Mr. Rich Kruger reports

SUNCOR ENERGY REPORTS FOURTH QUARTER 2023 RESULTS

Suncor Energy Inc. has released its fourth quarter 2023 results.

Unless otherwise noted, all financial figures are unaudited, presented in Canadian dollars and derived from the company's condensed consolidated financial statements, which are based on Canadian generally accepted accounting principles (GAAP), specifically international financial reporting standards (IFRS) as issued by the International Accounting Standards Board (IASB), and are prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting. Production volumes are presented on a working interest basis, before royalties, except for production values from the company's Libya operations, which are presented on an economic basis. Certain financial measures referred to in this news release (adjusted funds from operations, adjusted operating earnings, free funds flow and net debt) are not prescribed by Canadian generally accepted accounting principles. References to oil sands operations exclude Suncor Energy's interest in Fort Hills and Syncrude.

Fourth quarter highlights:

• Adjusted funds from operations of $4.0-billion, including a one-time tax benefit of $880-million;
• Returned $1.1-billion to shareholders -- $704-million in dividends and $375-million in share repurchases;
• Total upstream production of 808,100 barrels of oil equivalent (boe/d) -- second-highest quarter in company history;
• Best-ever oil sands production of 757,400 barrels per day (bbl/d) with upgrader utilization over 100 per cent outside maintenance period;
• Strong downstream performance with refining throughput of 455,900 bbl/d and utilization at 98 per cent;
• Quarterly dividend per share increased by approximately 5 per cent to 54.5 cents per share.

"Our fourth quarter performance can be characterized as finishing the year strong, delivering on commitments and building momentum coming into 2024," said Rich Kruger, Suncor's president and chief executive officer. "Most importantly, the quarter was the safest quarter of the year in what resulted in our safest year ever. In addition, upstream reliability across our operations was at or near record highs, achieving the second-highest quarterly total production in the company's history and the highest quarterly oil sands production. Downstream performance was equally strong with refining utilization in the quarter at 98 per cent. Looking ahead, we will continue our intense focus on safety, operational excellence, reliability and profitably to further improve performance and add value for our shareholders."

Annual 2023 highlights:

• Best overall employee and contractor safety performance in the company's history. Adjusted funds from operations of $13.3-billion -- second highest in the company's history;
• Returned $5.0-billion to shareholders -- $2.8-billion in dividends and $2.2-billion in share repurchases;
• Total upstream production of 745,700 boe/d -- second highest in the company's history;
• Record oil sands performance of 689,600 bbl/d, including best-ever at Syncrude and Firebag;
• Best-ever combined upgrader utilization of 92 per cent, 3 per cent better than previous high.Solid downstream performance with refinery utilization of 90 per cent, including 99 per cent in the second half;
• Acquired remaining 45.89-per-cent interest in Fort Hills for $2.2-billion, completed asset sales with proceeds of $1.8-billion.

Financial results:

