SU: Suncor Energy, Inc. Message Board

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Gold/Mining/Energy : SU: Suncor Energy, Inc.

SU 39.62

-0.5%

Nov 3 3:59 PM EST

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From: Dennis Roth	1/16/2008 8:34:37 AM
	of 37

Suncor Energy Inc. (SU): Updated estimates - Goldman Sachs - 01/15/08 What's changed We are updating our 4Q 2007 and 1Q 2008 EPS estimates for Suncor Energy to reflect Suncor’s reported actual oil sands production volumes in December that were lower than expected due to a variety of mechanical issues. December oil sands production was 234 Mb/d versus our estimate of 285 Mb/d and November volumes of 266 Mb/d. Our 4Q 2007 EPS estimate is now $1.48 versus $1.71 previously, and our 1Q 2008 EPS estimate is now $1.54 versus $1.67 previously. Our FY 2007 and 2008 EPS estimates are now $4.67 and $7.08 versus $4.91 and $7.20 previously. Implications We believe that as Suncor ramps up production from 250 – 350 Mb/d there are bound to be some operational hiccups and we do not view the December production as especially concerning at this time. We expect Suncor operations to normalize close to mid-year at the peak 350 Mb/d rates of the 2007 expansion. In the meantime, we expect the announcement of capital costs for the 2011-2012 Voyageur expansion to be the most important nearer-term catalyst for Suncor shares. Valuation We see 31% upside for Suncor shares to our $131 DCF-based target price, versus 21% for large-cap E&Ps. We rate Suncor Buy relative to our Attractive coverage view. Key risks Key risks are commodity price volatility, oil sands cost inflation, and government pronouncements.

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