CALGARY - Sluggish oil prices took a big bite out of Petro-Canada as continued weakness in oil prices led to a 95-per-cent drop in profits in the second quarter.
The Calgary-based oil and gas giant reported net earnings of $77 million or 16 cents a share for the quarter ended June 30, down sharply from year-earlier profits of $1.5 billion or $3.10 per share.
Operating earnings were also dragged down by comparatively lower oil prices and production volumes, plunging 91 per cent to $99 million from $1.2 billion booked during the same quarter of 2008.
Quarterly oil and gas production averaged 374,00 barrels of oil equivalent per day, down from the average of 414,000 barrels produced the year before. Production decreased in eastern Canada and internationally, while production in the oilsands remained relatively flat.
Petro-Canada president Ron Brenneman said the company is well positioned heading into its multibillion-dollar merger with Suncor Inc., which could close as early as this weekend)
"We continued to manage our business in a prudent manner during the second quarter, as the downturn persisted," Brenneman said in a statement.
"Staying the course we charted for ourselves at the beginning of this year has us in a strong position heading into our merger with Suncor."
The company said it would cease to pay dividends as a result of the merger, adding that future dividends would come from the merged entity.
