PART I
Item 1. Financial Statements
Condensed Consolidated Statement of Earnings (unaudited)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(US$ millions, except per share amounts) | 2021 | 2020 | 2021 | 2020 | ||||||||
Revenues | (Note 2) | |||||||||||
Product and service revenues | (Note 3) | $ | 2,720 | $ | 1,326 | $ | 7,440 | $ | 3,919 | |||
Gains (losses) on risk management, net | (Note 19) | (950 | ) | (154 ) | (2,176 | ) | 587 | |||||
Sublease revenues | (Note 9) | 19 | 18 | 55 | 53 | |||||||
Total Revenues | 1,789 | 1,190 | 5,319 | 4,559 | ||||||||
Operating Expenses | (Note 2) | |||||||||||
Production, mineral and other taxes | 77 | 47 | 210 | 126 | ||||||||
Transportation and processing | 397 | 365 | 1,194 | 1,129 | ||||||||
Operating | (Notes 16, 17) | 153 | 133 | 466 | 452 | |||||||
Purchased product | 759 | 322 | 2,096 | 1,039 | ||||||||
Depreciation, depletion and amortization | 297 | 406 | 916 | 1,433 | ||||||||
Impairments | (Note 8) | - | 1,336 | - | 4,863 | |||||||
Accretion of asset retirement obligation | 5 | 8 | 17 | 26 | ||||||||
Administrative | (Notes 15, 16, 17) | 101 | 79 | 346 | 297 | |||||||
Total Operating Expenses | 1,789 | 2,696 | 5,245 | 9,365 | ||||||||
Operating Income (Loss) | - | (1,506 ) | 74 | (4,806 ) | ||||||||
Other (Income) Expenses | ||||||||||||
Interest | (Notes 4, 10) | 77 | 97 | 263 | 279 | |||||||
Foreign exchange (gain) loss, net | (Notes 5, 19) | - | (25 ) | (15 | ) | 51 | ||||||
Other (gains) losses, net | (Notes 6, 10, 17) | (6 | ) | (18 ) | (31 | ) | (48 ) | |||||
Total Other (Income) Expenses | 71 | 54 | 217 | 282 | ||||||||
Net Earnings (Loss) Before Income Tax | (71 | ) | (1,560 ) | (143 | ) | (5,088 ) | ||||||
Income tax expense (recovery) | (Note 6) | 1 | (39 ) | (175 | ) | 395 | ||||||
Net Earnings (Loss) | $ | (72 | ) | $ | (1,521 ) | $ | 32 | $ | (5,483 ) | |||
Net Earnings (Loss) per Share of Common Stock | (Note 12) | |||||||||||
Basic | $ | (0.28 | ) | $ | (5.85 ) | $ | 0.12 | $ | (21.10 ) | |||
Diluted | (0.28 | ) | (5.85 ) | 0.12 | (21.10 ) | |||||||
Weighted Average Shares of Common Stock Outstanding (millions) | (Note 12) | |||||||||||
Basic | 261.1 | 259.8 | 260.7 | 259.8 | ||||||||
Diluted | 261.1 | 259.8 | 265.3 | 259.8 |
Condensed Consolidated Statement of Comprehensive Income (unaudited)
Three Months Ended | Nine Months Ended | ||||||||||
September 30, | September 30, | ||||||||||
(US$ millions) | 2021 | 2020 | 2021 | 2020 | |||||||
Net Earnings (Loss) | $ | (72 | ) | $ | (1,521 ) | $ | 32 | $ | (5,483 ) | ||
Other Comprehensive Income (Loss), Net of Tax | |||||||||||
Foreign currency translation adjustment | (Note 13) | (48 | ) | 26 | (4 | ) | (21 ) | ||||
Pension and other post-employment benefit plans | (Notes 13, 17) | (1 | ) | (2 ) | (4 | ) | (1 ) | ||||
Other Comprehensive Income (Loss) | (49 | ) | 24 | (8 | ) | (22 ) | |||||
Comprehensive Income (Loss) | $ | (121 | ) | $ | (1,497 ) | $ | 24 | $ | (5,505 ) |
