CALGARY (CP) -- Compton Petroleum's [TSX:CMT] second-quarter profit more than tripled to C$69 million as lower tax rates and a strengthening Canadian dollar gave the junior oil and gas company a big boost.
Calgary-based Compton's earnings for the quarter ended June 30 were 51 cents a diluted share, compared with C$22 million or 17 cents per share a year ago.
Revenue rose to C$133.2 million from C$121.8 million, while oil and gas production increased 13% to 32,645 barrels of oil equivalent per day.
Net earnings in the 2006 quarter benefited from an unrealized foreign exchange gain of C$20 million, and C$21 million due to lower federal and provincial tax rates.
President and CEO Ernie Sapieha said the company had a ''solid'' second quarter, and expects production to increase in the final five months of the year.
Sapieha also said the company was proceeding with plans that it announced in late June to cut its capital spending this year by C$110 million to C$465 million, and sell about C$100 million in assets to combat weaker natural gas prices and spiralling inflation in the service sector.
''Compton is in a strong position to meet the challenges currently facing our industry,'' he told analysts Monday. ''We revised our capital program and plans for the remainder of the year to address the challenge and position Compton for the future.''
The company also boosted its oil and natural gas liquids production in order to offset lower gas prices and enjoyed hedging gains of C$8.6 million on the quarter.
Production for the quarter averaged nearly 33,000 barrels of oil equivalent per day, an increase of 13% over the year-ago period but lower than the first quarter's output.
Compton said that it drilled 58 wells in the second quarter, less than half of the wells it drilled in the first three months of the year due to the annual spring breakup and a wet June that affected all areas of field operations.
''We achieved a 96% drilling success rate during the quarter and with 50% of our planned 360 to 380 annual drilling program completed by the end of June, we are on track to complete the full program by year-end,'' the company said in a release.
On the Toronto stock market Monday, Compton shares fell 60 cents or 4% to $13.74.
(c) The Canadian Press 2006