July 24, 2008 / 9:56 AM / 9 years ago

Petro-Canada profit boosted by record oil prices

TORONTO (Reuters) - Second-quarter profit at Petro-Canada shot 77 percent higher due largely to higher oil prices, the country's No. 4 oil producer and refiner said on Thursday.

Petro-Canada, which is nearing completion of a C$2.2 billion ($2.2 billion) Alberta refinery conversion project, said profit rose to C$1.5 billion, or C$3.10 a share, from a year-earlier profit of C$845 million, or C$1.71 a share.

Excluding one-time and unusual items, Petro-Canada posted operating earnings of C$1.15 billion, or C$2.38 a share, up 43 percent from C$805 million, or C$1.63 a share.

Analysts polled by Reuters Estimates had forecast, on average, earnings of C$2.50 a share.

Petro-Canada also said it expects its 2008 capital and exploration expenditures to reach C$6.16 billion, up from the C$5.28 billion estimate it offered in December.

Cash flow, a glimpse into an oil company's ability to fund development, increased 35.7 percent to C$1.9 billion, or C$4.09 a share, from C$1.4 billion, or C$2.74 a share.

Revenue was C$7.6 billion, up 38 percent from C$5.5 billion.

Petro-Canada and its rivals have reaped rewards from oil prices that soared 90 percent to a record quarterly average of $123.80 a barrel. Natural gas prices in Canada also surged, averaging C$9.68 per gigajoule, a 44 percent gain from 2007.

Petro-Canada's overall production averaged 414,000 barrels of oil equivalent a day, down 2.5 percent from the same period in 2007.

The company narrowed its 2008 upstream production forecast to a range of 400,000 barrels of oil equivalent per day to 420,000 barrels of oil equivalent per day, from a range of 390,000 to 420,000.

Petro-Canada has staked much of its future on its extensive oil sands holdings, and has retooled its Edmonton, Alberta, refinery to run crude derived from such resources exclusively. It has said it plans to shut the 125,000 barrel a day plant down in August to tie in the new equipment.

($1=$1.01 Canadian)

Reporting by Frank Pingue and Varsha Tickoo; Editing by Frank McGurty

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