ENERGY TRUSTS / Athabasca Oil Sands Trust Reports Fourth Quarter
Results - Distribution set at zero as Trust continues to re-invest
in Syncrude growth
CALGARY, Jan. 25 /CNW/ - The Board of Directors of Athabasca Oil Sands
Investments Inc. today announced that there would be no fourth quarter
distribution to unitholders of the Athabasca Oil Sands Trust. The decision
reflects both the significant capital investments associated with on-going
Syncrude expansion and the current low oil price environment.
Athabasca invested a record $58.2 million in capital expenditures in the
Syncrude Joint Venture in 1998 compared to $41.5 million in 1997. The
majority of this investment was funded with cash from the Syncrude operations,
with the remainder coming from working capital and new borrowings.
''Athabasca reported net income of $0.08 per Trust Unit in the fourth
quarter for a full year total of $0.40, despite the low oil prices that
prevailed throughout the year,'' says Chairman Walter O'Donoghue. ''We are in
a building period with substantial capital expenditures required to expand
Syncrude's operations. This investment in Syncrude growth is consistent with
the long-term growth strategy of the Trust and is expected to result in
increased Syncrude Sweet Blend (SSB) production and decreased costs. We are
confident that this strategy will significantly enhance the fundamental value
of our units.''
Athabasca's SSB revenues were $44 million for the fourth quarter of 1998,
$24 million lower than the same period last year, reflecting substantially
lower crude oil prices. Fourth quarter sales volumes of approximately 26,500
barrels per day were down 550 barrels per day from 1997's record fourth
quarter. On a full year basis, volumes increased to a record 24,500 barrels
per day. SSB prices averaged $19.19 per barrel in the quarter for a full year
average of $20.45 at the plant gate compared to $27.45 per barrel in the
fourth quarter of 1998 and $27.84 for the full year. Including the effects of
currency hedging, Athabasca's average price received in the quarter was $17.88
per barrel and $19.15 for the year.
Despite an unscheduled coker shutdown, new annual records for volumes and
operating costs for the Syncrude Joint Venture were achieved in 1998. The
Joint Venture's volumes were 76.7 million barrels at an average operating cost
of $13.57 per barrel compared to 75.7 million barrels at $13.78 per barrel
last year. Building on these strong operating results, volumes are budgeted
at 82 million barrels at a cost of $13.27 per barrel for 1999. Increased
volumes are expected from a second mining train in the North Mine opening in
1999 and the full utilization of the recently completed Debottleneck 1
project. Reflecting these targets and the joint venture's capital spending
plans and assuming a continuation of low oil prices, Athabasca expects that
all cash flow during 1999 will be re-invested into the Syncrude Project.
Consolidated Balance Sheets
December 31, December 31,
1998 1997
(unaudited)
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(thousands of dollars)
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ASSETS
Current assets:
Cash $0 $29,169
Accounts receivable 23,968 23,876
Inventories 15,973 14,510
Prepaid expenses 843 383
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40,784 67,938
Reclamation trust 1,628 970
Capital assets, net 406,193 372,684
Deferred charges 12,072 4,675
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$460,677 $446,267
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LIABILITIES AND UNITHOLDERS' EQUITY
Current liabilities:
Bank indebtedness $2,176 $0
Accounts payable and accrued liabilities 21,956 25,167
Unit distribution payable 0 13,500
Current portion of other liabilities 5,676 1,986
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29,808 40,653
Other liabilities 10,618 14,518
Long-term debt 124,972 106,226
Future site restoration and
reclamation costs 14,012 13,042
Preferred shares of subsidiary 2,400 2,400
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181,810 176,839
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Unitholders' equity
Trust units 254,975 254,975
Retained earnings 23,892 14,453
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278,867 269,428
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$460,677 $446,267
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Consolidated Statements of Income and Retained Earnings
(Unaudited)
Three months Year ended
ended December 31, December 31,
1998 1997 1998 1997
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(thousands of dollars except per unit amounts)
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Revenues:
