With Friday's third-quarter earnings release and conference call, Suncor Energy SU provided some insight into its capital-investment plans after the merger with Petro-Canada. While exactly what projects the company will prioritize remains somewhat unclear, we do know that asset divestitures of $2 billion-$4 billion should take place throughout 2010, reducing production by about 10%. The divestitures will focus on natural gas assets in Western Canada, the U.S. Rockies, Trinidad and Tobago, and small, nonstrategic stakes in the North Sea. Natural gas production will serve primarily as a hedge for gas used in operations, not a growth part of the business, as Suncor returns to an oil-sands-dominated energy company. Suncor may also use the proceeds to pay down debt. While we previously suspected the company may sell riskier asset in Syria and Libya, that may not necessarily be the case. Management expressed a desire to complete the Syrian project and bring it into production before making any decisions. Libya may be kept because of its oil-producing assets, despite the risk. Further details should be available next week. Management plans to disclose its 2010 capital program and strategic business plan in a conference call tentatively scheduled for next Friday.

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