Suncor Energy Inc. is an integrated energy company with over 40 years of oil sands experience in Canada and internationally. The presentation recommends a long position in Suncor, arguing it is undervalued with a price target of $43 per share based on its strong correlation with the SPTSEN energy index, strategic acquisitions, and opportunities from growing global energy demand and management's visionary leadership. Key risks include unexpected downtime, international uncertainties, and environmental issues.

1. Stock Pitch Competition 2011
Pramod Jindal
Beam Ukarapong
November 12 2011

2. Overview
Suncor Energy Inc. (NYSE:SU, TSX:SU)
• Integrated energy company
• Over 40 years of Oil Sands experience
• Canada & International: crude oil and natural gas
• Canada: crude oil, petroleum, and petrochemical products
• Business units:
• Oil Sands
• Natural Gas
• International and Offshore
• Refining and Marketing

3. Key Statistics
• Price $31.44
• 52 week low $23.97
• 52 week high $47.27
• Average daily volume 6.07M
• Shares outstanding 1.57B
• Market cap $49.50B
As of November 9, 2011

4. Long Thesis: Suncor Energy Inc.
• Undervalued; Price target: $43
• Strong correlation with SPTSEN Index
– SPTSEN expected to reach 347.6355 by Q2’ 2012
• Strategic acquisitions
– Production level expected to reach 1 mboe/d by 2020
• Opportunities
– World population (~6 billion) expected to be ~7.6 billion by 2020
– Libyan stability
• Management Team
– Visionary: foresee hidden fortune (first to exploit Oil Sands)
• Continued expansion of renewable energy projects
• Target Oil Sands cash costs ~$30 range
– Exceed production target despit5e maintenance/shut down

5. Industry Outlook
• Revenue determined by Brent Oil Price (expected to increase to $122)
Source: Bloomberg

6. SU Stock Performance
• Strongly correlated with SPTSEN Index
Source: Bloomberg

7. Investment Highlights
• Current:
– Firebag Stage 3: operational and production continuing to ramp up
– Firebag Stage 4: expansion in offing- to be operational by Q1’ 2013
– Terra Nova maintenance due completion
– Technology and innovation
• Tailings Reduction Operations (TROTM)
• Recent:
– Partnership with Total E&P
• Fort Hills and Joslyn oil sands
• Restart Voyageur Upgrader (200,000 bpd by 2016)
• Past(2009):
– Petro Canada merger
• Imminent re-entry in Libya

8. Financial Highlights
• Focus on debt reduction
Q3 2011 Q3 2010
• Declared 11cents dividend, Nov 7 2011
Revenue $1.28 B $1.22 B
– Consistent with 10% increase (82₵/share) (78₵/share)
announced in May 2011
CFO $2.72 B $1.63 B
• 2009: Positive ripples from
Petro Canada acquisition
– Annual savings of CAD$1.8B
• Stability of future cash flow
– “American consumption of oil and gas expected to increase almost 50%
by 2025” (CEO Richard George)
– Canadian oil sands production expected to increase at 6% (CAGR) to
3.3m bbl/d by 2025 (Datamonitor)

9. Comparables
P/NAV EV/DACF EV/CFPS
2011 2011E 2012E 2013E 2011E 2012E 2013E
Cenovus Energy 119% 8.7 7.7 7.3 8.1 7.2 6.8
Husky Energy 97% 4.4 4.6 4.5 4.2 4.5 4.6
Imperial Oil 97% 9 8.4 7.2 8.8 7.8 6.7
Average 97% 7 6.3 6.3 6.6 6 5.6
Suncor 75% 5.8 4.7 4.2 5.2 4.5 4.2

10. Risk Profile
• Unexpected downtime and maintenance
• International
– Syrian sanctions & Libyan uncertainties
– European debt crises and slowdown in China
• EU’s proposed regulation (The Globe and Mail Nov 3, 2011)
• Keystone XL
• Environmental issue
• Foreign exchange rate exposure
Source: Bank of America

11. Recommendation
• Long Suncor
• Target price: $43

12. Q&A