Petro-Canada Posts Strong Q1 Earnings Growth

Petro-Canada on Tuesday announced its first quarter operating earnings from continuing operations adjusted for unusual items of $580 million ($1.17/share), compared with $486 million ($0.95/share) in the first quarter of 2006. First quarter 2007 cash flow from continuing operations was $1,166 million ($2.35/share), compared with $857 million ($1.67/share) in the same quarter of last year. Cash flow is before changes in non-cash working capital.

Net earnings from continuing operations were $590 million ($1.19/share) in the first quarter of 2007, compared with $54 million ($0.11/share) in the same period of 2006. Net earnings include unrealized gains or losses on derivative contracts, and gains or losses on foreign currency translation and disposal of assets.

"We broke through the 400,000 barrel per day mark, consistent with our target of increasing production by 15% in 2007," said Ron Brenneman, president and chief executive officer. "At the same time, we continued to advance our five major projects and saw early exploration success in the North Sea."

Operating Highlights

First quarter production from continuing operations averaged 405,000 boe/d net to Petro-Canada in 2007, up from 355,000 boe/d net in the same quarter of 2006. Higher volumes reflected the addition of North Sea projects (Buzzard, De Ruyter and L5b-C) and higher East Coast Canada and Oil Sands production. This was partially offset by natural declines in the North American Natural Gas business.

In the Downstream, strong North American petroleum product demand and refining margins, combined with solid execution, delivered excellent first quarter results.

"The Downstream had a very good quarter," said Brenneman. "We've been improving the fundamentals of this business for several years so that, when the business environment is strong, it shows up on our bottom line."

Outlook

Operational Updates

  • Buzzard on plan, ramping up to full production by mid-2007
  • Lubricants plant planned catalyst changeout to be completed in the second quarter of 2007
  • Terra Nova 10-day maintenance turnaround scheduled for the second quarter of 2007
  • Syncrude Coker 8-3 maintenance turnaround of about 30 days planned for the second quarter of 2007
  • White Rose planned 14-day maintenance turnaround to be completed in the third quarter of 2007

Major Project Milestones

  • Edmonton refinery conversion project construction on track for startup in the third quarter of 2008
  • Montreal coker investment decision expected in the fourth quarter of 2007
  • Syria gas development front-end engineering and design (FEED) to be completed early in 2008
  • MacKay River expansion regulatory decision anticipated in the third quarter of 2007
  • Fort Hills design basis available in July 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.

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