Petro-Canada Sees 15% Jump in Production

Petro-Canada's Board of Directors approved a capital and exploration expenditure program totaling $4.1 billion for 2007, an increase of 15% compared with the program in 2006.

The 2007 capital program includes $2.6 billion directed to growth projects, exploration and new venture developments, a 37% increase in this category compared with 2006. Petro-Canada expects to invest $1 billion to replace reserves in core areas, $400 million to enhance existing assets and to improve profitability in the base business, and $100 million to comply with new regulations. The 2007 capital expenditure program is expected to be funded primarily from cash flow.

"Next year is an important year for us with a strong boost in upstream production growth," said Ron Brenneman, president and chief executive officer. "Our upstream production forecast for 2007 includes the full year impact of having big projects like White Rose and the Syncrude expansion on-stream, as well as the startup of Buzzard."

Petro-Canada's upstream production is expected to increase significantly in 2007 and be in the range of 390,000 barrels of oil equivalent per day (boe/d) to 420,000 boe/d. The planned growth in 2007 production is largely due to the ramp up of projects such as Buzzard, De Ruyter and L5b-C in the North Sea, the full year impact of production from the Syncrude Stage III expansion and the return of Terra Nova. Production for the full year of 2006 is expected to be at the low end of the range of 345,000 boe/d to 360,000 boe/d, in line with previous guidance.

"Our plans call for one large project coming on-stream in each of the next several years," said Brenneman. "Many of these are the type of long-life projects we've been deliberately adding to our portfolio during the last few years. So we're building a strong base of sustainable earnings and cash flow."

As the Company looks beyond 2007, annual capital programs are expected to be in the range of $4 billion to $5 billion for the next few years, reflecting investment in the next wave of profitable growth projects. Based on the Company's view of the business environment, it is anticipated that funding of the capital expenditure programs will be from cash flow and by using balance sheet strength. It is expected that debt levels and ratios will remain well within target ranges.

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.