Petro-Canada Builds its Portfolio for Long-Term Growth & Returns

Petro-Canada reports first quarter earnings from operations adjusted for one-time and unusual items of $456 million ($1.75 per share), down 6% from $486 million ($1.83 per share) in the same quarter of 2004. First quarter 2005 cash flow was $854 million ($3.28 per share), compared with $897 million ($3.37 per share) in the same quarter of last year. Cash flow is before changes in non-cash working capital. Strong operational performance in the North American Natural Gas, International and Downstream businesses was more than offset by lower production at Terra Nova and Syncrude, and a continuation of low realized prices for bitumen.

"Results this quarter continued to demonstrate the strength of Petro-Canada's balanced portfolio, which delivered solid performance despite lower production at Terra Nova and Syncrude," said Ron Brenneman, President and Chief Executive Officer.

Net earnings for the first quarter in 2005 were $118 million ($0.45 per share), compared with $513 million ($1.93 per share) in the same period of 2004. Net earnings include unrealized gains or losses on derivative contracts, together with gains or losses on foreign currency translation and disposal of assets. In the first quarter of 2005, an unrealized loss on the mark-to-market of the derivative contracts associated with the Buzzard acquisition lowered net earnings by $313 million after-tax.

Production of crude oil, natural gas liquids and natural gas averaged 430,800 barrels of oil equivalent per day (boe/d) during the quarter, compared with 476,700 boe/d in the same period of 2004. Petro-Canada is on track with its 2005 annual production guidance.

"Our financial strength provided the flexibility to fund our capital program, continue to buy back shares and add interests in quality assets like the Fort Hills leases, the Dover facility and leases, and a petrochemical facility. We also advanced Hebron, another long-term East Coast oil project," said Mr. Brenneman.

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. Its common shares trade on the TSX under the symbol PCA and on the New York Stock Exchange under the symbol PCZ.