Suncor Energy (SU -1.78%) will release its second-quarter earnings on July 27, and if the past three months have been any indication, it should be loaded with interesting insights. Here are a few of the highlights you should focus on if you intend to use the report to inform your long-term investments in the company.

Production costs and forecasts

Suncor has been on a clear mission in recent months to increase its oil production while lowering costs. In its first-quarter earnings, it reported cash operating costs per barrel in the oil sands region at just over $18, down from $28.40 in 2013. These cost savings, resulting from efficiencies and production increases, will be critical as Suncor further expands its oil-sands positions.

Also in the first quarter, Suncor closed its acquisition of Canadian Oil Sands, and in the second quarter, it completed its 5% purchase of the Syncrude oil venture from Murphy Oil and continued to develop its Fort Hills project. Primarily through these moves, Suncor is hoping to increase production to 800,000 barrels of oil equivalent per day (BOE/D) by 2019 from its 600,000 BOE/D at the end of 2015.

From an investor's perspective, it'd be nice to see if these forecasts have changed, which seems possible considering there are reports that Suncor is considering additional acquisitions. That information, could help you determine how the company is planning for future growth.

Debt and cash flow

Because of depressed crude prices and lower refining crack spreads, Suncor's first-quarter cash flow decreased nearly 50% from a quarter earlier, dropping to $523 million from $992 million. That makes two quarters in a row that operating cash flows could not cover capital expenditures, which in the first quarter were $1.085 billion and led to negative free cash flow of $678 million.

Despite the weak cash flow, Suncor managed to keep its debt-to-capitalization ratio under its 30% target in the first quarter and has made significant moves in the second quarter to reduce its debt further. In June, in addition to continued cost-savings measures, the company made a $2.5 billion stock offering, with the proceeds used to pay down debt while simultaneously funding the 5% purchase of the Syncrude oil venture from Murphy Oil. This comes after the company added $2.7 billion in debt in the first quarter to help pay for its $6 billion shopping spree over the past year.

It would be reassuring if Suncor can show that it has further reduced its debt, increased its cash flows, and maintained ample liquidity for future investments.  In addition to the large stock offering, the company also bought back $1.5 billion in long-term notes, which should help keep its debt-to-capitalization on target. Its cash flows should also benefit from an increase in oil prices during the quarter.  Even though it has had a relatively weak couple of quarters from an earnings and cash flow perspective, we know it is strengthening its production potential, so further cleaning up its balance sheet would create long-term confidence.  

Impacts of the wildfires

All of its numbers could be jaded because of the massive Alberta wildfires. Suncor had to shut off production at several of its facilities for over a month, which contributed to revised 2016 production numbers from a maximum daily average of 665,000 barrels per day to a maximum daily average of 620,000. The company also expects to take a massive hit from the lost production, to the tune of $778 million. While that number should be somewhat spread throughout its 2016 earnings, expect a large portion to be reported in its second-quarter earnings.

Investor takeaway

Suncor's earnings statement should be illuminating, but it very well could be skewed because of the impacts of the wildfires and not representative of what to expect in the second half. Pay close attention to production forecasts as well as the directions of its debt and cash flows. Those will likely be better indicators for the remainder of 2016 and for its long-term growth potential.