Will The Massive Alberta Wildfire Cost Suncor (SU) C$1B?

Everyone knows about the massive wildfire that hit northern Alberta in May. But the hot news is that the accident might cost Canada’s premier integrated energy player Suncor Energy Inc. (NYSE:SU) almost C$1 billion, as per Reuters.

Suncor along with other leading producers of oil in the region were compelled to stop their operations for weeks following the wildfire. In fact, with this production halt, output of oil in Canada fell by more than 1 million barrels per day.

On Jun 6, 2016, Suncor revealed that its base plant will likely return to the pre-fire level within seven days. It was also predicted by the company that it’s every activities in the locality will return to normal by June end. However, according to the source, blockages may prevent the thermal operation of Suncor to resume as expected.

The extensive wildfire also led Suncor to recently come up with a new production guidance wherein it lowered the 2016 output projection. The company now anticipates 2016 total production of 585,000–620,000 barrels of oil equivalent per day (BOE/D), down from the prior guidance of 620,000–665,000 BOE/D. Of the latest total annual output guidance, oil sands production is expected between 375,000 Bbl/d and 395,000 Bbl/d.

Calgary, Alberta-based Suncor's operations include oil sands development and upgrading, conventional and offshore crude oil and gas production, petroleum refining, and product marketing under the Petro-Canada brand.

SUNCOR ENERGY Price

Currently the company carries a Zacks Rank #4 (Sell), implying that it will underperform the broader U.S. equity market over the next one to three months.

Some better-ranked players in the energy space include McDermott International Inc. (NYSE:MDR) , PetroChina Co. Ltd. (NYSE:PTR) and World Point Terminals LP (NYSE:WPT) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).