GREY:AVNDF - Post by User
Post by
Kisuon Oct 18, 2012 10:03am
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Post# 20497487
Excerpt from 2nd Qtr Report
Excerpt from 2nd Qtr Report supports a shift from oil/gas production to handling and rail shipment:
The Elbow River results were well ahead of second quarter 2011 results with funds from operations of $4.5 million
versus $1.9 million in the same quarter of 2011. The quarter benefited from strong crude oil by rail shipments. Heavy
fuel oils and refined products were also at expectations while LPG sales were lower on weaker butane sales. The
quarter’s net income included unrealized losses on financial instruments of $15.2 million on AvenEx’s hedged forward
sales as a result of changes in the underlying product commodity prices. The loss impacts net income but not funds
from operations as the gains or losses reverse in the next period when the physical transactions occur. The third
quarter is expected to be very solid with results similar to the same quarter of 2011 due to continued strong forecast
demand for crude by rail. Crude oil is now expected to be Elbow River’s largest product sales segment passing
butane as the traditional sales leader. The third quarter of 2012 will also mark Elbow River’s initial physical asset
ownership with an investment in a rail handling facility in north-west Alberta. The facility will enable Elbow River to
initially ship an additional 2,000 Bbls/d of heavy crude in late third quarter with the ability to expand to handle up to
10,000 Bbls/d if demand continues and rail cars can be sourced.