(RTTNews) - Canada's largest energy company Suncor Energy Inc. (SU: News ,SU.TO: News ), after the merger with its rival Petro-Canada, reported its quarterly results Friday, posting higher profit for the third-quarter. However, operating earnings dropped year-over-year, mainly due to lower prices and higher operational expenses in its oil sands segment.

On August 1, 2009, Suncor Energy completed its merger with Petro-Canada. Therefore, the three and nine months reflect results of the post-merger Suncor from August 1, 2009 together with results of legacy Suncor from January 1 through July 31, 2009. The comparative figures reflect solely the 2008 results of legacy Suncor.

The Calgary, Alberta-based company earned C$929 million for the recent quarter, compared to C$815 million last year. On a per share basis, earnings fell to C$0.74 from C$0.86 in the year-ago quarter.

Excluding items, operating earnings plunged to C$288 million or C$0.23 per share, from C$810 million or C$0.87 per share reported in the third quarter of 2008.

Cash flow from operations for the quarter totaled C$574 million, down from C$1.146 billion recorded in the three-month period of last year.

Suncor Energy noted that the decrease in operating earnings and cash flow was mainly due to lower price realizations, which it attributed to the considerably weaker benchmark commodity prices in the third- quarter, together with higher operating expenses at oil sands, as a result of increased production and sales volumes.
However, the results were offset in part, by increased upstream production resulting from the merger with Petro-Canada and improved operational performance in existing oil sands assets, the company noted.

Quarterly revenues declined to C$8.44 billion from C$8.51 billion in the corresponding period of last year.

Following the completion of the merger with Petro-Canada, Suncor's total upstream production during the final two months of the third quarter of 2009 averaged 630,600 barrels of oil equivalent or boe per day. Additional production resulting from the merger accounted for 289,400 boe per day. Upstream production from Suncor's legacy oil sands and natural gas operations averaged 339,900 boe per day in the latest quarter, versus 281,000 boe per day in the same quarter a year ago.

Excluding proportionate production share from the Syncrude joint venture, Oil Sands production rose to an average 305,300 barrels per day or bpd from 245,600 bpd, primarily due to improved operational reliability in the third quarter of 2009. Also, last year production was negatively impacted by unplanned maintenance shutdowns in upgrading and extraction assets, as well as wet weather that impacted mine production.

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