Highlights CALGARY, Jan. 26 /PRNewswire-FirstCall/ -- Petro-Canada
announced today fourth quarter operating earnings adjusted for
unusual items of $714 million ($1.38/share), up 58% from $451
million ($0.87/share) in the same quarter of 2004. Fourth quarter
2005 cash flow was $1,181 million ($2.29/share), compared with
$1,007 million ($1.93/share) in the same quarter of last year. Cash
flow is before changes in non-cash working capital. Net earnings
for the fourth quarter in 2005 were $714 million ($1.38/share),
compared with $441 million ($0.85/share) in the same period of
2004. Net earnings include unrealized gains or losses on derivative
contracts, gains or losses on foreign currency translation and
disposal of assets. "We closed the year with record earnings and
cash flow for the quarter and the year. We also strengthened our
portfolio by adding long life projects like Fort Hills and
divesting mature assets in Syria," said Ron Brenneman, president
and chief executive officer. During the quarter, Petro-Canada
reached an agreement to sell the Company's producing assets in
Syria. These assets and associated results are reported as
discontinued operations and excluded from continuing operations. As
a result, in the fourth quarter of 2005, operating earnings from
continuing operations adjusted for unusual items were $666 million
($1.29/share), compared with $444 million ($0.85/share) in the
fourth quarter of 2004. Net earnings from continuing operations for
the fourth quarter in 2005 were $668 million ($1.29/share),
compared with $434 million ($0.83/share) in the same period of
2004. Fourth quarter 2005 cash flow from continuing operating
activities was $1,116 million ($2.16/share), compared with $966
million ($1.85/share) in the same quarter of last year. Fourth
Quarter Results
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Three months ended Year ended ($ millions, except per December 31,
December 31, share amounts)(1) 2005 2004 2005 2004
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Consolidated Results Operating earnings adjusted for unusual
items(2) $ 714 $ 451 $ 2,365 $ 1,901 Net earnings 714 441 1,791
1,757 Cash flow $ 1,181 $ 1,007 $ 4,032 $ 3,629
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Results From Continuing Operations Operating earnings from
continuing operations adjusted for unusual items(2) $ 666 $ 444 $
2,265 $ 1,842 - $/share 1.29 0.85 4.37 3.48 Net earnings from
continuing operations 668 434 1,693 1,698 - $/share 1.29 0.83 3.27
3.21 Cash flow from continuing operations 1,116 966 3,787 3,425 -
$/share 2.16 1.85 7.31 6.47 Dividends - $/share 0.10 0.07 0.33 0.30
Share buyback program 89 159 346 447 - millions of shares 2.0 4.8
8.3 13.7 Capital expenditures for continuing operations $ 884 $ 938
$ 3,630 $ 4,573 Weighted average common shares outstanding
(millions of shares) 516.2 521.2 518.4 529.3
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(1) Per share amounts are quoted on a post-stock dividend basis.
(2) Operating earnings adjusted for unusual items (which represent
net earnings, excluding gains or losses on foreign currency
translation and on disposal of assets, the unrealized gains or
losses associated with the Buzzard derivative contracts and,
adjusted for unusual items) is used by the Company to evaluate
operating performance. Operating Highlights Fourth quarter
production was 426,200 barrels of oil equivalent/day (boe/d)
(continuing operations 359,800 boe/d) in 2005, compared with
437,200 boe/d (continuing operations 362,500 boe/d) in the same
quarter of 2004. The decrease in production reflects lower volumes
from Western Canada and Syria. This was partially offset by higher
volumes in East Coast Oil from improved performance at Terra Nova,
strong reliability at Hibernia and first oil at White Rose. In
2005, production of crude oil, natural gas liquids (NGL) and
natural gas averaged 424,700 boe/d (continuing operations 354,600
boe/d), in line with guidance. Petro-Canada's upstream average
production from continuing operations is expected to increase and
be in the range of 365,000 to 390,000 boe/d in 2006. The expected
growth in 2006 production is largely due to additional volumes from
White Rose, the Syncrude Stage III expansion, the De Ruyter
startup, and a new well pad at MacKay River. "We are at a very
positive inflection point. Production from continuing operations is
expected to grow 8% to 11% per year on average over the next three
years," said Mr. Brenneman. "At the same time, our Downstream
investments are shifting to growth with the completion of
regulatory projects." During the fourth quarter, the Downstream
continued to deliver strong reliability at the Montreal and
Edmonton refineries, with improved safety at the Edmonton refinery
surpassing the four-million-hour mark without a lost- time injury.
