SaskEnergy Incorporated First Quarter Report
March 31, 2011
In previous years shale gas production has responded quickly to natural gas price increases by increasing production, which has limited the recovery of gas prices. During the first quarter of the fiscal year shale gas production has been slower to respond to the price decrease, which allowed for natural gas prices to recover by the end of September 2016 to levels comparable to the fall of 2015. The rise in gas prices during the first six months of the fiscal period is positive for natural gas prices but is not enough to make investment into additional Saskatchewan gas production economical. SaskEnergy continues to see record amounts of gas imported from Alberta, which is brought into the Province to serve increasing customer loads. Much of the gas imported throughout the summer has been injected into storage facilities within the Province and will be used to serve customers through the winter.
CONSOLIDATED FINANCIAL RESULTS
Consolidated Net Income (Loss)
Three months ended September 30
Six months ended September 30
(millions)
2016
2015 Change
2016
2015 Change
Loss before unrealized market value adjustments Impact of fair value adjustments Revaluation of natural gas in storage
$
(7)
$
(13)
$
6
$
(10)
$
(18)
$
8
10
(6) (1)
16
56 14
(3)
59 14
3
4
-
Consolidated net income (loss)
$
6
$
(20)
$
26
$
60
$
(21)
$
81
Net Income for April through September is typically low as the weather is not cold enough to generate high residential and commercial heating loads. The loss before unrealized market value adjustments was $10 million for the six months ended September 30, 2016, $8 million favourable compared to the $18 million loss in 2015. Delivery and Transportation rate increases effective January 1, 2016 have addressed growing operating cost pressure and are contributing to increased revenues compared to 2015. Operating and maintenance, depreciation and Saskatchewan taxes are increasing compared to 2015, a result of recent growth in the Corporation’s natural gas infrastructure and customer base. Customer capital contributions are lower than 2015 as the provincial economy and residential customer growth has slowed in 2016. The reduced capital requirement for customer connections has also resulted in lower interest expense. The Corporation continues to aggressively manage operating costs, evidenced by decline in employee benefits expense resulting from the Corporation continuing to manage overtime and staffing levels.
4
2016-17 SECOND QUARTER REPORT
Made with FlippingBook Ebook Creator