Suncor Energy Inc. (TSX:SU) completed the acquisition of an additional 14.65% equity stake in Fort Hills Energy Limited Partnership from Teck Resources Limited (TSX:TECK.B) for approximately CAD 690 million.
February 01, 2023
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Suncor Energy Inc. (TSX:SU) agreed to acquire an additional 21.3% equity stake in Fort Hills Energy Limited Partnership from Teck Resources Limited (TSX:TECK.B) for approximately CAD 1 billion on October 26, 2022. Suncor Energy is paying consideration in cash, subject to customary closing adjustments reflecting a November 1, 2022 effective date. Under the terms of agreement, Suncor Energy is acquiring 21.3% stake in Fort Hills Energy Limited Partnership along with certain associated downstream assets. Upon closing, SuncorÃs aggregate share in the project will increase to 75.4%. The acquisition will be funded by cash from asset sale processes currently underway and the company remains on track with its previously articulated capital allocation framework. This acquisition is a part of our Base Plant mine replacement strategy, where Fort Hills meets our return objectives, builds upon our strategy to optimize our portfolio around our core operated assets and underscores SuncorÃs confidence in the long-term value of the Fort Hills Project. With the completion of the purchase agreement, the Fort Hills Energy LPÃs partners will include Suncor and its affiliate (holding an aggregate 75.4% interest) and TotalEnergies EP Canada Ltd. (24.6% interest). Suncor is the operator of the Fort Hills Project through an operating services contract.
The transaction is subject to customary closing conditions, including regulatory approval under the Competition Act and is anticipated to close in the first quarter of 2023. The use of proceeds will be reviewed in accordance with our capital allocation framework early in 2023. As a result of the transaction, we expect to record an after-tax, non-cash impairment charge of approximately CAD 950 million in the third quarter of 2022. RBC Capital Markets and J.P. Morgan Securities Canada have acted as financial advisors to Teck in connection with this transaction. Sean Vanderpol, Benjamin S. P. Hudy, Chrysten E. Perry and Michael Kilby of Stikeman Elliott LLP acted as legal advisor to Teck Resources Limited (TSX:TECK.B).
Suncor Energy Inc. (TSX:SU) completed the acquisition of an additional 14.65% equity stake in Fort Hills Energy Limited Partnership from Teck Resources Limited (TSX:TECK.B) for approximately CAD 690 million on February 2, 2023. As a result of this transaction, Suncor and its affiliateÃs aggregate share in Fort Hills is 68.76%.
Teck Resources Limited is a Canada-based mining company that operates in copper, zinc, steelmaking coal and energy segment. The Companyâs operations and projects include Antamina, Cardinal River, Carmen de Andacollo, Elkview, Fording River, Fording River Extension, Fort Hills, Galore Creek Project, Greenhills, Highland Valley Copper, HVC 2040, Line Creek, NewRange Copper Nickel, NuevaUnion, Quebrada Blanca, Quebrada Blanca Phase II, Quintette Project, Red Dog, Sullivan Mine and Trail Operations. The Antamina mine is a large copper and zinc mine, located in the Andes Mountain range of Peru. Its Carmen de Andacollo is located in the Coquimbo Region of central Chile. The Fording River Extension Project is located adjacent and to the south of Teckâs existing Fording River Operations. Its Galore Creek is located within the territory of the Tahltan in northwestern British Columbia, approximately 150 kilometers northwest of Stewart.
Suncor Energy Inc. (TSX: SU) completed the acquisition of an additional 14.65% equity stake in Fort Hills Energy Limited Partnership from Teck Resources Limited (TSX