In Retail, convenience store sales continued to grow and were up
more than 15% compared with the same period last year. In
Lubricants, the proportion of sales from high margin products
increased in the fourth quarter of 2005, compared to the same
period in 2004 and approached the annual target of 75%.
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Three months ended Year ended December 31, December 31, 2005 2004
2005 2004
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Upstream - Consolidated Production before royalties Crude oil and
natural gas liquids production, net (thousands of barrels/ day,
Mb/d) 292.3 288.7 286.4 305.7 Natural gas production, net,
excluding injectants (millions of cubic feet/day, MMcf/d) 803 891
831 873 Total production (1) (thousands of barrels of oil
equivalent/ day, Mboe/d) 426 437 425 451 Average realized prices
Crude oil and natural gas liquids ($/barrel, $/bbl) 61.27 48.41
60.79 46.89 Natural gas ($/thousand cubic feet, $/Mcf) 11.27 6.64
8.16 6.41
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Upstream - Continuing Operations Production from continuing
operations before royalties Crude oil and natural gas liquids
production, net (Mb/d) 229.9 217.9 220.5 230.0 Natural gas
production, net, excluding injectants (MMcf/d) 779 868 806 852
Total production (1) (Mboe/d) 360 362 355 372 Average realized
prices from continuing operations Crude oil and natural gas liquids
($/bbl) 60.50 48.99 60.48 46.95 Natural gas ($/Mcf) 11.40 6.69 8.21
6.45
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Downstream Petroleum product sales (thousands of cubic metres,
m3/d) 52.9 55.4 52.8 56.6 Average refinery utilization (2) (%) 99
96 96 98 Downstream earnings from operations after-tax (3)
(cents/litre) 2.2 2.0 2.1 1.7
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(1) Total production includes natural gas converted at six Mcf of
gas for one bbl of oil. (2) Includes Oakville capacity pro-rated to
reflect partial operation of Oakville refinery prior to permanent
closure, effective April 11, 2005. (3) Before additional
depreciation and other charges related to the closure of the
Oakville refinery. Outlook Operations Update - Fire-related damage
experienced in January 2006 will reduce lubricants production by
almost half for approximately two months - Edmonton refinery
turnaround is scheduled for the spring of 2006 - The Edmonton
diesel desulphurization project remains on schedule and on budget
for June project completion - Terra Nova 70- to 90-day turnaround,
starting in July 2006 Strategic Milestones - Further definition of
Fort Hills development plans - Complete the sale of Syria producing
assets and direct the proceeds to the share buyback program -
Syncrude Stage III expansion on-stream in mid-2006 Petro-Canada is
one of Canada's largest oil and gas companies, operating in both
the upstream and downstream sectors of the industry in Canada and
internationally. Its common shares trade on the Toronto Stock
Exchange under the symbol PCA and on the New York Stock Exchange
under the symbol PCZ. The full text of Petro-Canada's fourth
quarter release, including the Management's Discussion and
Analysis, can be accessed on Petro-Canada's web site at
http://www.petro-canada.ca/eng/investor/9259.htm, and will be
available through SEDAR at http://www.sedar.com/. Petro-Canada will
hold a conference call to discuss these results with investors on
Thursday, January 26, 2006 at 9:00 a.m. Eastern Time. To
participate, please call 1-866-898-9626 or 416-340-2216 at 8:55
a.m. Media are invited to listen to the call by dialing
1-866-540-8136 or 416-340-8010 and are invited to ask questions at
the end of the call. Those who are unable to listen to the call
live may listen to a recording of it approximately one hour after
its completion by calling 1-800-408-3053 or 416-695-5800 (passcode
number 3168271). A live audio broadcast of the conference call will
be available on Petro-Canada's website at
http://www.petro-canada.ca/eng/investor/9259.htm on January 26 at
9:00 a.m. Eastern Time. Approximately one hour after the call, a
recording of the call will be available on the website. Non-GAAP
Measures Cash flow, which is expressed as cash flow from operating
activities before changes in non-cash working capital, is used by
the Company to analyse operating performance, leverage and
liquidity. Operating earnings, which represent net earnings
