SaskEnergy Second Quarter Report - September 30, 2020

The AECO daily index averaged $2.00 per GJ throughout the six months ended September 30, 2020 compared to $0.99 per GJ the year prior. Traditionally, most natural gas in Saskatchewan (TEP) is priced at a differential to the AECO price. This AECO to TEP differential for the six months ended September 30, 2020 averaged $nil compared to $0.64 per GJ for the year prior. The decreased differential can be attributed to upstream system improvements and the Temporary Service Protocol discussed above. As transportation is made more readily available from production areas in northeast BC to delivery points in southwest SK, the price differentials should remain near the marginal cost of transportation.

The following chart shows AECO natural gas prices:

AECO Monthly Index Historical Prices

$3.50

Low Demand for Western Canadian Gas

Forward Price at Sept 30, 2020

$3.00

2015-Present Average Price $1.98/GJ

$2.50

$2.00

$1.50

$1.00

$0.50

$0.00

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

CONSOLIDATED FINANCIAL RESULTS Consolidated Net Income

Three months ended September 30,

Six months ended September 30,

(millions)

2020

2019 Change

2020

2019 Change

Impact of fair value adjustments Revaluation of natural gas in storage (Loss) income before unrealized market value adjustments

$

(14)

$

(2)

$

(12)

$

(18)

$

10

$

(28)

16

(17)

33

24

(27)

51

2

2

-

6

-

6

Consolidated net income (loss)

$

4

$

(17)

$

21

$

12

$

(17)

$

29

Excluding market value adjustments, financial results for six months ended September 30, 2020 are $28 million lower than the same period in 2019. The decrease in net income is due to a lower asset optimization margin and lower customer contribution revenues, in addition employee benefit and operating and maintenance costs increased compared to 2019-20.

2020-21 Second Quarter Report

7

Made with FlippingBook Ebook Creator