Financial Ratios & Key Indicators

Consolidated Financial Ratios
The following financial ratios are provided in connection with the Company’s shelf prospectuses filed with Canadian and US securities regulatory authorities and are based on the Company’s consolidated financial statements that are prepared in accordance with accounting principles generally accepted in Canada.

The asset coverage ratios are calculated as at December 31, 2004. The interest coverage ratios are for the 12-month period then ended.
December 31, 2004 Preferred Securities
as Equity5		 Preferred Securities
as Debt6
Interest coverage (times)    
Income1 6.97 6.40
cash flow2 20.81 19.13
Asset coverage (times)    
Before deductions of future income taxes and deferred credits3 4.38 4.38
After deduction of future income taxes and deferred credits4 2.97 2.97

  1. Net income plus income taxes and interest expense; divided by the sum of interest expense and capitalized interest.
  2. Cash flow plus current income taxes and interest expense; divided by the sum of interest expense and capitalized interest.
  3. Total assets minus current liabilities; divided by long-term debt.
  4. Total assets minus current liabilities and long-term liabilities excluding long-term debt; divided by long-term debt.
  5. The Company’s preferred securities, which were redeemed during 2004, were classified as equity and the related charges have been excluded from interest expense.
  6. Reflects adjusted ratios, had the preferred securities been treated as debt and the related charges been included in interest expense.

Ratios and Key Indicators

(millions of Canadian dollars unless otherwise stated)

Years ended December 31 2004 2003 2002 2001 2000 1999 1998 1997 1996 1995
Net income 663  1,012  544  751  887  266 (322) 57  92  35 
Cash flow1 2,931  2,729  2,645  2,494  2,413  1,111  631  797  697  502 
Exploration and development spending 2,538  2,180  1,848  1,882  1,179  996  1,145  951  557  379 
Net acquisitions and (dispositions) 242  668  204  139  350  349  (92) 55  161  7 
Debt/debt+equity(%) 34  31  40  42  32  38  50  45  30  36 
Debt/cash flow (times) 0.84  0.81  1.13  1.20  0.72  1.98  3.31  2.18  1.29  1.80 
Per common share (dollars)  
Net income (loss) ($) 1.77 2.56  1.29  1.80  2.09  0.67  (0.96) 0.17  0.30  0.14 
Cash flow ($) 1 7.65  7.07  6.58  6.16  5.84  2.97  1.88  2.43  2.24  1.73 
Production (boe) 0.42  0.38  0.40  0.38  0.36  0.30  0.29  0.27  0.24  0.23 
Proved gross reserves(at year end)(boe) 4.0  3.5  3.8  3.7  2.9  2.6  2.5  2.3  1.9  1.7 
Average royalty rate (%) 16  16  17  20  18  16  14  18  16  14 
Unit operating costs ($/boe) 7.04  6.74  6.06  5.79  5.19  5.14  5.61  5.24  3.78  3.42 
Unit DD&A ($/boe) 10.29  9.87  8.99  8.39  7.37  7.54  6.03  6.08  5.60  5.52 
Return on capital employed(%)2 10.6  14.9  9.0  13.7  17.6  6.9  (6.5) 2.6  5.0  3.5 
Return on active capital employed (%)3 12.3  17.3  10.8  16.8  20.8  8.6 (8.8) 3.4  6.1  4.1 
Return on equity(%)4 13.5  21.1  12.4  19.2  24.4  9.2  (15.0) 2.7  4.9  2.2 
  1. Non-GAAP measure. See advisory on page 24.
  2. Net income plus tax effected interest/(average shareholders’ equity + average debt).
  3. Net income plus tax effected interest/(average shareholders’ equity + average debt - average non-depleted capital).
  4. Net income/average shareholders’ equity.