16-06-04 Last year was a good year to be in the energy sector, according to a report, with industry profits doubling and revenues up an average of 12 %. Based on a survey of Canada's 100 top exploration and production companies, PricewaterhouseCoopers found that revenues, on average, rose to $ 857 mm in 2003 from $ 763 mm the year before.
Junior and intermediate oil and gas companies enjoyed the largest gains, with revenues up an average of 94 %. That compared with revenue growth of only 3 % in 2002. Overall, assets grew by 10 % and market capitalization by 24 %.

Per-share earnings doubled for the industry as a whole, from an average of 34 cents in 2002 to 70 cents.
"Strong commodity prices in the energy industry have resulted in consistent growth in revenues in all sectors," Angelo Toselli, PwC’s energy and utilities practice leader, said in the report.

The average price of West Texas Intermediate crude oil rose 19 % last year, to $ 31.04 a barrel from $ 26.08 in 2002.
"Higher prices in the first half of 2003, as compared to 2002, were due to growing uncertainty over supply, being mainly attributable to the political environment in Iraq," the report said. "Strong prices continued throughout the rest of the year as political unrest continued in the international oil producing community and economic growth contributed to strong demand." Canadian prices for light sweet crude rose 8 % in 2003, to C$ 43.14 from $ 39.94.

This year has already seen crude oil prices hit record highs, to the grief of motorists pulling up to the gasoline pumps. PWC said it expects strong global demand, especially from Asia, will continue to keep prices high despite higher production from major oil producing nations.
However, the report warned producers to be ready for an eventual decline in prices.
"The increase in pricing, while positive for the Canadian sector, should also be approached with an eye toward internal cost controls in the event that price levels off in the future," said Cal Jacober, partner in PwC’s Canadian energy and utilities practice.

PWC also commented on the growing number of income trusts in Canada's energy sector.
The number of trusts climbed to 28 last year from 16 in 2002, with their combined market cap jumping by 77 % to $ 28.1 bn.