The top five independents in Canada beat their top five U.S. counterparts from 1999-2002 on a number of measures, consistently outperforming on return on capital while reporting lower debt, according to an analysis of Evaluate Energy data. In 2002 the Canadians achieved an average 10.6% return on capital versus 5.6% for the American firms. The U.S companies enjoy larger market capitalization, by 50%, largely reflecting the fact that they have much larger gas reserves, totaling 31 trillion cubic feet (Tcf) versus 16 Tcf for their Canadian counterparts. The U.S. companies have outstripped the Canadians in terms of gas-reserve growth. "But despite their smaller reserve base, the Canadians added proportionately more to their reserves through worldwide extensions and discoveries than their U.S. rivals," says Richard Krijgsman, Evaluate Energy founder and chief executive. In raw numbers, the Canadian group added less-2.1 billion barrels of oil equivalent of reserves in the four-year period, while the U.S. group added 3.2 billion BOE. "The crude oil reserve base is comparable, but-perhaps surprisingly in view of the richness of the Albertan gas reserves-their gas reserves are just half the size of the U.S. upstream giants'," says Krijgsman. The London-based firm studied financial and operating results for 1999-2002 for American E&P companies Anadarko Petroleum, Apache, Burlington Resources, Devon Energy and Unocal. These were compared with results for Maple Leaf players EnCana, Canadian Natural Resources, Nexen, Talisman and Husky Energy. Finding costs for both groups were lower when drilling in Canada. Per-barrel production costs were higher in the U.S. than in Canada for the U.S. companies, with the exception of Anadarko. Canadians tend to be more successful driving their local production costs down further than the American visitors, Krijgsman said, with the notable exception of Burlington, which had the lowest production costs in Canada of all 10 companies. Meanwhile, consulting firm Ziff Energy Group recently awarded kudos to Canadian firms at its annual North American Gas Strategies Conference. Those with the lowest operating costs were Burlington Resources Canada, PrimeWest Energy and Real Resources. Those with the best finding and development costs were Husky and Talisman. -Leslie Haines

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