PIPELINES / AEC Pipelines L.P. reports 1st 3 months Results
CALGARY, MAY 4 /CNW/ - AEC PIPELINES, L.P. today reported financial
results for the three months ending March 31st, 1998.
Distributable Cash totaled $20.3 million ($0.19 per unit) and net income
for the same period was $14.9 million ($0.14 per unit). As the initial public
offering of the Partnership closed on April 9, 1997, comparative financial
results for the quarter are not presented.
On March 16, 1998, the General Partner approved the distribution of $0.19
per partnership unit on April 30, 1998 to holders of record on March 31, 1998.
With the payment of the final instalment on March 31, the Class A Partnership
Units now trade under the symbol ALB.UN on the Toronto and Alberta stock
exchanges.
OPERATIONS
First-quarter operations were as anticipated on each of the Cold Lake,
Alberta Oil Sands (AOSPL) and Wabasca River pipelines.
Express Pipeline System volumes were slightly ahead of forecast for the
first quarter of 1998. During the second and third quarters of 1998, however,
volumes on the southern leg of the Express Pipeline System (Platte Pipeline)
will be somewhat constrained as a result of initiating a testing program on
the pipeline.
In response to a July 2, 1997 line failure near Gurley, Nebraska, Platte
Pipeline developed the testing program which, if successful, is expected to
result in the restoration of full operating pressure on the pipeline by the
end of 1998. The program involves the use of a specially developed internal
inspection tool and hydrostatic testing over certain sections of the pipeline.
The General Partner anticipates that this program, if successful, will
minimize capital costs and throughput restrictions and not have a material
impact on 1998 Distributable Cash.
NEW DEVELOPMENTS
Engineering design and procurement continues on the AOSPL system
expansion to meet Syncrude's announced expansion. The General Partner
anticipates that construction of the initial phase will commence in mid-1999
and be completed in 2000, increasing sustainable throughput capacity to
265,000 barrels per day from its current capacity of 238,000 barrels per day.
Further expansions of AOSPL capacity will occur post-2000 as Syncrude proceeds
through its planned expansion program.
AEC PIPELINES, L.P. Financial Results
Express entered into a joint tariff with other pipeline companies,
effective April 1, 1998, for access to the refinery market in Salt Lake City.
A number of market development initiatives by Express should result in
increasing throughputs into the Salt Lake City market as crude production in
the Rocky Mountain region declines.
Oil prices continue to remain very low compared to last year. Although
uncertainty remains about the development of new heavy oil projects, the
Partnership's financial and contractual agreements provide stability against
fluctuations in commodity prices. AEC Pipelines is well positioned to
transport planned increases in production and will continue to actively
participate in discussions regarding further pipeline development in
northeastern Alberta.
AEC Pipelines, L.P. is a Canadian limited partnership engaged in the
transportation of crude oil through the Alberta Oil Sands, Cold Lake, Wabasca
River, Express and Platte pipelines.
ADVISORY
Certain information regarding the Limited Partnership set forth in this
document, including management's assessment of future plans and operations,
may constitute forward-looking statements under applicable securities law and
necessarily involve risks associated with those plans or operations, such as
loss of market, currency fluctuations, environmental risks, industry
competition, and ability to access sufficient capital from internal and
external resources; as a consequence, actual results may differ materially
from those anticipated in the forward-looking statements.
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AEC PIPELINES, L.P.
UNAUDITED COMBINED STATEMENT OF INCOME AND DISTRIBUTABLE CASH
THREE MONTHS ENDED MARCH 31,
(thousands of dollars, except per unit amounts)
1998
-------
Tariff revenue from Pipeline Assets $ 23,954
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Expenses
Operating 8,212
Depreciation 3,804
----------
12,016
----------
Income before investment income 11,938
Add (deduct):
Interest income on investment in AEC
Express Holdings Ltd. 4,253
Other interest income 156
Interest expense (65)
Management fee payable by the Partnership to
the General Partner (474)
----------
Income of the Partnership before income taxes 15,808
----------
Income taxes of Alberta Oil Sands Pipeline Ltd.
