ST. JOHN'S, N.L. (CP) -- Petro-Canada [TSX:PCA; NYSE:PCZ] said Friday that production at the Terra Nova offshore oil operations will be 35% lower than previously expected this quarter, largely due to a combination of equipment problems.
The Calgary-based company, which owns 34% of the oil field and operates it, said Terra Nova gross production will now average 77,000 barrels per day in the first quarter, 42,000 barrels per day lower than originally expected.
Other partners are: Exxon Mobil Canada Properties [NYSE:XOM] (22%), Norsk Hydro Canada Oil & Gas [NYSE:NHY] (15%), Husky Energy Operations Ltd. [TSX:HSE] (12.51%), Murphy Oil Company Ltd. [NYSE:MUR] (12%), Mosbacher Operating Ltd. (3.5%) and Chevron Canada Resources [NYSE:CVX] (1.0%).
Petro-Canada said its share of Terra Nova production is expected to average 26,000 barrels per day in the first quarter of 2006, approximately 15,000 barrels per day or 36% lower than originally expected.
In the second quarter, Terra Nova gross production is expected improve but still fall short of expectations, averaging 83,000 barrels per day, down approximately 32,000 barrels per day.
Petro-Canada's share of production in the second quarter is expected to average 28,000 barrels per day, down by 11,000 barrels per day or 28% from expectations.
The Terra Nova oil field is 350 kilometres east-southeast of St. John's, N.L.
Petro-Canada said the drilling of a production well in the Far East block has been delayed largely due to equipment issues. The production well is now expected to be on stream by the end of March.
In addition, a six-day unscheduled shutdown in February for repairs and a mechanical failure in the gear box of one of the two main power generators have reduced production on the floating production and storage platform.
Replacement of the generator gear box is expected to be completed by the end of June.
Petro-Canada stock closed at C$51.65, down 16 cents, at the Toronto Stock Exchange.
(c) The Canadian Press 2006
