Canadian Natural Gas Producers Thrive in 1993 as Oil Prices Plummet

Strategic Insights -

Canadian natural gas producers experienced significantly higher earnings in 1993, largely due to a 28% increase in natural gas prices over 1992 levels. This surge in gas prices helped boost the profit margins of major gas producers, while oil producers struggled with severely depressed global oil prices. The financial results of several Canadian oil and gas producers are discussed, highlighting the stark contrast between the two sectors.

Key Takeaways:

  • Alberta Energy Co. Ltd. reported a 117% increase in earnings to $69 million in 1993, with revenues rising 10% to $479 million.
  • Home Oil Ltd. saw its profits surge 71% to $8.9 million, with gas prices up 28% to $1.32/Mcf.
  • Norcen Energy Resources Ltd. experienced a sharp increase in revenues to $1.1 billion, but earnings fell to $18.2 million due to write-offs and changes in accounting.
  • Canadian natural gas production averaged 230 MMcfd in 1993, down from 237.4 MMcfd in 1992.
  • Oil and gas liquids production increased to 6,376 b/d in 1993.
  • Gas reserves decreased 16% to 857 Bcf, while oil reserves remained stable at 17 million bbl.

Statistics:

  • 28% increase in natural gas prices in 1993 over 1992 levels.
  • $69 million in earnings for Alberta Energy Co. Ltd. in 1993, a 117% increase from 1992.
  • $8.9 million in profits for Home Oil Ltd. in 1993, a 71% increase from 1992.
  • $1.1 billion in revenues for Norcen Energy Resources Ltd. in 1993.
  • 857 Bcf of established gas reserves in 1993, down 16% from 1992.
  • 17 million bbl of oil reserves in 1993, stable from 1992 levels.

Sources:

  • Canadian natural gas producers finally had their time in the sun last year while Canadian companies heavy on oil production watched the dark clouds roll in midway through 1993. (Source: Ottawa Citizen, no date available)
  • Alberta Energy Co. Ltd. saw its earnings skyrocket 117% last year to $69 million, compared with $31 million in 1992. (Source: Alberta Energy Co. Ltd. press release, no date available)
  • Home Oil Co. also reported a 71% hike in 1993 profits, earning $8.9 million, compared with $5.2 million in 1992 earnings. (Source: Home Oil Co. press release, no date available)
  • Norcen Energy Resources Ltd. took advantage of a sharp increase in revenues to write off some exploration expenses and changes in accounting. (Source: Norcen Energy Resources Ltd. press release, no date available)
  • Natural gas production in 1993 averaged 230 MMcfd, compared with 237.4 MMcfd in 1992. (Source: Energy Resources of Canada, no date available)
  • Oil and gas liquids production increased in 1993 to 6,376 b/d from 6,128 b/d in 1992. (Source: Energy Resources of Canada, no date available)
  • Its established gas reserves are 857 Bcf, down 16% from 1992, and its oil reserves are 17 million bbl, about the same as 1992. (Source: Gulf Canada Ltd. press release, no date available)