CALGARY (CP) -- Pengrowth Energy Trust [TSX:PGF.UN] says it booked a 37% increase in annual profit for 2007 earning C$359.7 million on higher production and prices, partly offset by increased tax and royalty costs.
Pengrowth chief executive James Kinnear told an analyst conference call Tuesday that 2007 ''marked a year of many records'' for his company.
''These include our highest production ever, highest oil and gas sales, highest net income, highest cash flow from operating activities and the highest distributions paid to our unitholders,'' he said.
The profit for the year amounted to C$1.47 per unit, compared with C$262.3 million, or C$1.49 per unit a year ago, when the trust had fewer units outstanding.
Oil and gas sales for the year were C$1.72 billion compared with C$1.21 billion in 2006.
The average analyst estimate had been for earnings of C$1.39 per unit, based on two analysts surveyed by Thomson Financial.
Distributions to unitholders were C$706.6 million, a 26% increase over a year earlier. Cash flow for the year was C$800 million compared to C$554.4 million a year earlier.
Production was up 39% to more than 87,000 barrels of oil equivalent per day over a year ago, due mostly to acquisitions.
Earlier this year the trust wrapped up its takeovers of Esprit Energy Trust, ExxonMobil Canada's Carson Creek properties as well as four subsidiaries of U.S. energy giant ConocoPhillips.
''Pengrowth's strong performance in 2007 was achieved despite the challenging environment we've been operating within,'' said Kinnear, citing the coming tax changes for income trusts, Alberta's new royalty regime and the high Canadian dollar.
While the year-end results may have been strong, for the last three months of 2007 Pengrowth booked a net loss of C$3.7 million, or a penny per unit, compared to net income of C$3.3 million, or one cent per unit, in the fourth quarter of 2006.
Oil and gas sales for the quarter were C$425.5 million compared with C$350.9 million a year earlier.
Distributions to unitholders decreased to C$166.6 million or 67.5 cents per unit, on cash flow of more than C$196 million. A year earlier distributions were C$185.6 million, or 75 cents per unit, on more than C$91 million in cash flow.
The decrease in cash flows from the third quarter was mainly as a result of higher operating, royalty, administrative and interest costs incurred, Pengrowth said.
Fourth-quarter production averaged 84,331 oil-equivalent barrels per day, an increase of nine% from the fourth quarter in 2006.
Average realized prices were C$54.58 per barrel of oil equivalent, up 11% from the same quarter last year.
For 2008, Pengrowth expects production to average between 80,000 and 82,000 boe per day, roughly divided between natural gas and liquids.
''The challenging environment we've been operating within has created a great period of opportunity. We see a positive future ahead for Pengrowth, created momentum for the trust and will continue to move forward based on generating strong returns to unitholders,'' Kinnear said.
UBS analyst Grant Hofer gave Pengrowth a ''neutral'' rating and set a share price target of C$17. The trust's production was higher than he expected, but the earnings were slightly lower.
''Higher than expected royalties and hedging losses during the quarter are the primary factors for the difference,'' he wrote in a research note.
Pengrowth Energy Trust units closed Tuesday at C$18.35, up 24 cents, in trading on the Toronto Stock Exchange.
Copyright 2008 The Canadian Press