- Teck Resources (TECK.A), in conjunction with its partners, is preparing for a ramp-up in oil production at its Fort Hills oil sands mine in Alberta
- The company owns a 21.3 per cent interest in the Fort Hills Energy Limited Partnership, with Total E&P Canada and Suncor Energy holding the remaining interest
- With the restart of a second train, production is expected to top 120,000 barrels per day by the end of the year
- In line with the ramp-up, unit operating costs have also been lowered by approximately C$2.00 to between $35.00 and $38.00 per barrel
- Teck Resources (TECK.A) is currently down 2.13 per cent and is trading at $17.50 per share
Teck Resources (TECK-A), in conjunction with its partners, is preparing for a ramp-up in oil production at its Fort Hills oil sands mine.
The Vancouver-based company holds a 21.3 per cent interest in the Fort Hills Energy Limited Partnership, which owns the mine, with Total E&P Canada and Suncor Energy holding the remaining interest. An affiliate of Suncor currently acts as the operator of the mine.
In an attempt to push total production to 120,000 barrels per day by the end of the year, the partnership has made the decision to restart the second Fort Hills train.
This comes after Fort Hills was reduced to a single train facility in the first quarter of 2020 in an effort to reduce negative cash flow brought on by the COVID-19 pandemic.
While the bolstered production will likely offset some of the damage dealt by the virus, Teck has narrowed its full-year production guidance at Fort Hills from 100,000 to 120,000 barrels per day to between 105,000 and 115,000 barrels per day.
The company has also dropped its unit operating guidance by approximately C$2.00 per barrel, from its previous estimate of between $37.00 and $40.00 per barrel to between $35.00 and $37.00 per barrel.
Teck also noted that it had announced a reduction in its energy spending earlier this year, from $175 million to $85 million.
The company said this remains unchanged, and that it, along with its partners, will continue to monitor market conditions and may adjust the operating plan for Fort Hills accordingly.
Teck Resources (TECK.A) is currently down 2.13 per cent and is trading at $17.50 per share at 11:16am EDT.