EXHIBIT 99.1
MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
BALANCE SHEET
As at March 31, 2001
(expressed in thousands of U.S. dollars)
2001
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ASSETS
Current assets
Cash.................................................................. $ 3,782
Accounts receivable
Trade............................................................... 58,173
Related parties..................................................... 2,861
Inventory............................................................. 3,751
Deferred income tax................................................... 1,660
--------
70,227
Property and equipment--net........................................... 52,298
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$122,525
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LIABILITIES AND OWNERS' NET INVESTMENT
Current liabilities
Accounts payable and other accrued liabilities
Trade............................................................... $ 40,125
Related parties..................................................... 16,116
--------
56,241
Deferred income taxes................................................. 2,872
--------
59,113
--------
Commitments and contingencies (Note 2)................................ --
Owners' Net Investment................................................ 63,412
--------
$122,525
========
See notes to the financial statements.
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MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
STATEMENT OF OPERATIONS AND NET INVESTMENT
For the period ended March 31, 2001
(expressed in thousands of U.S. dollars)
2001
--------
Revenues
Crude oil and condensate sales........................................ $129,937
Crude oil and condensate sales--related parties....................... 24,768
Pipeline tariffs...................................................... 2,227
Trucking.............................................................. 3,799
Trucking--related parties............................................. 534
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161,265
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Costs and expenses
Cost of crude oil and condensate sales................................ 104,468
Cost of crude oil and condensate sales--related parties............... 42,711
Pipeline tariff expense............................................... 801
Operating costs....................................................... 6,807
General and administrative............................................ 493
Depreciation and amortization......................................... 700
--------
155,980
--------
Income before income taxes............................................ 5,285
--------
Income tax expense
Current............................................................... 2,180
Deferred.............................................................. 147
--------
2,327
--------
Net income for the year............................................... 2,958
Owners' net investment--Beginning of period........................... 60,454
--------
Owners' net investment--End of period................................. $ 63,412
========
See notes to the financial statements.
2
MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
STATEMENT OF CASH FLOWS
For the period ended March 31, 2001
(expressed in thousands of U.S. dollars)
2001
-------
Cash provided by (used in)
Operating activities
Net income for the year................................................ $ 2,958
Items not affecting cash
Depreciation and amortization........................................ 700
Deferred income tax.................................................. 147
-------
3,805
-------
Net change in non-cash working capital items
Accounts receivable
Trade.............................................................. 5,217
Related party...................................................... 11,675
Inventory............................................................ 1,148
Accounts payable and other accrued liabilities
Trade.............................................................. (10,282)
Related party...................................................... (7,767)
-------
(9)
-------
3,796
-------
Investing activities
Capital expenditures................................................... (14)
-------
Increase in cash for the period........................................ --
Cash--Beginning of period.............................................. --
-------
Cash--End of period.................................................... $ 3,782
=======
See notes to the financial statements.
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MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
NOTES TO FINANCIAL STATEMENTS
March 31, 2001
Note--1 Organization and basis of presentation
The Supply and Transportation business is involved in the pipeline transport
of crude oil and condensates, including associated services of trucking and
terminalling, and marketing of crude oil in Western Canada.
The accompanying financial statements present, in conformity with accounting
principles generally accepted in the United States of America the assets,
liabilities, revenues and expenses related to the historical operations of the
Canadian supply and transportation ("S&T") business of the Murphy Oil Company
Ltd. ("Murphy"). These financial statements should be read in conjunction with
the Murphy S&T financial statements for the year ended December 31, 2000. The
interim financial statements as of March 31, 2001 and for the three months
ended March 31, 2001 is unaudited; however, in the opinion of the S&T Business,
the interim statements includes all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results for the
interim period.
The accompanying financial statements have been prepared from Murphy's
historical accounting records and are presented on a carve-out basis to include
the historical operations applicable to the S&T business. All assets and
liabilities specifically identified with the S&T business have been presented
in the balance sheet. The owner's net investment ("Owner's net investment") in
the S&T business has been presented in lieu of stockholder's equity in the
financial statements. The financial information included herein includes
certain allocations based on historical activity levels to reflect the
financial statements in accordance with accounting principles generally
accepted in the United States of America and may not necessarily reflect the
financial position or results of operations of the S&T business in the future
or had it existed as a separate, stand-alone business during the period
presented. The allocations consist of general and administrative expenses
incurred on behalf of the S&T business by Murphy. This allocation has been made
on a reasonable basis. No amount in respect of interest has been allocated to
this business.
Note--2 Commitments and contingencies
Purchase and sales agreements
The S&T business has entered into evergreen purchase and sales agreements,
cancellable with thirty days notice, for crude oil and condensates. At March
31, 2001, the S&T business had evergreen contracts for purchases of 427,000
m/3/ and sales of 304,000 m/3/ of crude oil and condensates at market related
prices.
Environmental matters
The parent, Murphy is liable for the reclamation costs associated with a
condensate spill on the Dulwich pipeline. The amount of reclamation costs is
dependent upon the method selected under current environmental laws but has
been estimated by management to be in the range of $67,000 to $1,901,000. An
accrual for these clean up costs has not been provided for in these financial
statements.
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MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
NOTES TO FINANCIAL STATEMENTS
Note--3 Segment information
The S&T division's reportable segments are organized into three major types
of business activities all operating within one geographic area, Western
Canada. The pipeline segment derives tariff revenue primarily from the
transportation of crude oil, the crude oil trading segment derives revenue from
the purchase and sale of crude oil and the trucking segment derives revenue
from the use of tractor trailers in hauling petroleum products and water.
Information about business segments is reported on the following tables.
Corporate and other activities are shown in the tables to reconcile the
business segments to the financial statement totals.
Corporate
Crude oil and
Pipelines trading Trucking eliminations Total
--------- --------- -------- ------------ --------
Revenues from external
customers................. $4,902 $129,930 $5,072 $(3,941) $135,963
Revenues from related
parties................... -- 24,768 534 -- 25,302
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Total revenues............. 161,265
Income tax expense......... (132) 2,952 (284) (209) 2,327
Significant non-cash
charges (credits)
Depreciation and
amortization............ 609 -- 91 -- 700
Deferred income taxes.... 147 -- -- -- 147
Additions to property and
equipment................. 14 -- -- -- 14
Property and equipment..... 50,011 -- 2,287 -- 52,298
Net income (loss).......... (169) 3,773 (363) (283) 2,958
Note--4 Subsequent Event
In May 2001, substantially all of the crude oil pipeline, gathering, storage
and terminalling assets of Murphy were acquired by Plains All American
Pipeline, L.P. ("PAA") for approximately $161.0 million in cash. The purchase
price included $6.5 million for excess inventory in the systems. The principle
assets acquired include four pipeline systems covering 275 miles, approximately
1.1 million barrels of crude oil storage and terminalling capacity located
primarily in Kerrobert, Saskatchewan, approximately 254,000 barrels of linefill
and tank bottoms and 121 trailers used primarily for crude oil transportation.
PAA has entered into a new long-term contract with Murphy to continue
transporting its production from fields currently delivering crude oil to these
pipelines systems. The current volume transported for Murphy under the contract
is approximately 11,000 barrels per day. In aggregate, the pipeline systems
transport approximately 200,000 barrels per day of light, medium and heavy
crudes, as well as condensate.
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