CBC News (Canada): Shell Canada taking $128M in Q4 charges (ShellNews.net) Posted 18 Jan 05

Last Updated Mon, 17 Jan 2005 16:09:23 EST

CALGARY - Shell Canada said Monday it will take $128 million in charges on its fourth-quarter earnings when it reports its financial results on Jan. 27.

The company said the bulk of the charge – roughly $71 million after tax will be to cover employee stock options.

Shell also said it will expense $32 million after tax related to development costs for the Mackenzie Delta gas project. The company said it has decided to write off front-end expenditures on projects with long lead times.

"The company remains optimistic about the potential for Mackenzie Delta gas production by the end of the decade," Shell said, noting that regulatory applications were filed during the fourth quarter.

Another $15-million charge will go to cover the cost of drilling an exploration well in the Sable Island sub-basin.

The company will also take a $10 million after-tax charge to reverse an earlier decision extending the anticipated life of the Scotford heavy-oil upgrader near Fort Saskatchewan, Alta., to 40 years from the original 30 years.

Shell Canada shares were off a penny at $79.20 on the TSX on Monday.