Enbridge Chief Executive Pat Daniel said he still believes
Kitimat, with its sheltered deep-water harbor, is the best
terminus for the controversial C$5.5 billion ($5.5 billion)
pipeline, citing extensive studies done for the regulatory
application.

However, he told a conference call on Enbridge’s
fourth-quarter results that the company will take another look
at the port of Prince Rupert, which it had ruled out earlier
because it would require the pipeline right-of-way to extend in
a narrow passage for about 80 kms (50 miles) along the Skeena
River.

“Recently, I have indicated that we will re-examine that to
see whether there is another way to get to Prince Rupert, but
all of our engineering and environmental studies continue to
point in the direction of Kitimat being the best alternative,”
Daniel said. “We want to make sure that we have thoroughly
evaluated any and all routing opportunities.”

Prince Rupert is about 110 km (69 miles) north of Kitimat on
the British Columbia coast.

Under the current proposal, the pipeline would carry 525,000
barrels of oil sands-derived crude 1,177 km (731 miles) across
the Rocky Mountains to Kitimat from near Edmonton, Alberta.
Public hearings into the project began last month and a record
number of people have registered to participate.

The project is aimed at lifting returns for Canadian oil
sands producers by allowing large volumes to be shipped to more
lucrative Asian markets. It gained urgency after TransCanada
Corp’s proposed Keystone XL pipeline from the Alberta
oil sands to Texas stalled due to Washington’s refusal to
approve it within a tight deadline set by the U.S. Congress.

However, several aboriginal communities along the proposed
route and numerous environmental groups have said they do not
want Northern Gateway to proceed.

Daniel said Enbridge has not acquired any options to buy
docklands in Prince Rupert. Kitimat is not devoid of industrial
development, and several proposals to build liquefied natural
gas terminals have not attracted the same level of opposition
that Northern Gateway has.

Uncertainty over the eventual fate of the proposal has
prompted FirstEnergy Capital Corp analyst Steven Paget to hold
off putting forecasts for spending or cash flow for the project
into his financial models for Enbridge, which he said is rare
for a development that has committed shippers.

He said he did not know if changing the route would remove
any opposition.

“I would say if Enbridge believes it will make a material
difference to the chances of this project going ahead they will
do it, they will find away to amend the application,” Paget
said. “But it’s very difficult to tell if moving it to Prince
Rupert would change much.”

Northern Gateway is one of several projects Enbridge, the
main mover of Canadian crude exports to the United States, is
planning as a way to diversify markets.

The company said it has extended by a week an “open season”
to gauge shipper support for its Flanagan South pipeline project
in the U.S. Midcontinent as some customers have asked for
longer-term commitments.

Flanagan South is part of the Gulf Coast Access project,
which also includes the Seaway pipeline, now going through a
project to reverse its direction so that it will flow to Texas
refineries from Cushing, Oklahoma. Interest is strong, Daniel
said.

The reversed Seaway pipeline is expected to start moving
150,000 barrels a day of oil by June, eventually rising to
400,000 bpd.

In the fourth quarter, Enbridge, which also operates natural
gas pipelines, a gas distribution business as well as wind
farms, earned C$335 million, or 44 Canadian cents a share, up
from C$326 million, or 43 Canadian cents a share, a year
earlier.

On an adjusted basis, it earned 37 Canadian cents a share.

Revenue rose 31 percent to C$5.44 billion.

Analysts on average had expected earnings of 39 Canadian
cents a share, on revenue of C$4.41 billion, according to
Thomson Reuters I/B/E/S.

Enbridge shares were down C$1.41, or 3.6 percent, at C$37.79
on Friday. They had climbed 37 percent in the past year.

Nexen, which reported a sharp drop in fourth-quarter profit
on Thursday, due partly to changes to its oil sands strategy,
said it did not have a firm timetable for hiring a CEO to
replace Marvin Romanow, who left abruptly last month.

“The board has a search committee with respect to the CEO,”
interim chief Kevin Reinhart told analysts. “They have engaged a
search firm, and they’re going through the process right now of
defining what they would like in a CEO relative to what they
believe Nexen needs at this point in time.”

Problems at Long Lake, the C$6.1 billion ($6.1 billion) oil
sands production and upgrading development, have plagued
Calgary-based Nexen since it started up more than three years
ago. It was just one of a host of problems that pressured shares
in the company in 2011.

