Suncor Energy Inc. shares rose to an almost 16-year high after the oilsands producer accelerated plans to ramp up share buybacks, marking a win for activist investor Elliott Investment Management LP.   

Canada’s second-largest oil producer by market value said it boosted spending on share repurchases to 75 per cent of its free funds flow this quarter. Buybacks will ramp up to essentially all of its free funds when it cuts net debt to C$8 billion ($5.9 billion), discarding its previous target of C$5 billion. Suncor has just under C$9 billion in debt currently.

The stock rose as much as 3.2 per cent to hit C$56.30 in Toronto, the highest intraday price since September 2008. The shares are up about 32 per cent this year, the fourth-best performance in the 41-company S&P/TSX Energy Index. 

Suncor’s gains mark a major turnaround for a company that was a laggard of the Canadian oil industry two years ago, beset by a string of worker deaths. The poor performance prompted activist investor Elliott to demand a major shakeup of the company and ultimately resulted in the appointment of former Exxon Mobil Corp. executive Rich Kruger as CEO last year.

When Elliott launched its campaign two years ago, it held a 3.4 per cent economic interest in Suncor. The activist now holds a 4.1 per cent direct stake that makes it the company’s fourth-largest investor, according to data compiled by Bloomberg.

Elliott has increased its stake in Suncor because of the positive results on its performance and safety and still believes the stock has the potential for significant gain, according to a person familiar with the matter.

The shares are up about 33 per cent since Elliott revealed its stake. That’s in line with the performance of rival Canadian Natural Resources Ltd. over that period and tops that of Cenovus Energy Inc.

Suncor has halted worker fatalities since the appointment of Kruger, who previously led Exxon’s Imperial Oil Ltd. Canadian division and came out of retirement to take the CEO position. He also has cut jobs to trim expenses and struck a C$1.47 billion deal to buy TotalEnergies SE’s stake in an oil-sands mine to secure more bitumen supplies for the upgraders at its Base Plant.

Kruger said Tuesday that Suncor expects to reach its new debt target — which reflects the company’s confidence in its momentum — by the middle of next year, or possibly by the end of this year. The company also announced that it would add C$3.3 billion to free funds flow by 2026 and would lower its breakeven oil price level by $10 a barrel — to $43 a barrel — in the same period.