craig - "some day the lemmings will return"...... BINGO.
First and last sentence of the following Calgary Herald blurb would possibly indicate that "some day" may be soon?
=-=-=-=--=
PetroCan boosts spending 14%
2000 capital budget hits $1.2 billion
Grant Robertson, Calgary Herald
After a year of fluctuating oil prices and financial restraint in the oilpatch, Petro-Canada has set the tone for what could be one of the industry's most aggressive spending periods.
The Calgary-based integrated producer rolled out a robust plan Monday that will see its capital expenditures jump 14 per cent from this year to $1.2 billion in the year 2000.
After spending $1.05 billion amid lagging oil prices in 1999, the 2000 plan is among the highest capital expenditure budgets Petro-Canada has put forward.
"Our capital expenditure program will enable us to realize solid growth in our core businesses, while allowing for the pursuit of selected future opportunities," said Petro-Canada chief executive Jim Stanford.
The $1.2 billion will be focused on Petro-Canada's three core businesses -- natural gas operations in Western Canada, oil production off the Grand Banks, as well as refining and marketing.
The spending plan comes as many companies are getting ready to open up their pocketbooks.
Last week, Petro-Canada's Calgary-based rival Shell Canada Ltd. announced it plans to spend more than $4.1 billion over the next five years, its largest ever capital program. The total includes more than $375 million in 2000 on conventional exploration and production as well as refining and distribution operations.
Also included is spending $3.5 billion over the next three years to its planned Athabasca oilsands project.
Analysts backed Petro-Canada's spending plans, indicating other oil companies will likely follow suit with similar spending blitzes of their own.
"It is a very reasonable type of expenditure program," said Brian Dutton of Toronto-based Warburg Dillon Read.
"It can be financed entirely from internally generated cash flow, so its quite in line with their cash flow generating capabilities."
The price of crude oil closed at $25.38 US a barrel Monday on the New York Mercantile Exchange, more than double what it was a year ago. Financial analysts say companies that budgeted for $14 in 1999 are now banking on $18 to $20 a barrel in 2000.
"We could be looking at a record year in terms of cash flow in the industry," said Nick Majendie, an analyst with Canaccord Capital Corp. in Vancouver
"I think a lot of companies are looking at their (spending) opportunities right now."
Petro-Canada will increase its spending on exploration and development of natural gas in Canada to $395 million next year, from $280 million in 1999.
The company's activities off the East Coast will see a transferring of cash as Petro-Canada spends $230 million on its Hibernia and Terra Nova projects -- down from $275 million last year. However, those projects are now well established in terms of initial expenditures, with most of the spending needed to get Hibernia and Terra Nova off the ground completed in 1999, the company said.
On Monday, Petro-Canada increased its reserve estimates for Hibernia to 730 million barrels of oil from previous estimates of 615 million barrels.
Petro-Canada will now spend $80 million on other Grand Banks investments, including developing the White Rose and Hebron/Ben Nevis oilfields as well as other offshore exploration.
"Last year we entered the year with crude prices in the $11 range and we were a little cautious about how we moved forward with those opportunities," said Petro-Canada spokesman Robert Andras. "This year we are comfortable with increasing our expenditures."
Petro-Canada has been a vocal non-believer in the current oil price surge. In September, Stanford said he did not believe the high oil prices, which have been over above $26 in recent weeks, will be able to sustain themselves.
|
