Enbridge Inc. Q1 2010 Earnings Call Transcript

Enbridge Inc. Q1 2010 Earnings Call Transcript
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Enbridge Inc. (ENB)

Q1 2010 Earnings Call

May 5, 2010 9:00 AM ET

Executives

Vern Yu – Investor Relations

Pat Daniel – President and CEO

Richard Bird – EVP, Chief Financial Officer and Corporate Development

Colin Gruending – VP and Controller

Analysts

Robert Kwan – RBC Capital Markets

Sam Kanes – Scotia Capital

Andrew Kuske – Credit Suisse

Matthew Akman – Macquarie

Bob Hastings – Canaccord

Petro Panarites - CIBC World Markets

Steven Paget – FirstEnergy

Sam Kanes – Scotia Capital

Linda Ezergailis – TD Newcrest

Carrie Tait - National Post

Jeff Lewis - Venture Publishing

Presentation

Operator

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Good morning, ladies and gentlemen. And welcome to the Enbridge Incorporated First Quarter 2010 Financial Results Conference Call. I would now like to turn the meeting over to Mr. Vern Yu. Sir, you may proceed.

Vern Yu

Great. Thank you. Good morning. And welcome to Enbridge Inc.’s 2010 Q1 earnings call. With me this morning are Pat Daniel, President and Chief Executive Officer; Richard Bird, Executive Vice President and Chief Financial Officer and Corporate Development; and Colin Gruending, Vice President and Controller.

Before we begin I’d like to point out that we may refer to forward-looking information during the call. By its nature, this information applies certain assumptions and expectations about future outcomes, so we remind you it is subject to risks and uncertainties affecting every business including ours.

Our slides include a summary of more significant factors and risks that may affect the future outcomes for Enbridge, which are fully disclosed in our public disclosure filings available on both SEDAR and Edgar.

The call is webcast, I encourage those listening by phone to view the supporting slides on our website at www.enbridge.com/investor. A replay and podcast of the call will be available later today, and a transcript will be posted shortly thereafter.

The Q&A format will be the same as we’ve done most recently. The initial Q&A will be restricted to the analyst community and once we are completed we will invite questions from the media.

Finally, I’d like to remind everyone that both Pat Murray and I are available after the call, if you have any detail follow-up question.

With that, I’d like to turn the call over to Pat Daniel.

Pat Daniel

Great. Thanks, Vern, and good morning, everyone. Thank you for joining us on a very snowy Calgary day to review our first quarter results. We were very pleased to announce just a few short hours ago adjusted earnings for the first quarter of 2010 of $318 million, or $0.86 per share, which is a 16% increase in earnings per share over last year.

These results now place us well on our way to meeting our 2010 guidance range of $2.50 to $2.70 per share. Richard of course, he’s going to walk you through the results in a little more detail shortly. But first let me talk to those areas where we see some very substantial opportunities for further growth in the future.

Over the last seven or eight months, we’ve been referring really to four key areas, where we’re seeing substantial activity and potential for growth, and where Enbridge also enjoys strong strategic advantage through the existing infrastructure that we have in our proven expertise in those areas.

The areas that I’m referring to include the Alberta regional oil sounds, the ultra deep offshore oil and gas, North American oil and gas shale plays and then our newest business unit, renewable and green energy.

Let me go through those one by one, starting, first of all, in the oil sands. We’ve been very encouraged with the continued series of announcements from major producers of the advanced new or expanded projects in the oil sands, examples like Statoil. We’re ramping up operations at their Leismer site, announcements by Cenovus and Conoco Phillips are going ahead with future phases of Christina Lake.

As you’re aware Enbridge has won the business to serve both of those projects. When you add the Leismer and Christina Lake projects to our work on the Woodland Pipeline to connect Imperial Oil, Kearl project, Enbridge has now secured three oil sands related projects in less than a year.

With renewed activity and production forecast by major producers including Suncor, Husky and [Sunrise] that just to name a few, you can expect to hear more from us as we continue to pursue additional opportunities.

Our existing regional infrastructure gives us a strategic advantage in terms of being able to scale solutions to their near, medium and long-term needs. So just to give you an example of that, in the near-term, as the initial phases of large-scale projects come on stream, Enbridge is able to offer bridging capacity that minimizes capacity commitments by the customer.

And then as production grows and as new phases are brought into service, we have the ability to expand our services up to and including transportation on a fully dedicated pipeline.

This kind of flexibility is a direct result of having the most comprehensive system in the area that is very cost effective expansion options in order to accommodate new volumes as and when they come on stream.

Much like the oil sands region, there have been numerous announcements in the U.S. Gulf Coast ultra deepwater in the past year. As you know, we have announced 750 million in new projects to connect both the Jack, St. Malo and Big Foot gas projects into our existing gas pipeline systems.

As the primary transporter of ultra deep gas and a proven player in construction and operation of ultra deep facilities, we have an advantage when bidding on new projects in that area.

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