excluding gains or losses on foreign currency translation, disposal
of assets and unrealized gains or losses on the mark-to- market of
the derivative contracts associated with the Buzzard acquisition,
are used by the Company to evaluate operating performance. Cash
flow and operating earnings do not have a standardized meaning
prescribed by Canadian generally accepted accounting principles
(GAAP) and, therefore, may not be comparable with the calculations
of similar measures for other companies. For reconciliations of the
cash flow and operating earnings amounts to the associated GAAP
measure, refer to the tables on page 25 of the fourth quarter
Management's Discussion and Analysis. Legal Notice -
Forward-Looking Information This quarterly release contains
forward-looking statements. Such statements are generally
identifiable by the terminology used, such as "plan," "anticipate,"
"intend," "expect," "estimate," "budget" or other similar wording.
Forward-looking statements include, but are not limited to,
references to future capital and other expenditures, drilling
plans, construction activities, refinery turnaround, the submission
of development plans, seismic activity, refining margins, oil and
gas production levels and the sources of growth thereof, results of
exploration activities and dates by which certain areas may be
developed or may come on-stream, retail throughputs, pre-production
and operating costs, reserves and resources estimates, reserves
life, natural gas export capacity and environmental matters. These
forward-looking statements are subject to known and unknown risks
and uncertainties and other factors which may cause actual results,
levels of activity and achievements to differ materially from those
expressed or implied by such statements. Such factors include, but
are not limited to: general economic, market and business
conditions; industry capacity; competitive action by other
companies; fluctuations in oil and gas prices; refining and
marketing margins; the ability to produce and transport crude oil
and natural gas to markets; the effects of weather conditions; the
results of exploration and development drilling and related
activities; fluctuation in interest rates and foreign currency
exchange rates; the ability of suppliers to meet commitments;
actions by governmental authorities including increases in taxes;
decisions or approvals of administrative tribunals; changes in
environmental and other regulations; risks attendant with oil and
gas operations; expected rates of return; and other factors, many
of which are beyond the control of Petro-Canada. More specifically,
production may be affected by such factors as exploration success,
startup timing and success, facility reliability, planned and
unplanned gas plant shut downs, success of restarts following
turnarounds, reservoir performance and natural decline rates, water
handling and production from coal bed methane wells, and drilling
progress. Capital expenditures may be affected by cost pressures
associated with new capital projects, including labor and material
supply, project management, drilling rig rates and availability,
and seismic costs. These factors are discussed in greater detail in
filings made by Petro-Canada with the Canadian provincial
securities commissions and the United States Securities and
Exchange Commission. Readers are cautioned that the foregoing list
of important factors affecting forward-looking statements is not
exhaustive. Furthermore, the forward-looking statements contained
in this quarterly release are made as of the date of this release
and except as required by applicable law, Petro-Canada does not
undertake any obligation to update publicly or to revise any of the
included forward-looking statements, whether as a result of new
information, future events or otherwise. The forward-looking
statements contained in this release are expressly qualified by
this cautionary statement. DATASOURCE: Petro-Canada CONTACT:
INVESTOR AND ANALYST INQUIRIES: Gordon Ritchie, Investor Relations,
(403) 296-7691; Pamela Tisdale, Investor Relations, (403) 296-4423;
MEDIA AND GENERAL INQUIRIES: Michelle Harries, Corporate
Communications, (403) 296-3648, http://www.petro-canada.ca/; To
request a free copy of this organization's annual report, please go
to http://www.newswire.ca/ and click on Tools for Investors.
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