Syncrude Sweet Blend $43,661 $67,593 $171,554 $245,206
Other 55 185 388 732
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43,716 67,778 171,942 245,938
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Expenses:
Operating 30,789 28,126 121,622 122,511
Administration and other 674 1,095 2,753 4,169
Crown royalties 65 11,297 65 23,696
Finance charges 2,923 2,245 9,978 9,215
Dividends on preferred
shares of subsidiary 90 66 360 264
Depletion, depreciation and
amortization 6,708 8,488 25,903 29,170
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41,249 51,317 160,681 189,025
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Income before taxes 2,467 16,461 11,261 56,913
Capital and other taxes 235 59 472 239
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Net income for the period 2,232 16,402 10,789 56,674
Retained earnings,
beginning of period 21,660 11,551 14,453 2,329
Unit distributions 0 (13,500) (1,350) (44,550)
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Retained earnings,
end of period $23,892 $14,453 $23,892 $14,453
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Net income per Trust Unit $0.08 $0.61 $0.40 $2.10
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Consolidated Statements of Changes in Financial Position
(Unaudited)
Three months Year
ended Ended
December 31, December 31,
1998 1997 1998 1997
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(thousands of dollars)
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Cash provided by (used in):
Operations:
Net income $2,232 $16,402 $10,789 $56,674
Items not involving cash:
Depletion, depreciation
and amortization 6,823 8,530 26,248 30,750
Site restoration costs 0 (57) (379) (382)
Contribution to reclamation
trust (174) (155) (658) (538)
Change in non-cash working
capital (5,718) 3,814 (5,120) 557
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3,163 28,534 30,880 87,061
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Investments:
Capital expenditures, net (16,304) (8,847) (58,165) (41,498)
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Sub-total (13,141) 19,687 (27,285) 45,563
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Financing:
Decrease in other
liabilities (1,515) (1,302) (210) (3,329)
Increase in long-term debt 11,000 0 11,000 102,876
Repayment of long-term debt 0 0 0 (95,000)
Net restricted cash 0 0 0 3,550
Deferred financing costs 0 0 0 (1,407)
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9,485 (1,302) 10,790 6,690
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Other:
Current year unit
distributions paid 0 (13,500) (1,350) (31,050)
Prior year unit
distributions paid 0 0 (13,500) (21,600)
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0 (13,500) (14,850) (52,650)
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Increase (decrease) in cash (3,656) 4,885 (31,345) (397)
Cash , beginning of period 1,480 24,284 29,169 29,566
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Cash (bank indebtedness),
end of period $(2,176) $29,169 $(2,176) $29,169
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Statements of Trust Royalty and Distributable Income
(Unaudited)
Three months Year
ended Ended
December 31, December 31,
1998 1997 1998 1997
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(thousands of dollars except per unit amounts)
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Revenues and expenses of
Athabasca Oil Sands
Investments Inc.
Revenues $43,712 $67,777 $171,933 $245,933
Operating expenses (30,789) (28,126) (121,622) (122,511)
Administration and other (536) (992) (2,158) (3,595)
Crown royalties (65) (11,297) (65) (23,696)
Interest on long-term debt (2,636) (2,226) (9,629) (7,654)
Capital taxes (235) (59) (472) (239)
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9,451 25,077 37,987 88,238
Capital expenditures (16,305) (10,109) (55,402) (43,347)
Additional borrowings 11,000 0 11,000 7,876
Site restoration costs 0 (57) (379) (382)
Mining reclamation trust (174) (155) (658) (538)
Financing costs 0 0 0 (1,407)
Reserve adjustments (3,835) (1,017) 9,408 (4,865)
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Base for Trust Royalty $137 $13,739 $1,956 $45,575
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Trust Royalty at 99% $136 $13,602 $1,937 $45,119
Interest income of Trust 2 1 8 5
Administrative expenses of Trust (138) (103) (595) (574)
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Distributable income from
operations $0 $13,500 $1,350 $44,550
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Distributable income from
operations per Trust Unit $0.00 $0.50 $0.05 $1.65
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