See accompanying Notes to Condensed Consolidated Financial Statements
1
Condensed Consolidated Balance Sheet (unaudited)
As at | As at | |||||
September 30, | December 31, | |||||
(US$ millions) | 2021 | 2020 | ||||
Assets | ||||||
Current Assets | ||||||
Cash and cash equivalents | $ | 8 | $ | 10 | ||
Accounts receivable and accrued revenues (net of allowances | ||||||
of $3 million (2020: $4 million)) | (Note 3) | 1,221 | 928 | |||
Risk management | (Notes 18, 19) | 1 | 37 | |||
Income tax receivable | (Note 6) | 98 | 272 | |||
1,328 | 1,247 | |||||
Property, Plant and Equipment, at cost: | (Note 8) | |||||
Oil and natural gas properties, based on full cost accounting | ||||||
Proved properties | 54,684 | 53,883 | ||||
Unproved properties | 2,217 | 2,962 | ||||
Other | 897 | 911 | ||||
Property, plant and equipment | 57,798 | 57,756 | ||||
Less: Accumulated depreciation, depletion and amortization | (49,208 | ) | (48,306 ) | |||
Property, plant and equipment, net | (Note 2) | 8,590 | 9,450 | |||
Other Assets | 1,094 | 1,143 | ||||
Risk Management | (Notes 18, 19) | - | 4 | |||
Goodwill | (Note 2) | 2,624 | 2,625 | |||
(Note 2) | $ | 13,636 | $ | 14,469 | ||
Liabilities and Shareholders' Equity | ||||||
Current Liabilities | ||||||
Accounts payable and accrued liabilities | $ | 1,866 | $ | 1,704 | ||
Current portion of operating lease liabilities | 63 | 68 | ||||
Income tax payable | 4 | 3 | ||||
Risk management | (Notes 18, 19) | 1,418 | 130 | |||
Current portion of long-term debt | (Note 10) | - | 518 | |||
3,351 | 2,423 | |||||
Long-Term Debt | (Note 10) | 4,791 | 6,367 | |||
Operating Lease Liabilities | 900 | 938 | ||||
Other Liabilities and Provisions | (Note 11) | 215 | 358 | |||
Risk Management | (Notes 18, 19) | 246 | 125 | |||
Asset Retirement Obligation | 336 | 401 | ||||
Deferred Income Taxes | - | 20 | ||||
9,839 | 10,632 | |||||
Commitments and Contingencies | (Note 21) | |||||
Shareholders' Equity | ||||||
Share capital - authorized 775 million shares of stock | ||||||
2021 issued and outstanding: 261.1 million shares (2020: 259.8 million shares) | (Note 12) | 3 | 3 | |||
Paid in surplus | (Note 12) | 8,553 | 8,531 | |||
Retained earnings (Accumulated deficit) | (5,827 | ) | (5,773 ) | |||
Accumulated other comprehensive income | (Note 13) | 1,068 | 1,076 | |||
Total Shareholders' Equity | 3,797 | 3,837 | ||||
$ | 13,636 | $ | 14,469 |
See accompanying Notes to Condensed Consolidated Financial Statements
2
Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited)
Retained | Accumulated | ||||||||||||||||||
Earnings | Other | Total | |||||||||||||||||
Share | Paid in | (Accumulated | Comprehensive | Shareholders' | |||||||||||||||
Three Months Ended September 30, 2021 (US$ millions) | Capital | Surplus | Deficit) | Income | Equity | ||||||||||||||
Balance, June 30, 2021 | $ | 3 | $ | 8,532 | $ | (5,718 | ) | $ | 1,117 | $ | 3,934 | ||||||||
Net Earnings (Loss) | - | - | (72 | ) | - | (72 | ) | ||||||||||||
