CANADIAN FIRMS REPORT HIGHER UPSTREAM PROFITS

Aug. 1, 1994

Several Canadian companies report improved profits flowing from higher prices and sales volumes for hydrocarbons. Talisman Energy Inc., Calgary, formerly BP Canada Inc., said second quarter profits more than doubled from the same period in 1993 to $15.6 million. Drilling successes in the Northeast British Columbia gas play and increased oil and gas prices and production were factors.

Several Canadian companies report improved profits flowing from higher prices and sales volumes for hydrocarbons.

Talisman Energy Inc., Calgary, formerly BP Canada Inc., said second quarter profits more than doubled from the same period in 1993 to $15.6 million. Drilling successes in the Northeast British Columbia gas play and increased oil and gas prices and production were factors.

Talisman's year to year gas production increased to 437 MMcfd in second quarter 1994 from 296 MMcfd in the same quarter of 1993. Gas prices averaged $1.84/Mcf, compared with $1.59/Mcf in the same quarter last year. Crude oil and natural gas liquids production increased to 38,838 b/d from 24,654 b/d.

An offer by Talisman to buy a 53% interest in Bow Valley Energy Inc., Calgary, from British Gas plc is expected to be closed by Aug. 11.

Meanwhile, Suncor Inc., Toronto, reported second quarter earnings more than doubled this year over the same period in 1993.

Suncor listed current earnings of $24 million, compared with $10 million for second quarter 1993. The company attributed much of the increase to a 40% jump in sales volume by the group that operates an oilsands plant at Fort McMurray Alta.

Canadian Occidental Petroleum Ltd., Calgary reported strong second quarter gains and production from its Yemen oil fields despite a recently ended civil war in that country.

CanOxy reported second quarter profits of $23 million, compared with only $3 million for the same period of 1993. The company's oil production increased in the first 6 months of 1994 to 81,500 b/d, and natural gas production rose to 45 MMcfd. Its Yemeni production averaged a record 77,100 b/d, interrupted for only a few hours by the civil war.

Imperial Oil Ltd., Toronto, with a $5 million loss in the second quarter, was an exception to generally improved profits. The company attributed some of the loss to a $17 million charge related to reducing its resources division staff by 500 workers.

The Exxon Corp. unit earned $87 million in the first 6 months of 1994, compared with $141 million in the same period of 1993.