SaskEnergy Incorporated First Quarter Report $14.00
AECO Monthly Index Historical Prices
March 31, 2011
Conventional Natural Gas
$12.00
$10.00
$8.00
Shale Gas Revolution
$6.00
$4.00
Forward Price at June 30, 2018
$2.00
$0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
CONSOLIDATED FINANCIAL RESULTS
Consolidated Net Income
Three months ended June 30
(millions)
2018
2017 Change
Income (Loss) before unrealized market value adjustments Impact of fair value adjustments Revaluation of natural gas in storage
$
6
$
(8)
$
14
(6)
6
(12)
12
(4)
16
Consolidated net income (loss)
$
12
$
(6)
$
18
Net income before unrealized market value adjustments was $6 million for the three months ended June 30, 2018, $14 million favourable compared to the $8 million net loss in 2017, due primarily to the higher commodity, delivery and transportation and storage revenue. In general, the long term market price of natural gas is trending a slight increase, which means that there are constrained price differentials between current and forward market prices, limiting opportunities to use storage to generate gas marketing margins. The Corporation may be able to take advantage of the TCPL mainline, through diversions to other locations when capacity is underutilized, which would improve the unfavourable gas marketing results through the remainder of 2018-19. With respect to core operations, the delivery rate increase effective November 1, 2017 combined with increased transportation loads and a transportation rate increase effective April 1, 2018 will continue to contribute to higher revenues compared to 2017. A large portion of SaskEnergy’s revenue is dependent on customers’ use of natural gas to heat their premises. Weather was 3 per cent colder than normal through the three months ending June 30, 2018 compared to 3 per cent warmer than normal for the same period in 2017, which also contributed to higher delivery revenue in the quarter. Operating and maintenance costs decreased compared to 2017 as cost management efforts have continued to be a focus while continuing to provide safe and reliable service.
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2018-19 FIRST QUARTER REPORT
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