Following its megamerger with Petro-Canada, Suncor (NYSE: SU) found itself with some loose ends to tie up. The company had too much debt and too many non-core assets. The obvious solution was to embark on a series of divestitures, which the Canadian firm completed ahead of schedule in 2010. Buyers included Noble Energy (NYSE: NBL), which snapped up some prime DJ Basin leasehold, and Centrica, which took the firm's Trinidad and Tobago assets off its hands.

Once the final chunk of cash comes in from a sale of U.K. North Sea assets, Suncor will have collected $3.5 billion. The company has made good on its word regarding debt reduction, bringing net debt down from $13.4 billion to $11.1 billion at year's end. With a goal of staying under two times debt to cash flow (it's currently at 1.7 times), Suncor's balance sheet is now back in the comfort zone. The firm will be even better fortified upon the closing of its proposed transaction with Total (NYSE: TOT), which will bring in another $1.75 billion in up-front cash.

This financial strength wouldn't add up to much with operations on the fritz, but Suncor is also looking good on that front. In the fourth quarter, the firm cranked out record oil sands production of 326,000 barrels per day. Cash costs tracked a bit higher, but the firm's year-ahead guidance of $39 to $43 per barrel suggests that costs shouldn't run too much higher than 2010 levels.

Two factors pushing this cost guidance up are a major "turnaround" (i.e., maintenance job) at one of Suncor's upgrading facilities, as well as higher expected natural gas prices. Suncor is a significant consumer of natural gas in its oil sands operations. The firm is somewhat hedged through its production, though these volumes are dropping as Suncor divests natural gas assets that don't meet stand-alone profitability requirements.

By the end of 2011, Suncor says its production will be more than 90% oil-weighted. It also clarified on its conference call that it has no crude hedges on the books for 2011. Suncor therefore looks like a strong bet for those bullish on black gold this year.

There are several risks to keep in mind, though. The midyear turnaround is apparently the largest in oil sands history. The company has a strong record of delivering these projects on budget and on time, but there could be complications. Suncor is rolling out a companywide safety management system that draws on best-in-class practices from the likes of ExxonMobil (NYSE: XOM) and DuPont (NYSE: DD), which is fantastic to see, but accidents can and do happen (see the incident in December 2009 for an example). There are also regulatory risks, wherein Suncor may once again run afoul of emissions limits or encounter environmental opposition to its expansion plans.

Then, of course, there's the risk that oil prices tank. At the moment that seems like a remote prospect, but just be aware that Suncor says it needs $80 to $85 oil to internally fund its 10-year growth plan.