• Suncor's adjusted operating earnings were $1.635-billion ($1.26 per common share) in the fourth quarter of 2023, compared with $2.432-billion ($1.81 per common share) in the prior-year quarter, with the decrease primarily due to lower crude oil and refined product realizations, reflecting a weaker business environment in the current quarter, and decreased sales volumes in exploration and production (E&P), partially offset by lower income taxes, increased sales volumes in oil sands, and increased refinery production in refining and marketing (R&M). Adjusted operating earnings were also impacted by a weakening of benchmark pricing in both periods, resulting in an increased realization of intersegment profit in the current quarter compared with the prior-year quarter.
• Suncor's net earnings were $2.82-billion ($2.18 per common share) in the fourth quarter of 2023, which included a $1.125-billion non-cash gain as a result of the acquisition of TotalEnergies EP Canada Ltd. (TotalEnergies Canada), compared with $2.741-billion ($2.03 per common share) in the prior-year quarter. In addition to the factors impacting adjusted operating earnings, net earnings for the fourth quarter of 2023 and the prior-year quarter were impacted by the reconciling items shown in the corresponding table.
• Adjusted funds from operations were $4.034-billion ($3.12 per common share) in the fourth quarter of 2023, compared with $4.189-billion ($3.11 per common share) in the prior-year quarter, and were influenced by the same factors impacting adjusted operating earnings, as well as one-time tax benefit of approximately $880-million relating to the acquisition of TotalEnergies Canada in the fourth quarter of 2023.
• Cash flow provided by operating activities, which includes changes in non-cash working capital, was $4.318-billion ($3.34 per common share) in the fourth quarter of 2023, compared with $3.924-billion ($2.91 per common share) in the prior-year quarter.
• Suncor's total operating, selling and general (OS&G) expenses were $3.395-billion in the fourth quarter of 2023, compared with $3.556-billion in the prior-year quarter, with the decrease primarily due to lower commodity costs, primarily natural gas, decreased share-based compensation expenses and the impacts of the sale of the United Kingdom E&P portfolio. The decrease in OS&G was partially offset by increased operating expenses associated with the company's additional working interests in Fort Hills acquired in the first and fourth quarters of 2023.
• As at Dec. 31, 2023, Suncor's net debt was $13.678-billion, an increase of $683-million compared with Sept. 30, 2023, primarily due to a long-term debt issuance and a net increase in leases associated with the Fort Hills acquisition during the quarter, and a decrease in cash and cash equivalents being partially offset by a decrease in short-term indebtedness.

"Fourth quarter operational performance was exceptionally strong and contained several production records, including record oil sands production, record gross production at Fort Hills and the second-highest quarterly upstream production in our company's history," said Mr. Kruger. "These results demonstrate how our heightened focus on the fundamentals translates to delivering exceptional performance and meeting our commitments."

Operating results:

• Total oil sands bitumen production increased in the fourth quarter of 2023 compared with the prior-year quarter, primarily due to the company's increased working interest and strong bitumen production at Fort Hills, partially offset by decreased bitumen production at oil sands base and Firebag, as a result of planned turnaround and maintenance activities.
• The company's net synthetic crude oil (SCO) production was 475,700 bbl/d in the fourth quarter of 2023, compared with 517,500 bbl/d in the prior-year quarter, reflecting significant planned turnaround activities at oil sands base upgrader 2 that were completed in the first part of the fourth quarter of 2023. Oil sands base upgrader utilization was 83 per cent in the fourth quarter of 2023, compared with 93 per cent in the prior-year quarter. Syncrude upgrader utilization was 101 per cent in the fourth quarter of 2023, compared with 99 per cent in the prior-year quarter.
• Internal bitumen transfers reached 45,300 bbl/d in the fourth quarter of 2023, demonstrating the increased level of integration within Suncor's regional oil sands assets. The increase was primarily driven by 41,800 bbl/d of bitumen transferred from Fort Hills to upgrading at oil sands base, taking advantage of the yield uplift from Fort Hills barrels.
• The company's saleable non-upgraded bitumen production increased to 281,700 bbl/d in the fourth quarter of 2023, compared with 170,600 bbl/d in the prior-year quarter, reflecting the company's increased working interest and strong production at Fort Hills, as well as increased in situ and Fort Hills bitumen production sent to market in the current quarter due to lower upgrader availability as a result of the planned turnaround at oil sands base upgrader 2.
• E&P production during the fourth quarter of 2023 decreased compared with the prior-year quarter, primarily due to the divestment of the company's U.K. portfolio.
• Refinery crude throughput was 455,900 bbl/d and refinery utilization was 98 per cent in the fourth quarter of 2023, compared with 440,000 bbl/d and 94 per cent in the prior-year quarter, reflecting strong utilization across all refineries in the current quarter and the impact of unplanned maintenance in the prior-year quarter.
• Refined product sales were 575,500 bbl/d in the fourth quarter of 2023, compared with 548,200 bbl/d in the prior-year quarter, with the increase due to higher refinery production, partially offset by a larger build of refined product inventory in the current quarter compared with the prior-year quarter.

