Lower Oil prices Prompt Oil Sands Delay

Article Excerpt

PETRO-CANADA $24 (Toronto symbol PCA; Conservative Growth Portfolio, Resources sector; Shares outstanding: 484.4 million; Market cap: $11.6 billion; SI Rating: Average) owns 60% of the proposed Fort Hills oil sands project. Due to rising raw material and labour costs, the company now estimates that its share of the costs will rise 50% from its earlier estimate to around $17 billion. In light of the recent drop in oil prices and uncertain credit markets, Petro-Canada and its partners will probably focus on the mining portion of this project for now. They will postpone building the more costly upgrader facility, which converts the tar-like heavy oil to refinery-ready crude, until conditions improve. Meanwhile, thanks to sharply higher oil prices, Petro-Canada’s earnings in the three months ended September 30, 2008 jumped to $2.56 a share (total $1.2 billion) from $1.29 a share ($630 million) a year earlier. These figures exclude one-time items. Cash flow per share rose 73.4%, to $4.37 from $2.52. Revenue grew 50.7%,…