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The Globe and Mail

Petrobank reports lower fourth-quarter profit

The Surmont oil sands project, co-owned by ConocoPhillips and Total.

Nathan VanderKlippe/The Globe and Mail/Nathan VanderKlippe/The Globe and Mail

Petrobank Energy and Resources Ltd. said Tuesday its fourth-quarter profit was down sharply from the same period a year ago and that it spent more on its Western Canadian oil projects.

Earnings from continuing operations was $1.3-million, a 94 per cent decline from the $20.7-million it reported in the same quarter of 2009.

The profits amounted to a 1 cent a share, compared with 22 cents a year earlier.

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Taking into account the results from Petrominerales, the South American subsidiary Petrobank spun off late last year, the Calgary-based company booked a loss of $35.6-million or 34 cents a share, compared with a profit of $57.1-million or 61 cents in the year-earlier period.

Quarterly revenues dropped to $258.4-million from $276.2-million.

Total capital expenditures were $300.3-million, up from $192.8-million in the fourth quarter of 2009 as spending ramped up on Petrobank's oil projects in Alberta and Saskatchewan.

On its heavy oil properties, Petrobank uses its patented Toe-to-Heel Air Injection, or THAI, method to extract the bitumen. In that process, air is injected deep underground to ignite a flame in the reservoir. The heat softens the gooey bitumen enough for it to flow to the surface.

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