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 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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