Canadian oil and gas companies large and small reported strong first quarter financial results, based primarily on high natural gas prices and improved refining margins.
All funds are in Canadian dollars, and all firms cited in this article are Calgary-based, unless noted otherwise.
Integrated firms
Shell Canada Ltd. reported net earnings of $354 million compared with net earnings of $168 million for the same period in 2000.
Shell said cash flow from operations for first quarter 2001 was $489 million, up from $231 million for the same period in 2000.
"Exceptional market conditions and a strong operating performance allowed us to achieve record quarterly operating results," Shell Canada CEO and Pres. Tim Faithfull said.
Imperial Oil Ltd., Toronto, reported a 42% increase in first quarter profits to $382 million, compared with $269 million for the same period a year ago.
Imperial, 70% owned by ExxonMobil Corp., said revenue increased 16% in the first quarter to $4.72 billion from $4.07 billion in first quarter 2000.
Imperial CEO and Pres. Bob Peterson said first quarter results were excellent but noted that performance for the balance of the year depends on market conditions beyond the company's control.
Peterson said he hopes the strong performance will continue but added, "I have been in this business long enough to know I've never got that right."
Petro-Canada reported an increase in first quarter earnings to $358 million from $19 million for the same period in 2000. Revenue was $2.48 billion, up from $2.09 billion in first quarter 2000.
The company attributed gains to high oil and gas prices and strong margins in its service station and refinery operations.
CEO and Pres. Ron Brenneman said product demand remains surprisingly strong despite some reports of economic slowdowns. He said that energy consumption remains strong and gasoline prices are expected to remain high this summer.
"I don't think we are talking about shortages. I think it will show up in prices at the pump," Bren- neman said.
Husky Energy Inc. reported a sixfold increase in first quarter 2001 earnings to $242 million compared with $39 million in first quarter 2000.
The company said first quarter cash flow increased to $620 million from $191 million in first quarter 2000.
Husky attributed the increases to higher commodity prices; increased production volumes, including the August 2000 acquisition of Renaissance Energy Ltd.; and improved margins from midstream and downstream business, including heavy oil upgrading.
Production in the first quarter was 269,700 boe/d, up 112% over first quarter 2000.
Gulf Canada Resources Ltd. reported first quarter earnings of $140 million, almost equal to total 2000 earnings of $148 million.
Cash generation of $517 million in the first quarter was up more than 170% over the first quarter 2000 and equaled almost half of total cash generation in 2000. Pres. and CEO Dick Auchinleck said Gulf's financial results continue to outperform the improvement in commodity prices.
"These are excellent results and demonstrate that our new organization hasn't missed a beat while integrating the Crestar [Energy Inc.] teams and assets. In an exceptionally busy and successful drilling program in western Canada, we have tied in by the end of March over 13,000 boe/d of new production," Auchinleck said.
E&P firms
Anderson Exploration Ltd. said profits increased more than fourfold to $200 million in the second quarter. The company, an active explorer in western Canada and the Arctic, said cash flow rose to $473 million, vs. $156 million a year ago.
Pres. J.C. Anderson said the results are the eighth consecutive record quarter for cash flow and earnings. The company reported average natural gas sales of 744 MMcfd in the second quarter, up 32% from the same period in 2000. Liquids production rose 67% to 62,650 b/d, following the acquisition of Ulster Petroleums Ltd. in 2000 and the recent takeover of Numac Energy Inc.
Anderson is selling a block of oil and gas properties in western Canada with production of about 6,500 b/d of oil and 6.6 MMcfd of gas now that the takeovers are complete. Anderson said he expects natural gas prices to strengthen during the summer.
Penn West Petroleum Ltd. reported that first quarter revenues more than doubled over the same period in 2000 to $365.7 million. Cash flow from operations increased 141% to $226.2 million, and net income in the first quarter increased to $104.2 million. Net income for all of 2000 was $222.5 million.
Talisman Energy Inc. reported a record first quarter profit of $346 million vs. $206 million in the same period last year and a cash flow increase to $764 million vs. $571 million in first quarter 2000. CEO and Pres. Jim Buckee forecast that cash flow will reach $3 billion for 2001 if commodity prices remain high. He also said the company is increasing its capital spending in 2001 to $2.8 billion. Talisman had first quarter liquids production of 240,550 b/d and gas production of 993 MMcfd vs. 238,572 b/d and 1.025 bcfd in first quarter 2000.