Mr. Rich Kruger reports

SUNCOR ENERGY REPORTS THIRD QUARTER 2023 RESULTS

Suncor Energy Inc. has released its results for the third quarter of 2023.

Highlights:

• Delivered adjusted funds from operations of $3.6-billion and adjusted operating earnings of $2-billion;
• Returned nearly $1-billion to shareholders through $676-million in dividends and $300-million in share repurchases;
• Delivered total upstream production of 690,500 barrels of oil equivalent per day, which included combined upgrader utilization of over 100 per cent outside of planned maintenance activities and continued strong in situ performance, partially offset by asset divestments in exploration and production (E&P);
• Strong refinery operating performance resulted in refinery utilization of 99 per cent;
• Successfully completed the first full plant turnaround at Fort Hills and, subsequent to the quarter, completed significant planned turnaround activities at Upgrader 2;
• Subsequent to the quarter, reached an agreement to acquire the remaining 31.23-per-cent working interest in Fort Hills for $1,468-million.

"We generated over $3.6-billion in adjusted funds from operations and returned nearly $1-billion to shareholders this quarter," said Rich Kruger, Suncor's president and chief executive officer. "Outside of planned maintenance activities, our upgrader and refinery utilizations were over 100 per cent, highlighting our strong operating performance in the third quarter."

Financial results

• Suncor's adjusted operating earnings were $1.980 billion ($1.52 per common share) in the third quarter of 2023, compared to $2.565 billion ($1.88 per common share) in the prior year quarter, primarily due to decreased crude oil price realizations reflecting a weaker business environment in the current quarter, increased royalties and decreased sales volumes in E&P due to asset divestments, partially offset by increased refining and marketing gross margins on a first-in, first-out (FIFO) basis due to the impacts of improving benchmark pricing through the quarter, increased sales volumes in Oil Sands and lower income taxes.
• Suncor's net earnings were $1.544 billion ($1.19 per common share) in the third quarter of 2023, compared to a net loss of $609 million ($0.45 per common share) in the prior year quarter. In addition to the factors impacting adjusted operating earnings, net earnings (loss) for the third quarter of 2023 and the prior year quarter were impacted by the reconciling items shown in the table above.
• Adjusted funds from operations were $3.634 billion ($2.80 per common share) in the third quarter of 2023, compared to $4.473 billion ($3.28 per common share) in the prior year quarter, and were influenced by the same factors impacting adjusted operating earnings described above. Adjusted funds from operations in the third quarter of 2022 were also impacted by the recognition of $147 million of insurance proceeds related to the company's assets in Libya recorded in other income (loss).
• Cash flow provided by operating activities, which includes changes in non-cash working capital, was $4.184 billion ($3.22 per common share) in the third quarter of 2023, compared to $4.449 billion ($3.26 per common share) in the prior year quarter.
• Suncor's total operating, selling and general (OS&G) expenses were $3.124 billion in the third quarter of 2023, compared to $3.075 billion in the prior year quarter, with the increase primarily due to a share-based compensation expense in the current quarter compared to a recovery in the prior year quarter, increased operating expenses associated with the company's additional working interest in Fort Hills that was acquired in the first quarter of 2023, and increased mining activity at the company's mines. The increase was partially offset by lower natural gas prices and reduced operating expenses as a result of international asset divestments at E&P.
• As at September 30, 2023, Suncor's net debt was $12.995 billion, a reduction of $1.399 billion compared to June 30, 2023, with the decrease in net debt primarily due to a decrease in short-term indebtedness. The company anticipates an increase in its net debt balances in the fourth quarter of 2023 as a result of the anticipated acquisition of the remaining working interest in Fort Hills.

Operating results:

• Total Oil Sands bitumen production increased in the third quarter of 2023 compared to the prior year quarter, primarily due to the impact of significant planned turnaround activities at Syncrude in the prior year quarter and continued strong performance from the company's In Situ assets, partially offset by decreased bitumen production at Oil Sands Base as a result of planned turnaround activities, and at Fort Hills, where the impact of planned turnaround activities more than offset the company's increased working interest.
• The company's net SCO production increased to 469,300 bbls/d in the third quarter of 2023, representing combined upgrader utilizations of 88 per cent, compared to 405,100 bbls/d and 75 per cent in the prior year quarter, reflecting lower planned maintenance activities in the current period and over 100 per cent utilizations outside of planned maintenance activities.
• The company's saleable non-upgraded bitumen production decreased to 176,800 bbls/d in the third quarter of 2023, compared to 240,900 bbls/d in the prior year quarter, as the company leveraged its regional flexibility to maximize higher upgrader availability for In Situ and Fort Hills bitumen production in the current quarter.
• At Fort Hills, the first full plant turnaround was successfully completed during the quarter, and the asset safely ramped up to normal operating rates within the quarter. Subsequent to the quarter, significant planned turnaround activities at Upgrader 2 and planned maintenance activities at Firebag were successfully completed, and both assets have safely ramped up to normal operating rates.
• E&P production during the third quarter of 2023 decreased compared to the prior year quarter, primarily due to international asset divestments.
• Refinery crude throughput was 463,200 bbls/d and refinery utilization was 99 per cent in the third quarter of 2023, compared to 466,600 bbls/d and 100 per cent in the prior year quarter, reflecting strong utilizations across all refineries in both periods.
• Refined product sales of 574,100 bbls/d in the third quarter of 2023 were comparable to 577,300 bbls/d in the prior year quarter.

Corporate and Strategy Updates

• Agreement reached to acquire the remainder of Fort Hills. Subsequent to the third quarter of 2023, Suncor reached an agreement to acquire TotalEnergies EP Canada Ltd., which holds a 31.23 per cent working interest in Fort Hills, for $1.468 billion before closing adjustments and other closing costs. All necessary regulatory approvals have been received and the transaction will have an effective date of April 1, 2023, subject to closing, which is anticipated to occur in the fourth quarter of 2023.
• Terra Nova to return to service. Commissioning activities are nearing completion at the Terra Nova Floating, Production, Storage and Offloading vessel following the completion of the Terra Nova Asset Life Extension project. The asset is expected to safely restart production in the fourth quarter.

"I am pleased to be acquiring the remaining working interest in Fort Hills," said Kruger. "This transaction adds 61,000 bbls/d of high-quality bitumen production capacity to our portfolio, advances our long-term strategy by securing bitumen supply to fill our Base Plant upgraders, and builds on our best-in-class integrated model. We will continue to maximize value through regional synergy opportunities across our oil sands asset base, adding long-term value for shareholders."

Corporate Guidance Updates

There have been no changes to the corporate guidance ranges previously issued on May 8, 2023.

Suncor Energy is Canada's leading integrated energy company. Suncor's operations include oil sands development, production and upgrading; offshore oil and gas; petroleum refining in Canada and the U.S.; and the company's Petro-Canada(TM) retail and wholesale distribution networks (including Canada's Electric Highway(TM), a coast-to-coast network of fast-charging electric vehicle stations). Suncor is developing petroleum resources while advancing the transition to a low-emissions future through investment in power and renewable fuels. Suncor also conducts energy trading activities focused principally on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. Suncor has been recognized for its performance and transparent reporting on the Dow Jones Sustainability North America Index, FTSE4Good Index and CDP. Suncor's common shares (symbol: SU) are listed on the Toronto Stock Exchange and the New York Stock Exchange.- 30 -

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