Corporate and strategy updates:

• Closed purchase of TotalEnergies' Canadian operations: On Nov. 20, 2023, Suncor completed the acquisition of TotalEnergies Canada, which held the remaining 31.23-per-cent working interest in Fort Hills, for $1.468-billion before closing adjustments and other closing costs, making Suncor the sole owner of Fort Hills. The effective date of the transaction was April 1, 2023.
• Terra Nova return to production: The Terra Nova Floating, Production, Storage and Offloading vessel safely restarted production in the fourth quarter of 2023, with production expected to continue ramping up in the beginning of 2024.
• Quarterly dividend increase: In the fourth quarter of 2023, Suncor's board of directors approved a quarterly dividend of 54.5 cents per share, an increase of approximately 5 per cent over the prior-quarter dividend.

Corporate guidance updates

There have been no changes to the corporate guidance ranges previously issued on Dec. 5, 2023.

For further details and advisories regarding Suncor's 2024 corporate guidance, see the company's website.

Normal course issuer bid (NCIB)

Subsequent to the fourth quarter of 2023, the Toronto Stock Exchange accepted a notice filed by Suncor to renew its NCIB to purchase the company's common shares through the facilities of the TSX, New York Stock Exchange and/or alternative trading systems. The notice provides that, beginning Feb. 26, 2024, and ending Feb. 25, 2025, Suncor may purchase for cancellation up to 128.7 million common shares, equal to approximately 10 per cent of Suncor's public float of 1,287,130,400 common shares as of Feb. 12, 2024. On Feb. 12, 2024, Suncor had 1,287,461,183 common shares issued and outstanding.

The actual number of common shares that may be purchased under the NCIB 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. The company does not expect the decision to allocate cash to repurchase shares will affect its long-term strategy.

Pursuant to Suncor's previous NCIB, Suncor agreed that it would not purchase more than 132.9 million common shares between Feb. 17, 2023, and Feb. 16, 2024. Between Feb. 17, 2023, and Feb. 16, 2024, and pursuant to Suncor's previous NCIB, Suncor repurchased 47,106,802 shares on the open market for approximately $2.0-billion, at a weighted average price of $42.87 per share.

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 (1,970,790 common shares) of the average daily trading volume of Suncor's common shares on the TSX during the previous six-month period (7,883,161 common shares). Purchases under the NCIB will be made through open market purchases at market price, as well as by other means as may be permitted by securities regulatory authorities. Suncor expects to enter into an automatic share purchase plan in relation to purchases made in connection with the NCIB on Feb. 26, 2024.

Non-GAAP financial measures

Certain financial measures in this news release -- namely adjusted funds from operations, adjusted operating earnings, free funds flow and net debt, and related per-share or per-barrel amounts -- are not prescribed by GAAP. These non-GAAP financial measures are included because management uses the information to analyze business performance, leverage and liquidity, as applicable, and it may be useful to investors on the same basis. These non-GAAP financial measures do not have any standardized meaning and, therefore, are unlikely to be comparable with similar measures presented by other companies. Therefore, these non-GAAP financial measures should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. Except as otherwise indicated, these non-GAAP financial measures are calculated and disclosed on a consistent basis from period to period. Specific adjusting items may only be relevant in certain periods.

Suncor is an integrated energy company headquartered in Calgary, Alta., Canada. Suncor's operations include oil sands development, production and upgrading; offshore oil production; petroleum refining in Canada and the United States; and the company's Petro-Canada retail and wholesale distribution networks (including Canada's Electric Highway, 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 investments in power and renewable fuels. Suncor also conducts energy trading activities focused primarily on the marketing and trading of crude oil, natural gas, byproducts, refined products and power. Suncor's common shares are listed on the Toronto Stock Exchange and the New York Stock Exchange.

We seek Safe Harbor.