remains on schedule with detailed engineering activities 89 per cent complete at the end of the second quarter, while construction activities were 34 per cent complete. Spending during the quarter included engineering, procurement, module fabrication and site construction. The project is expected to deliver approximately 73,000 barrels per day of bitumen to Suncor's operations, with first oil expected in the fourth quarter of 2017, and 90 per cent of its planned capacity being reached within twelve months thereafter.

Exploration and production

Golden Eagle production averaged 15,000 barrels of oil equivalent per day (net) in the second quarter of 2015, as additional wells were brought on-line. Construction of the Hebron project continued in the second quarter of 2015, with first oil expected in 2017.

Growth capital in East Coast, Canada, includes field extension projects that leverage existing facilities and infrastructure. First oil was achieved at the South White Rose Extension project during the second quarter of 2015, and drilling activities continue. Growth capital also included spending related to drilling in the North Sea.

                   OPERATING EARNINGS RECONCILIATION
                   (in millions of Canadian dollars)

                                      Three months ended    Six months ended
                                                 June 30,            June 30,
                                          2015      2014      2015      2014

Net earnings                           $   729   $   211   $   388   $ 1,696
Unrealized foreign exchange (gain)
loss on U.S.-dollar-denominated
debt                                      (178)     (282)      762        26
Impact of income tax rate
adjustments on deferred taxes              423         -        17         -
Gain on significant disposal               (68)        -       (68)        -
Restructuring charges                        -         -        57         -
Insurance proceeds                           -         -       (75)        -
Impairments                                  -     1,238         -     1,238
Reserves redetermination                     -       (32)        -       (32)
Operating earnings                         906     1,135     1,081     2,928

Corporate guidance

Suncor has updated its 2015 corporate guidance previously issued on April 29, 2015. The changes to the company's guidance are presented in this news release, and are based on year-to-date results and the company's latest forecasts.

The outlook range for capital expenditures has been lowered from $6.2-billion to $6.8-billion to $5.8-billion to $6.4-billion as non-essential projects have been re-evaluated as part of the company's cost reduction initiatives and overall approach to capital discipline.

                         CAPITAL EXPENDITURES
         (in millions of Canadian dollars, except as indicated)

                            2015 full-year outlook,     2015 full-year outlook,
                                    April 29, 2015       revised July 29, 2015
                                Capital     Growth          Capital     Growth
                           expenditures    capital     expenditures    capital

Oil sands operations     2,150 to 2,400         10%  1,950 to 2,200         15%
Oil sands ventures       1,700 to 1,850         90%  1,700 to 1,850         90%
Oil sands total          3,850 to 4,250         45%  3,650 to 4,050         50%
Exploration and
production               1,450 to 1,550         95%  1,250 to 1,350         95%
Refining and marketing       750 to 800          5%      750 to 800          5%
Corporate                    150 to 200         70%      150 to 200         70%
Total                    6,200 to 6,800         50%  5,800 to 6,400         55%

The outlook for Suncor's total production has increased by net 10,000 barrels of oil equivalent per day, to 550,000 to 595,000 barrels of oil equivalent per day.

                              2015 full-year outlook,  2015 full-year outlook,
                                      April 29, 2015    revised July 29, 2015

Suncor total production
(boe/d)                           540,000 to 585,000       550,000 to 595,000
Oil sands (bbl/d)                 410,000 to 440,000       410,000 to 440,000
Syncrude (bbl/d)                    32,000 to 36,000         32,000 to 36,000
Exploration and production 
Canada (boe/d)                      53,000 to 58,000         47,000 to 52,000
Exploration and production,
international (boe/d)               45,000 to 51,000         61,000 to 67,000
Sales assumptions
Oil sands sales
Synthetic crude oil (bbl/d)       285,000 to 315,000       300,000 to 330,000
Diesel                                            10%                     10%
Sweet                                             40%                     35%
Sour                                              50%                     55%
Bitumen (bbl/d)                   120,000 to 140,000       105,000 to 125,000

The outlook for oil sands cash operating costs has been reduced from $30 to $33 per barrel, to $28.00 to $31 per barrel. Suncor's outlook for its Canadian tax rate has changed to 26 per cent to 27 per cent and its international tax rate has changed to 30 per cent to 35 per cent.

For further details and advisories regarding Suncor's 2015 revised corporate guidance, see the company's website.

Normal course issuer bid

Subsequent to June 30, 2015, the Toronto Stock Exchange accepted a notice filed by Suncor of its intention to renew its normal course issuer bid (NCIB) to continue to purchase shares under its previously announced buyback program through the facilities of the TSX, the New York Stock Exchange and alternative trading platforms. The notice provides that Suncor may purchase for cancellation up to approximately $500-million worth of its common shares beginning Aug. 5, 2015, and ending Aug. 4, 2016.

The actual number of common shares that may be purchased and the timing of any such purchases will be determined by Suncor. Suncor believes that, depending on the trading price of its common shares and other relevant factors, purchasing its own shares represents an attractive investment opportunity, and is in the best interests of the company and its shareholders. Between July 23, 2014, and Dec. 31, 2014, and pursuant to Suncor's previously announced normal course issuer bids, Suncor successfully completed the purchase of approximately $897-million worth of its common shares (22,454,976), at a weighted average price of $39.93 per common share. As at July 23, 2015, Suncor had 1,445,849,364 common shares issued and outstanding. Pursuant to the NCIB, Suncor has agreed that it will not purchase more than 43,375,481 common shares, equal to approximately 3 per cent of Suncor's issued and outstanding common shares.

Subject to the block purchase exemption that is available to Suncor for regular open-market purchases under the NCIB, Suncor will limit daily purchases of Suncor common shares on the TSX in connection with the NCIB to no more than 25 per cent (786,498) of the average daily trading volume of Suncor's common shares on the TSX during any trading day. In the future, Suncor may enter into an automatic share purchase plan in relation to purchases made in connection with the NCIB.

We seek Safe Harbor.