Petro-Canada Delivers Solid Third Quarter

Petro-Canada announced third quarter operating earnings from continuing operations adjusted for unusual items of $564 million ($1.13/share), compared with $638 million ($1.23/share) in the third quarter of 2005. Third quarter 2006 cash flow from continuing operations was $1,085 million ($2.17/share), compared with $1,001 million ($1.93/share) in the same quarter of last year. Cash flow is before changes in non-cash working capital.

Net earnings were $678 million ($1.36/share) in the third quarter of 2006, compared with $614 million ($1.19/share) in the same period of 2005. Net earnings include unrealized gains or losses on derivative contracts, and gains or losses on foreign currency translation and disposal of assets.

"Our Downstream and Oil Sands businesses had their strongest quarters ever. Solid operations allowed us to capitalize on the business environment," said Ron Brenneman, president and chief executive officer. "At the same time, our upstream production is building with Terra Nova about to restart, the Syncrude expansion up and running, and new production coming on-stream from the North Sea."

Third Quarter Results

(millions of Canadian                Three months ended  Nine months ended
 dollars, except per share                 September 30,      September 30,
 and share amounts)                       2006     2005      2006     2005
Consolidated Results
Operating earnings adjusted
 for unusual items (1)                 $   564  $   659   $ 1,542  $ 1,651
Net earnings                               678      614     1,356    1,077
Cash flow                              $ 1,085  $ 1,063   $ 2,713  $ 2,851
Results from Continuing
 Operations (2)
Operating earnings from
 continuing operations adjusted
 for unusual items (1)                 $   564  $   638   $ 1,524  $ 1,599
 - $/share                                1.13     1.23      3.01     3.08
Net earnings from
 continuing operations                     678      593     1,204    1,025
 - $/share                                1.36     1.14      2.38     1.97
Cash flow from continuing
 operations                              1,085    1,001     2,696    2,671
 - $/share                                2.17     1.93      5.33     5.14
Dividends - $/share                       0.10     0.08      0.30     0.23
Share buyback program                      135      115       961      257
 - millions of shares                      2.9      2.4      18.8      6.3
Capital expenditures for
 continuing operations                 $   777  $   774   $ 2,319  $ 2,746
Weighted-average common shares
 outstanding (millions of shares)        500.1    518.1     505.9    519.2
(1) Operating earnings adjusted for unusual items (which represent net
    earnings, excluding gains or losses on foreign currency translation
    and on disposal of assets and the unrealized gains or losses associated
    with the Buzzard derivative contracts), are used by the Company to
    evaluate operating performance.
(2) On January 31, 2006, Petro-Canada closed the sale of its Syrian
    producing assets. These assets and associated results are reported as
    discontinued operations and are excluded from continuing operations.

Operating Highlights

Third quarter production from continuing operations averaged 333,000 barrels of oil equivalent/day (boe/d) in 2006, down from 353,000 boe/d in the same quarter of 2005. The shutdown of Terra Nova and natural declines in the North Sea and in North American Natural Gas were partially offset by the addition of White Rose production and higher Oil Sands volumes.

"This quarter, we completed the bulk of the regulatory and reliability work on the Terra Nova FPSO, enabling us to improve performance going forward," said Mr. Brenneman. "In the North Sea, we achieved first oil at De Ruyter and are in the final stages of bringing on production from the L5b-C and Buzzard projects."

In the Downstream, solid reliability at the Edmonton and Montreal refineries allowed the Company to benefit from the business environment and deliver record operating earnings. In Oil Sands, strong prices combined with increased production delivered best ever operating earnings.


                                     Three months ended  Nine months ended
                                           September 30,      September 30,
                                          2006     2005      2006     2005
Upstream - Consolidated (1)
 Production before royalties
  Crude oil and natural gas liquids
   (NGL) production, net
   (thousands of barrels/day, Mb/d)      211.7    285.1     220.7    284.4
  Natural gas production, net,
   excluding injectants (millions
   of cubic feet/day, MMcf/d)              725      821       746      839
  Total production (thousands of
   barrels of oil equivalent/day,
   Mboe/d) (2)                             333      422       345      424
 Average realized prices
  Crude oil and NGL ($/barrel, $/bbl)    70.76    68.93     69.40    60.49
  Natural gas ($/thousand cubic
   feet, $/Mcf)                           6.06     8.01      7.07     7.26
Upstream - Continuing Operations
 Production from continuing operations
  before royalties
  Crude oil and NGL production,
   net (Mb/d)                            211.7    219.9     213.9    217.3
  Natural gas production, net,
   excluding injectants (MMcf/d)           725      796       743      813
  Total production (Mboe/d) (2)            333      353       338      353
 Average realized prices from
  continuing operations
  Crude oil and NGL ($/bbl)              70.76    68.93     69.33    60.42
  Natural gas ($/Mcf)                     6.06     8.03      7.07     7.27
 Petroleum product sales (thousands
  of cubic metres/day, m3/d)              54.4     53.6      52.0     52.8
 Average refinery utilization (%) (3)      101       98        93       95
 Downstream earnings from operations
  after-tax (cents/litre) (4)              3.5      1.9       2.7      2.0
(1) Includes discontinued operations.
(2) Total production includes natural gas converted at six Mcf of natural
    gas for one barrel (bbl) of oil.
(3) Includes Oakville capacity pro-rated to reflect partial operation of
    Oakville refinery prior to permanent closure, effective April 11, 2005.
(4) Before additional depreciation and other charges related to the closure
    of the Oakville refinery.


Operational Updates

- Terra Nova back on-stream in the fourth quarter

- Syncrude Stage III expansion ramping up

Strategic Milestones

- Achieve first production from new North Sea developments (L5b-C and Buzzard) by year end

- Submit commercial application for Sturgeon Upgrader late in 2006

- Receive regulatory decision on Gros-Cacouna re-gasification project early in 2007

- Complete Fort Hills design basis memorandum in the first half of 2007

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. The Company creates value by responsibly developing energy resources and providing world class petroleum products and services. Petro-Canada is proud to be a National Partner to the Vancouver 2010 Olympic and Paralympic Winter Games. Petro-Canada's common shares trade on the Toronto Stock Exchange (TSX) under the symbol PCA and on the New York Stock Exchange (NYSE) under the symbol PCZ.


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