Dividends on Shares of Common Stock ($0.14 per share) | (Note 12) | - | - | (37 | ) | - | (37 | ) | |||||||||||
Equity-Settled Compensation Costs | - | 21 | - | - | 21 | ||||||||||||||
Other Comprehensive Income (Loss) | (Note 13) | - | - | - | (49 | ) | (49 | ) | |||||||||||
Balance, September 30, 2021 | $ | 3 | $ | 8,553 | $ | (5,827 | ) | $ | 1,068 | $ | 3,797 | ||||||||
Retained | Accumulated | ||||||||||||||||||
Earnings | Other | Total | |||||||||||||||||
Share | Paid in | (Accumulated | Comprehensive | Shareholders' | |||||||||||||||
Three Months Ended September 30, 2020 (US$ millions) | Capital | Surplus | Deficit) | Income | Equity | ||||||||||||||
Balance, June 30, 2020 | $ | 3 | $ | 8,460 | $ | (3,590 ) | $ | 1,000 | $ | 5,873 | |||||||||
Net Earnings (Loss) | - | - | (1,521 ) | - | (1,521 ) | ||||||||||||||
Dividends on Shares of Common Stock ($0.09375 per share) | (Note 12) | - | - | (24 ) | - | (24 ) | |||||||||||||
Other Comprehensive Income (Loss) | (Note 13) | - | - | - | 24 | 24 | |||||||||||||
Balance, September 30, 2020 | $ | 3 | $ | 8,460 | $ | (5,135 ) | $ | 1,024 | $ | 4,352 |
See accompanying Notes to Condensed Consolidated Financial Statements
3
Condensed Consolidated Statement of Changes in Shareholders' Equity (unaudited)
Retained | Accumulated | |||||||||||||||||||
Earnings | Other | Total | ||||||||||||||||||
Share | Paid in | (Accumulated | Comprehensive | Shareholders' | ||||||||||||||||
Nine Months Ended September 30, 2021 (US$ millions) | Capital | Surplus | Deficit) | Income | Equity | |||||||||||||||
Balance, December 31, 2020 | $ | 3 | $ | 8,531 | $ | (5,773 | ) | $ | 1,076 | $ | 3,837 | |||||||||
Net Earnings (Loss) | - | - | 32 | - | 32 | |||||||||||||||
Dividends on Shares of Common Stock ($0.3275 per share) | (Note 12) | - | - | (86 | ) | - | (86 | ) | ||||||||||||
Equity-Settled Compensation Costs | - | 22 | - | - | 22 | |||||||||||||||
Other Comprehensive Income (Loss) | (Note 13) | - | - | - | (8 | ) | (8 | ) | ||||||||||||
Balance, September 30, 2021 | $ | 3 | $ | 8,553 | $ | (5,827 | ) | $ | 1,068 | $ | 3,797 | |||||||||
Retained | Accumulated | |||||||||||||||||||
Earnings | Other | Total | ||||||||||||||||||
Share | Paid in | (Accumulated | Comprehensive | Shareholders' | ||||||||||||||||
Nine Months Ended September 30, 2020 (US$ millions) | Capital | Surplus | Deficit) | Income | Equity | |||||||||||||||
Balance, December 31, 2019 | $ | 7,061 | $ | 1,402 | $ | 421 | $ | 1,046 | $ | 9,930 | ||||||||||
Net Earnings (Loss) | - | - | (5,483 ) | - | (5,483 ) | |||||||||||||||
Dividends on Shares of Common Stock ($0.28125 per share) | (Note 12) | - | - | (73 ) | - | (73 ) | ||||||||||||||
Other Comprehensive Income (Loss) | (Note 13) | - | - | - | (22 ) | (22 ) | ||||||||||||||
Reclassification of Share Capital | (Note 12) | (7,058 ) | 7,058 | - | - | - | ||||||||||||||
Balance, September 30, 2020 | $ | 3 | $ | 8,460 | $ | (5,135 ) | $ | 1,024 | $ | 4,352 |