Current 907
Deferred (20)
----------
887
----------
Net income of the Partnership for the period $ 14,921
Add (deduct):
Depreciation 3,804
Deferred income taxes (20)
Interest income on investment in
AEC Express Holdings Ltd. (4,253)
AEC Express Operating Cash 8,784
Capital expenditures on Pipeline Assets (10,237)
Capital expenditures in connection with the
interest in the Express Pipeline System (2,801)
Capital expenditures funded by AEC 497
Long-term borrowings 9,186
Reserve for capital expenditures 191
Reserve for future distributions 201
----------
Distributable Cash for the period $ 20,273
----------
----------
Per Class A Unit
Distributable Cash $ 0.19
----------
----------
Net income $ 0.14
----------
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AEC PIPELINES, L.P.
UNAUDITED COMBINED BALANCE SHEET
(thousands of dollars)
March 31, December 31,
1998 1997
--------- -------------
ASSETS
Current assets
Cash and short-term investments $ 12,733 $ 3,236
Accounts receivable 7,901 7,932
Accrued interest receivable - AEC
Express Holdings Ltd. 16,824 12,571
--------- ---------
37,458 23,739
--------- ---------
Investment in AEC Express Holdings Ltd. 200,000 200,000
--------- ---------
Capital assets 199,892 193,459
--------- ---------
$ 437,350 $ 417,198
--------- ---------
--------- ---------
LIABILITIES AND PARTNERS' EQUITY
Current liabilities
Partnership distributions payable
Public unitholders $ 6,082 $ 6,082
Alberta Energy Company Ltd. 34,113 20,324
General Partner 1,004 598
Accounts payable 2,486 3,347
Due to General Partner 5,706 3,199
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49,391 33,550
--------- ---------
Alberta Oil Sands Pipeline Ltd. deferred
income taxes 3,127 3,147
--------- ---------
Long-term debt 14,402 5,216
--------- ---------
Partners' equity
Limited partners 368,332 373,079
General Partner 2,098 2,206
--------- ---------
370,430 375,285
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$ 437,350 $ 417,198
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AEC PIPELINES, L.P.
UNAUDITED COMBINED STATEMENT OF CHANGES IN FINANCIAL POSITION
THREE MONTHS ENDED MARCH 31,
(thousands of dollars)
1998
-------
Operating activities
Net income $ 14,921
Depreciation 3,804
Deferred income taxes of Alberta Oil
Sands Pipeline Ltd. (20)
----------
Cash flow from operations 18,705
Net change in non-cash working capital 11,619
----------
30,324
----------
Investing activities
Acquisition of assets from Alberta Energy Company Ltd. -
Additions to capital assets (10,237)
----------
(10,237)
----------
Financing activities
Long-term borrowings 9,186
Partners' capital contributions 497
Partnership distributions (20,273)
----------
(10,590)
----------
Increase in cash and short-term investments 9,497
Cash and short-term investments at beginning of period 3,236
----------
Cash and short-term investments at end of period $ 12,733
----------
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1. Formation of the Partnership
On January 1, 1997, AEC Pipelines, L.P. (the ''Partnership'') acquired
Alberta Energy Company Ltd.'s (''AEC'') 19% joint venture interest in the
Wabasca River Pipeline in consideration for Class B partnership units.
On April 9, 1997, the Partnership completed a public offering of Class A
limited partnership units, represented by instalment receipts, for net
cash proceeds of $295,280,000. The second instalment of $4.00 per Class A
Unit was due and payable on or before March 31, 1998.
The proceeds from the issue were applied to acquire AEC's interest in the
Cold Lake and AOSPL systems, and to make a $200,000,000 investment in AEC
Express Holdings Ltd., the entity which holds AEC's interest in the
Express Pipeline System.
2. Comparative Figures
Comparative financial results for the quarter ended March 31, 1997 (prior
to the April 9, 1997 closing of the public offering of Class A Units)
have not been provided as these results were entirely for AEC's account
and reflected limited operating activity.
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