Business

Here’s what prompted Suncor Energy (SU) to sell its UK business

Business

Suncor Energy SU, a Canada-based energy company, has signed a share purchase agreement with Equinor UK – a subsidiary of the Norwegian multinational energy company equinor EQNR – for the sale of its UK exploration and production business. The industry is excited and speculating about the reasons for this step.

There are many possible factors at play. One reason is that Suncor Energy has sought to streamline its operations and focus on its core values. The company has recently made several divestitures, including the sale of its Petro-Canada lubricants division, and it’s possible the UK business has been classified as non-core. The sale of its UK business allows Suncor to free up resources to invest in its other assets, such as: B. Oil sands operations in Canada.

Another reason for selling may be related to market conditions. The UK oil and gas industry has faced significant headwinds in recent years, including low oil prices, geopolitical uncertainty and increased regulatory pressure. These factors have made it difficult for companies to maintain profitability in the region. Suncor Energy may have decided it’s better to exit the market altogether. The sale of its UK business allows Suncor to de-risk and refocus on markets that offer more favorable conditions for growth and profitability.

The sale is also likely to create financial value for Suncor and its shareholders by focusing on its core businesses, such as oil sands operations in Canada. This move can also help Suncor achieve better long-term financial returns.

Overall, the sale of Suncor’s UK exploration and production business to Equinor UK Limited marks a significant development in the UK energy sector. While the reasons for the sale may vary, it is clear that both Suncor and Equinor will benefit from the transaction. Suncor will be able to focus on its core assets and reduce exposure to difficult market conditions. Equinor, on the other hand, gains access to a portfolio of valuable oil and gas assets in a region where it’s actively trying to expand its operations. It will be interesting to see how the deal plays out over the coming months and years and what impact it has on the UK energy sector as a whole.

Founded in 1917 and based in Alberta, Canada, Suncor Energy is a leading, globally competitive, integrated energy company. It owns some of the largest tar sands in the world and is engaged in tar sands development, crude oil and gas production, petroleum refining and product marketing.

Zack’s rank and key selection

Suncor Energy currently carries a Zacks rank #3 (hold). Investors interested in the energy sector could also look at better-rated stocks such as NGL Energy Partners (NGL)with a Zacks Rank #1 (Strong Buy) and energy transfer ET, holds a Zacks Rank #2 (Buy). You can see the full list of today’s Zacks #1 Rank stocks can be found here.

NGL energy partners: NGL Energy Partners is worth approximately $509.53 million. Its shares are up 48.8% over the past year.

NGL Energy Partners LP is a limited liability company operating a vertically integrated propane business with three segments – retail propane, wholesale and marketing propane, and midstream propane.

Energy transfer LP: Energy Transfer LP is valued at approximately $40.85 billion. ET has delivered an average earnings surprise of 11.43% over the last four quarters and the current dividend yield is 9.48%.

Energy Transfer LP currently has a forward P/E of 9.17. By comparison, its industry has an average forward P/E of 9.40, meaning Energy Transfer LP is trading at a discount to the group.

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Suncor Energy Inc. (SU): Free Stock Research Report

NGL Energy Partners LP (NGL): Free stock research report

Energy Transfer LP (ET): Free stock research report

Equinor ASA (EQNR): Free Stock Research Report

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