Petro-Canada announced today first quarter operating earnings of $111 million ($0.23/share), down 88% from $899 million ($1.86/share) in the first quarter of 2008. First quarter 2009 cash flow from operating activities before changes in non-cash working capital was $702 million ($1.45/share), down 62% from $1,852 million ($3.83/share) in the same quarter of last year. Net losses were $47 million ($(0.10)/share) in the first quarter of 2009, compared with net earnings of $1,076 million ($2.22/share) in the same quarter of 2008.
"A key priority for us during these tough times is to maximize cash flow in order to preserve our strong liquidity," said Ron Brenneman, president and chief executive officer. "Reliable business operations, prudent financial oversight and our cash flow generation capability are helping us weather the downturn."Our East Coast Canada, International and Downstream business units all contributed reasonable cash flow even with lower commodity prices and cracking margins," added Brenneman. "This, combined with a reduction in our 2009 capital program below what we indicated in December, enabled us to maintain strong liquidity through a difficult first quarter business environment."
First quarter production in 2009 averaged 410,000 boe/d net to Petro-Canada, down from 427,000 boe/d net in the same quarter of 2008. Volumes reflected decreased North American Natural Gas, East Coast Canada and International production, partially offset by increased Oil Sands production.
Major Project Milestones
In the first quarter of 2009, Petro-Canada and its partners finished operations on five wells of the up to 12 wells planned in 2009. One well was completed as a gas discovery (L6-7 in the Netherlands sector of the North Sea). This well was started in 2008 but was completed in the first quarter of 2009. One well was completed as an oil discovery (Hobby in the United Kingdom (U.K.) sector of the North Sea). As a result of the discovery, three sidetracks are planned from this wellbore, of which one has been completed so far. The three wells drilled in Alaska (Chandler 1, Wolf Creek 4 and Gubik 4) all encountered natural gas. Drilling operations were completed for the Wolf Creek and Gubik wells so they were plugged and abandoned. The Chandler well was suspended for possible future testing. These wells are part of a multi-season program and the results are being evaluated for incorporation into an overall plan to determine the commerciality of natural gas development in the region.
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