Our Objectives and 2006 Performance
| 1. |
To successfully bring the Stage 3 expansion on-line and achieve full design capacity as quickly as possible
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- The Stage 3 expansion was brought on-line at the end of August 2006. High volume levels have already been achieved over short periods and we now are working toward more stable performance.
- The project was completed about one year behind schedule and the approximate $8.55 billion total cost exceeded the initial $4.1 billion estimate provided in 2001.
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| 2. |
To improve the reliability and performance of our operations
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- Approved, as part of the Syncrude Joint Venture owners group, a Management Services Agreement to enhance Syncrude performance through implementation of Imperial Oil Resources/ExxonMobil global best practices and access to talent.
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| 3. |
To continue to broaden our active role in the stewardship of our Syncrude asset
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- Led the negotiations that resulted in the Management Services Agreement between Imperial Oil Resources and Syncrude Canada Ltd.
- Began marketing our Syncrude production, developing direct relationships
with our customers.
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| 4. |
To strengthen our balance sheet
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- Net debt to total capital decreased to 25% compared to 33% at 2005 year end.
- Net debt decreased to $1.3 billion at 2006 year end from $1.6 billion in 2005 (net debt target revised to $1.6 billion in response to proposed income trust tax changes).
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| 5. |
To pursue our growth strategies
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- Acquired Canada Southern Petroleum Ltd. for $223 million, securing an estimated 927 billion cubic equivalent feet of natural gas resource for a net cost of about $0.20 per thousand cubic feet.
- Purchased Talisman Energy's 1.25% interest in Syncrude for $475 million.
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| 6. |
To grow cash distributions
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- Increased quarterly distribution amounts by 50% to $0.30 per Unit from $0.20 per Unit in early 2006.
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| 7. |
To continue to represent Canada's trust sector
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- Communicated our concerns and recommendations regarding the federal government's proposed income trust tax changes.
- Actively participated in the Canadian Association of Income Funds' discussion on distributable cash disclosure and sustainability.
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