National Post (National Edition)

OutPut CutS IN ALBERtA HIt PARKLAND BOttOM LINE

- DA N HE ALING

CA LGA RY • Favourable oil refining margins came to an abrupt end for Parkland Fuel Corp. in the fourth quarter after the Alberta government imposed production curtailmen­ts, its CEO said Friday.

The company reported higher-than-expected profits in the last three months of 2018 because it was able to buy cheap oil in Alberta and transport it on the Trans Mountain pipeline to its Burnaby, B.C., refinery for most of the quarter.

“Canadian crude feedstocks were deeply discounted in the quarter and we did benefit from that,” CEO Bob Espey said on a conference call to discuss fourth-quarter results.

“Near the end of the quarter, the Alberta provincial government instituted production curtailmen­ts which had the impact of reducing the discount of Canadian crudes relative to world benchmarks.

“This reduction in the discounts will impact our early 2019 operations.”

His comments echo complaints by major producers with refining assets such as Husky Energy Inc., Suncor Energy Inc. and Imperial Oil Ltd., which have all said the Alberta curtailmen­t program is an unwanted interventi­on in the marketplac­e.

On Thursday, the province increased its quota for producers by 25,000 barrels per day for April, its second easing since it imposed quotas designed to keep 325,000 bpd off the market starting Jan. 1.

Parkland is Canada’s largest independen­t fuel marketer with more than 1,850 retail locations operating under brands including FasGas, Esso and Chevron. It offers services in a total of 25 countries.

It said Friday that its net earnings in the last three months of 2018, were $ 77 million — up from $49 million in the year-earlier period, and well ahead of analyst expectatio­ns for $63 million, according to Thomson Reuters Eikon.

Parkland also increased its dividend by the equivalent of two cents per share per year.

Revenue for the quarter was $ 3.5 billion, up from $3.4 billion in the same three months of 2017, as the company sold a total of 4.35 billion litres of fuel and petroleum products, down from 4.43 billion litres.

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