EXHIBIT 99.1
MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
Balance Sheet
AS AT MARCH 31, 2001
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(expressed in thousands of U.S. dollars)
2001
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
--------
$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
OWNERS' NET INVESTMENT 63,412
--------
$122,525
========
COMMITMENTS AND CONTINGENCIES (Note 2)
See notes to the financial statements.
MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
Statement of Operations and Net Investment
FOR THE PERIOD ENDED MARCH 31, 2001
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(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
--------
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
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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
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OWNERS' NET INVESTMENT - END OF PERIOD $ 63,412
========
</Table>
See notes to the financial statements.
MURPHY OIL COMPANY LTD.
SUPPLY & TRANSPORTATION BUSINESS
Statement of Cash Flows
FOR THE PERIOD ENDED MARCH 31, 2001
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(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
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INVESTING ACTIVITIES
Capital expenditures (14)
--------
INCREASE IN CASH FOR THE PERIOD --
CASH - BEGINNING OF PERIOD --
--------
CASH - END OF PERIOD $ 3,782
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</Table>
See notes to the financial statements.
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 U.S. generally accepted accounting principles 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.
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 m3 and sales of 304,000 m3 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.
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.
<Table>
<Caption>
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
</Table>
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 Pipelines, 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 200,000 barrels of linefill 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 aggregrate, the
pipeline systems transport approximately 200,000 barrels per day of light,
medium and heavy crudes, as well as condensate.