Suncor Energy (SU 0.25%) is nothing if not ambitious. At a time when other oil companies were reeling from depressed oil prices, Suncor Energy saw an opportunity. The company embarked on a major shopping spree in the Canadian oil sands over the past year in an effort to expand its production potential while improving its balance sheet. Here's exactly what those efforts entailed, how they fit into Suncor's long-term strategy, and how that strategy shows that the shopping spree might not be over just yet.

Suncor's deal-making

Suncor's mission to expand its oil-sands positions over the past year has revolved around three main deals. First, last September, Suncor purchased a 10% share of the Fort Hills oil sands project for roughly $237 million from Total SA (TTE 0.58%), bringing its interests in the venture to a majority share of 50.8%. Fort Hills is expected to produce 180,000 barrels of oil equivalent per day (BOE/D) when it comes online in 2017.

Perhaps feeling it needed to flex its oil-sands muscles a bit more, Suncor then agreed in January to purchase 100% of the shares of Canadian Oil Sands for $5 billion. Since that purchase gave it only a 48% interest in the Syncrude oil sands venture, Suncor quickly followed that acquisition up by purchasing an additional 5% stake in Syncrude from Murphy Oil for $716 million. In all, Suncor spent nearly $6 billion to acquire majority shares of two of the largest operations in the oil-sands region.

With $2.37 billion in cash on hand and an additional $5.2 billion in credit lines as of the end of the first quarter, Suncor had the flexibility to largely fund these acquisitions. But not wanting to completely squander its liquidity, Suncor used a number of options to grow its oil sands assets.

For the $5 billion Canadian Oil Sands deal, for example, it used an all-stock offer and the assumption of $2 billion of the company's debt. Further, in June, it completed a stock issuance that raised roughly $2.2 billion. Suncor used that money to fund its Murphy Oil acquisition, pay off debt, and maintain enough liquidity to pursue additional strategic acquisitions.

In sum, that made for a busy few months.

The long-term strategy

Shockingly enough, though, that wasn't even all of Suncor's significant financial activity this year, as it recently agreed to buy back $1.5 billion in long-term notes. This signifies Suncor CEO Steve Williams' delicate balancing act of continuing to expand the company's core assets while further strengthening its balance sheet.

According to Williams, Suncor is committed "to profitable growth and creating value for shareholders through strategic acquisitions," and he says that "we continue to focus on capital discipline as we evaluate value-added opportunities that are a good fit with our existing core business." A Suncor spokesman expanded on this point by saying, "Repaying debt increases balance-sheet flexibility."

Balance-sheet flexibility is a critical aspect of Suncor's long-term strategy, which calls to expand its production from 600,000 BOE/D at the end of 2015 to 800,000 by 2019. The goal is to expand this production while lowering operating costs, which it believes it can achieve by expanding its current positions. Since the majority of that production will come from oil sands, taking majority working interests in Syncrude and Fort Hills, which hold 350,000 BOE/D and 180,000 BOE/D of production potential respectively, it is well on its way to reaching and eclipsing its goal.

On top of that, Suncor plans to remain an integrated oil company, maintaining a diversified portfolio with average 2016 throughput capacity at its refineries of about 440,000 barrels per day and product sales at its retail locations of 550,000 barrels per day.

What should you expect next?

All the indicators suggest Suncor is only getting started. By cleaning up its balance sheet for flexibility and even suggesting that the stock issuance was in part to pursue strategic opportunities, Suncor appears to be gearing up to make further acquisitions.

The company has remained relatively silent on what those plans may be, but analysts and sources have identified a number of possibilities. One suggestion that makes a lot of sense is to increase its interest in Fort Hills by buying out some of the venture's partners. Other possibilities include expanding its positions in Eastern Canada or the North Sea. A Reuters source mentions Royal Dutch Shell's 75,000-barrels-per-day Corunna refinery as a possibility. While these future investments remain speculative, what is almost certain is that Suncor will make investments that will drive high future returns and build on or consolidate its core business.

This is where it will pay off to remain vigilant when looking at Suncor's activity. Remember, this remains a balancing act, as Williams expands Suncor's production potential while keeping debt within Suncor's target debt-to-capitalization range of 20% to 30%. At the end of the first quarter, that ratio was over 29%, with total debt of over $13 billion. This is relatively manageable, but if oil prices plunge again -- or even fail to rise further -- and cash flows remain low, it could be exposing itself to financial troubles.

Assuming oil prices don't plummet, though, Suncor has created a long-term strategy to boost production and increase its returns, which is exactly what investors should be looking for in a stock.