Oil prices boost BP Canada’s income up in third quarter

The third-quarter income of BP Canada (TSE) got a boost from higher oil prices and the sale of its 30% stake in the Mt. Milligan copper-gold joint venture in British Columbia. BP’s net income for the three months ended Sept. 30 was $50.2 million (99 cents per share) on revenue of $110.9 million, up sharply from $2 million (4 cents per share) on revenue of $95 million in the year-earlier period.

During the quarter, the company recorded a before-tax gain of $72.8 million on the sale of its interest in the Mt. Milligan project. Higher market prices for oil also contributed to BP’s higher earnings.

Net operating income at Les Mines Selbaie in Quebec was up $1.1 million for the quarter, while sales of copper rose 41% due to higher grades. However, zinc and silver sales were down 3% and 4% respectively due to lower recoveries as a result of soluble copper in mill feed from the open pit. Gold production from BP’s 76% owned Hope Brook Gold (TSE) operation in Newfoundland rose to the highest level on record at 34,571 oz. for the quarter. But, the mine continues to operate at slightly above break-even before interest charges.

With mill modifications made to reject troublesome mafic inclusions in the ore, the mill is now able to achieve higher rates of throughput. Meanwhile, a new effluent treatment system began operation on an interim basis during September and will be in full operation this month, the company said.

A recent proposal by Hope Brook management for a first contract with the United Steelworkers of America has been rejected by the union membership and discussions are continuing in the hopes of avoiding a strike.

Subsequent to the third quarter, the company announced that it has agreed to sell its non-material and non-strategic oil and gas assets for $84 million.