Like their US counterparts, Canadian oil and natural gas firms reported improved earnings from a year ago. These companies capitalized on strong commodity prices in upstream operations and enjoyed healthy margins in downstream operations.
Among the 11 companies OGJ sampled, net income for the third quarter increased 38% while revenues grew by nearly 8%. For the first 9 months of 2003, the group's net income jumped to $10.7 billion from $4.1 billion a year ago.
All results are reported in Canadian dollars.
Company results
Calgary-based Petro-Canada posted one of the larger earnings gains during the third quarter. Net income rose to $304 million from $209 million a year ago.
Ron Brenneman, Petro-Canada's chief executive, commented, "Strategically we made a lot of progress in the third quarter with the decision to consolidate our eastern Canada refining operations and with a number of developments internationally."
The company consolidated its refining operations in Montreal as a step toward improving its long-term downstream profitability. Petro-Canada's downstream operations were profitable for the quarter, overcoming an unplanned shutdown of part of the Mississauga lubricants plant following September's major blackout.
Petro-Canada said that it further enhanced earnings by taking some steps in the international arena. These steps include adding new exploration opportunities in North Africa and advancing developments in the North Sea.
EnCana Corp., also based in Calgary, reported earnings for the quarter of $400 million, up from $204 million in the third quarter of last year.
The company also reported that during the recent quarter, the company's capital investment was $1.85 billion, excluding acquisitions and dispositions, and that it drilled 1,830 net wells.
EnCana's third quarter sales of oil and natural gas liquids was up 7% from the same quarter last year, averaging 252,000 b/d. Gas sales increased 10% to average 3 bcfd.
Through 2003, EnCana president and CEO Gwyn Morgan said, the company has divested assets that have not met its financial return thresholds. This includes its Syncrude interest, which represented 32,000 b/d, or about 4% of EnCana's production.
