Commodity Blog

Petro-Canada, prominent in global oil and gas production and gasoline retailing in Canada, says its fourth-quarter profit jumped 36 per cent to $522-million, from a year-earlier $384-million.
Net earnings in the quarter ended Dec. 31 amounted to $1.08 a share, compared with 77 cents per share a year ago, the Calgary-based company reported Thursday.
Analysts’ consensus forecast was for earnings of $1.32 a share, before one-time items, according to Thomson Financial.
“The fourth quarter was a solid quarter, capping off an excellent year,” CEO Ron Brenneman said in a release. “We successfully followed through on our two business priorities; exceeding our upstream production targets and not only advancing five major projects, but adding two more.
“In 2008, we will bring on the Edmonton refinery conversion project — a significant contributor to future cash flows. We will also advance our six other growth projects, making final investment decisions on Fort Hills, the Syria Ebla gas and Montreal coker projects.”
The company credited higher operating earnings and gains on foreign currency translation of long-term debt, partly offset by a change in the value of the Buzzard derivative contracts in the North Sea.
Net earnings from continuing operations for the full year totalled $2.7-billion or $5.59 a share, compared with $1.6-billion or $3.15 per share in 2006.
During the fourth quarter, the company entered into derivative contracts to close out the hedged portion of its Buzzard production from Jan. 1, 2008, to Dec. 31, 2010, resulting in an after-tax charge of $120-million.
The North American natural gas business unit recorded a charge of $97 million after tax for the impairment of coal-bed methane assets in the U.S. Rockies “due to probable reserves reductions, combined with lower prices.”
In 2008, the firm plans to drill up to 17 wells focused in the North Sea, offshore Trinidad and Tobago, Libya and in the Northwest Territories and Alaska.
Work is under way for the drilling of the three North of 60 wells in the first quarter of 2008. In the North Sea, Petro-Canada and its partners plan to drill up to six wells.