Alberta Energy Co. Ltd. , one of North America’s largestindependents, turned in a stellar performance in 2000, doublingcash flow and recording net earnings up five-fold, at the same timeit positioned itself for future gains, adding reserves equal to458% of production.

“We’ve had a remarkable year for several reasons — more thanC$2.2 billion in cash flow, C$1.1 billion net earnings beforeacquisition amortization, more than 20% growth in upstream dailyproduction and our midstream operating cash flow more thandoubled,” said Gwyn Morgan, AEC’s CEO. “On top of that, we added451 MMboe, or 4.6 boe of proved and probable reserves for everybarrel produced. This reserve growth will anchor strong,sustainable production growth for several years ahead.”

Morgan cited the explosion in gas demand, which “driven by theInternet and a decade of tremendous economic expansion, willcontinue to make natural gas the hottest fuel on the continent. Foralmost a decade, AEC has built its North American gas position, andnow we believe we are the best-placed North American independent tocapitalize on this sea change in energy markets.”

In the fourth quarter AEC, the largest independent storageoperator in North American, raised its average Canadian producedgas price to C$8.24/Mcf, about 10% higher than the industry averageby using its storage to hold gas and sell into the market whenprices peaked. Canadian production in the fourth quarter averaged1.2 Bcf/d. For the year AEC’s Canadian gas sales averaged 989MMcf/d at average prices of C$5.32/Mcf, up 115% from 1999.

AEC’s North American gas sales, including newly-acquiredproduction in the U.S. Rockies, grew 18% to average 1.07 Bcf/d in2000, up from 904 MMcf/d in 1999. At the same time, oil and naturalgas liquids sales were up 23% to average 118,200 b/d, for acombined production of 297,000 boe/d.

Last year the company drilled a record 1,230 net wells, — 867gas and 328 oil — with a 97% success rate, increasing totalconventional proved and probably reserves by 27% to 5.9 Tcf and 660million barrels of liquids.

The company also has increased its oil production in Ecuador andput together a portfolio of exploration assets in the MackenzieDelta, the Alaskan foothills, and along the Alaskan North Slope.Last week it announced its second major discovery in northeasternBritish Columbia in less than a year. AEC predicted the latestLadyfern discovery well alone will produce 60 MMcf/d (see DailyGPI, Feb. 23).

For the entire year, AEC generated cash flow of C$2.2 billion,or C$14.89 per share diluted, up 136% from a year earlier. Netearnings before acquisition amortization were $1.1 billion, up 294%from 1999. Net earnings were $951 million, or $6.19 per sharediluted, a five-fold increase from 1999. Revenue net oftransportation, royalties and production taxes was $5.3 billion, up90% from $2.8 billion in 1999.

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