Canadian Press: Shell Canada reports Q2 profit of $285M, up from $175M a year ago

Thursday, July 22, 2004

CALGARY (CP) - Profits at Shell Canada increased 63 per cent in the second quarter, helped by a significant contribution from its Athabasca oil sands project and higher refining margins.

The sharp increase in profits also prompted Shell to increase its quarterly dividend to 25 cents per share, up from 22 cents per share. Shell shares would yield about 1.5 per cent based on its current stock price.

The Calgary-based energy company said Thursday it earned $285 million or $1.04 per share for the three months ended June 30. That compared with a profit of $175 million or 64 cents per share a year ago.

Quarterly revenue increased to $2.64 billion, up from $2.07 billion in the second quarter in 2003.

"Continued steady progress in oil sands, and high commodity prices and refining margins, contributed to the quarter's strong earnings and cash flow," said Linda Cook, Shell Canada's president and CEO.

Shell's oil sands segment reported second-quarter earnings of $96 million compared with a loss of $68 million for the same period in 2003, when the Athabasca oil sands project began integrated operations.

The company's exploration and production earnings in the second quarter of 2004 were $91 million compared with $200 million for the same period in 2003.

Shell said exploration expenses were higher due to a $28-million after-tax write-off for its share of the unsuccessful Weymouth deep water well and the cost of relinquishing exploration licences offshore Nova Scotia.

Shell's oil products earnings were $110 million in the quarter, more than double the $52 million for the second quarter of 2003.

"Continued strong demand and low North American inventories resulted in significantly higher refining margins compared with the same period last year," the company said.

"Retail marketing margins remained depressed as pump prices failed to reflect the full extent of the increases in underlying product values. Operating expenses were slightly higher than for the same quarter last year due to higher refinery maintenance costs and higher pension expense."

Shell Canada (TSX:SHC) is one of Canada's biggest natural gas producers and a major producer of sulphur and oilsands crude. The company has no conventional oil production in Canada, but operates a national gasoline station network under the Shell brand.

Shares in the company were down 29 cents to $65.50 in Thursday trading on the Toronto stock market.

© Copyright 2004 The Canadian Press

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