See accompanying Notes to Condensed Consolidated Financial Statements
4
Condensed Consolidated Statement of Cash Flows (unaudited)
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
(US$ millions) | 2021 | 2020 | 2021 | 2020 | ||||||||
Operating Activities | ||||||||||||
Net earnings (loss) | $ | (72 | ) | $ | (1,521 ) | $ | 32 | $ | (5,483 ) | |||
Depreciation, depletion and amortization | 297 | 406 | 916 | 1,433 | ||||||||
Impairments | (Note 8) | - | 1,336 | - | 4,863 | |||||||
Accretion of asset retirement obligation | 5 | 8 | 17 | 26 | ||||||||
Deferred income taxes | (Note 6) | 1 | (42 ) | (19 | ) | 393 | ||||||
Unrealized (gain) loss on risk management | (Note 19) | 579 | 243 | 1,426 | 18 | |||||||
Unrealized foreign exchange (gain) loss | (Note 5) | 14 | (21 ) | 20 | 30 | |||||||
Foreign exchange on settlements | (Note 5) | (3 | ) | (2 ) | (12 | ) | 18 | |||||
Other | 24 | (9 ) | 88 | (61 ) | ||||||||
Net change in other assets and liabilities | (10 | ) | (47 ) | (21 | ) | (167 ) | ||||||
Net change in non-cash working capital | (Note 20) | (23 | ) | 142 | (58 | ) | 106 | |||||
Cash From (Used in) Operating Activities | 812 | 493 | 2,389 | 1,176 | ||||||||
Investing Activities | ||||||||||||
Capital expenditures | (Note 2) | (365 | ) | (351 ) | (1,098 | ) | (1,393 ) | |||||
Acquisitions | (Note 7) | - | (1 ) | (3 | ) | (19 ) | ||||||
Proceeds from divestitures | (Note 7) | (8 | ) | 39 | 1,017 | 69 | ||||||
Net change in investments and other | 6 | 68 | (36 | ) | (74 ) | |||||||
Cash From (Used in) Investing Activities | (367 | ) | (245 ) | (120 | ) | (1,417 ) | ||||||
Financing Activities | ||||||||||||
Net issuance (repayment) of revolving long-term debt | (Note 10) | - | (100 ) | (950 | ) | 452 | ||||||
Repayment of long-term debt | (Note 10) | (518 | ) | (109 ) | (1,137 | ) | (224 ) | |||||
Dividends on shares of common stock | (Note 12) | (37 | ) | (24 ) | (86 | ) | (73 ) | |||||
Finance lease payments and other | (2 | ) | (23 ) | (98 | ) | (67 ) | ||||||
Cash From (Used in) Financing Activities | (557 | ) | (256 ) | (2,271 | ) | 88 | ||||||
Foreign Exchange Gain (Loss) on Cash, Cash Equivalents | ||||||||||||
and Restricted Cash Held in Foreign Currency | (2 | ) | 1 | - | (5 ) | |||||||
Increase (Decrease) in Cash, Cash Equivalents and Restricted Cash | (114 | ) | (7 ) | (2 | ) | (158 ) | ||||||
Cash, Cash Equivalents and Restricted Cash, Beginning of Period | 122 | 39 | 10 | 190 | ||||||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 8 | $ | 32 | $ | 8 | $ | 32 | ||||
Cash, End of Period | $ | 7 | $ | 22 | $ | 7 | $ | 22 | ||||
Cash Equivalents, End of Period | 1 | 10 | 1 | 10 | ||||||||
Restricted Cash, End of Period | - | - | - | - | ||||||||
Cash, Cash Equivalents and Restricted Cash, End of Period | $ | 8 | $ | 32 | $ | 8 | $ | 32 | ||||
Supplementary Cash Flow Information | (Note 20) | |||||||||||
See accompanying Notes to Condensed Consolidated Financial Statements |
5
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