Calgary-based AltaGas Services Inc. reported record first quarter net income of C$10 million or C$0.22 per basic and diluted share, compared to C$7.4 million or C$0.19 per basic and diluted share for the first quarter of 2002, representing a 35% increase in net income and a 16% increase in earnings per share.

The midstream energy company attributed the increase primarily to the higher price received for power and the first full quarter impact of the acquisitions of the Wabasca gathering and processing facilities and Suffield transmission pipelines and the commissioning of the Joffre ethane extraction plant, all in late December 2002.

“Our first quarter results indicate we are on the right path to deliver another year of solid growth in earnings, cash flow and assets,” said CEO David Cornhill.

Looking ahead, AltaGas said the strong drilling activity experienced in the Western Canadian Sedimentary Basin during the first quarter is expected to continue, noting that some industry analysts are forecasting the number of natural gas well completions for 2003 to be similar to the historically high 11,397 gas well completions of 2001.

“With the increased drilling activity, AltaGas is seeing a significant increase in internal growth opportunities and currently has five projects underway including expansions of existing plants and new plant development in its field gathering and processing component,” the company said. Regarding the acquisition possibilities, AltaGas’ management said it estimates that there are currently upwards of $500 million in midstream assets available for purchase. The company said it is currently evaluating several opportunities but will pursue only those opportunities that meet AltaGas’ financial needs and where concentration of risk, including commodity price exposure, can be managed.

“Looking forward through 2003 AltaGas’ earnings are expected to trend similar to previous years with the second quarter being the weakest quarter of the year and the fourth quarter being the strongest quarter,” AltaGas said. “On an annual basis, AltaGas’ management expects to deliver earnings per share growth consistent with the company’s five-year compound annual growth of approximately 20%.”

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