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Gold/Mining/Energy : Canadian Oil & Gas Companies -- Ignore unavailable to you. Want to Upgrade?

To: Kerm Yerman who wrote (5933)	1/26/1999 9:43:00 PM
From: Tomas	Read Replies (1) \| Respond to of 24925

Financial Times, January 25. OIL: Canadian groups suffer. Talisman Energy, one of Canada's largest oil producers, has taken a C$183m (US$120.4m) write-down on its North Sea oil and gas assets, the first of what is expected to be several year-end write-downs in the Canadian oil industry. Jim Buckee, Talisman chief executive, said the write-down was caused by low oil prices and higher costs, due to the strength of sterling. Standard & Poor's, the rating agency, has confirmed its triple-B plus rating on Talisman corporate credit and senior unsecured debt, but revised its outlook from stable to negative. Michelle Daithorne, oil and gas analyst at Standard & Poor's in Toronto, said the revised outlook reflects the continued weakness of oil and gas prices and concern that falling operating earnings may hurt Talisman's ability to fund its exploration programme and replace its reserves. Many Canadian oil producers face a difficult decision on whether to write down the value of those assets or hope that oil prices will soon rebound. "Any company that has reserves that are largely undeveloped is going to be facing a similar decision at the end of the year," said Robert Gillen, analyst with John S. Herold. Gulf Canada took a C$465m after-tax charge in the third quarter, primarily related to its ill-timed 1997 acquisition of Stampeder Exploration, the heavy-oil producer. Gulf has also sold most of its North Sea assets to reduce its debt load. Three of Canada's five largest oil producers all reported sharp declines in fourth-quarter earnings last week. Petro-Canada, the integrated oil company, saw net earnings drop 75 per cent from the previous year to C$19m, while its earnings for the full year fell 68 per cent. Cash-flow, which is critical to financing future exploration, fell 34 per cent year-on-year. However, the company said its planned capital expenditure for 1999 would be reduced by only 5 per cent. Imperial Oil, Canada's largest oil company, reported earnings down by a half in the fourth quarter to C$136m, while earnings at PanCanadian Petroleum were down 21 per cent on the quarter and 55 per cent on the year.