The company said on Thursday that the plant, which has a
capacity of 58,500 barrels a day, has been producing 35,000 bpd
recently, up from 31,500 in the fourth quarter.

The upgrader turns bitumen from the oil sands into
refinery-ready light oil. Filling it has been a focus for Nexen
and its minority partner, China’s CNOOC Ltd.

Last year, Nexen set a plan to drill dozens of wells to
allow it to do so. Twelfth and 13th “pads”, or groupings of
wells to inject steam into the ground and pump oil to the
surface, are expected to start producing before the end of the
year.

They are aimed at tapping rich desposits after earlier
efforts hit “lean zones” that led to disappointing production.

“The drilling is done. And that confirmed that we’re in the
good quality reservoir that we had expected to be at,” Reinhart
said.

Nexen has shifted its plans for Long Lake to keep bitumen
production growing, but not necessarily match it in lockstep
with upgrading capacity as the returns for such processing have
weakened since Long Lake began operations. That led to a hefty
charge to earnings.

At Buzzard, the largest oil field in the British sector of
the North Sea, production is averaging about 185,000 barrels a
day, representing up-time of about 85 percent. The company aims
to push that to 90 percent over the next two years after lengthy
unplanned outages in 2011.

The company’s shares were up 69 Canadian cents, or nearly 4
percent, at C$19.63 on the Toronto Stock Exchange on Thursday.
They had been down more than 20 percent in the past 12 months.

In the fourth quarter, Nexen earned C$43 million, or 8
Canadian cents a share, down from year-earlier C$160 million, or
30 Canadian cents a share.

Results were hampered by a drop in production and one-time
charges totaling C$317 million. They included a C$190 million
charge from the shift in its oil sands upgrading plans and C$127
million impairment charge related to its natural gas assets in
Canada and the United States as prices from the fuel languish.

Cash flow, a glimpse into the company’s ability to fund
operations, rose 5 percent to C$585 million, or C$1.11 a share.

Average daily production, before royalties, fell 15 percent
to 208,000 barrels of oil equivalent a day in the quarter.

Talisman, which reported weaker than expected fourth-quarter
results, now expects to run just three rigs in the Marcellus
area of the northeastern United States in 2012, with gas prices
forecast to remain at levels below $4 per million British
thermal units for at least another year.

As recently as last month, the company had said it would run
between four and seven rigs on the Pennsylvania lands, down from
11 in 2011.

“As a result, total capital expenditure in the Marcellus
will reduce from the $1.2 billion we spent last year to around
$600 million this year, which includes significant
infrastructure buildout as we move east (in the region),” CEO
John Manzoni told analysts.

Production there should hover around 500 million cubic feet
a day, up from about 485 million at the end of last year, he
said.

The company is among several that have cut back on dry gas
activity, and shifted capital to areas offering more valuable
liquids-rich gas output, as North American markets remain
oversupplied, due partly to the shale gas production revolution.

It is increasing activity in such areas as the liquids-rich
Eagle Ford area of Texas, where it is a partner with Norway’s
Statoil. There, it will run 14 rigs by the end of the
year, Manzoni said.

With the shift to such plays, overall output is expected to
increase by up to 5 percent in 2012, compared with a 9 percent
increase in 2011.

“I really see no value in chasing unprofitable growth while
gas prices remain so low,” Manzoni said.

Company-wide exploration and production spending is budgeted
at $4 billion, down from $4.5 billion last year.

Talisman shares were up 54 Canadian cents, or 4 percent, at
C$13.06 on the Toronto Stock Exchange. They had lost about a
quarter of their value in six months.

“From a strategic point, I think the shifting from natural
gas to oil and oil liquids is positive news, which I think would
be positive to their free cash flow and margins,” said analyst
Imran Pervaiz of Accountability Research. “I don’t think the
market has fully appreciated that.”

Manzoni squelched any hope that the troublesome Yme project
in the Norwegian North Sea would start up this year, citing
continued delays by the platform contractor.

The company is in talks with the contractor, SBM Offshore
, with the aim of improving productivity to complete
the 40,000 bpd project, which is well behind schedule. Manzoni
said he can “see a path forward” with the development, however.

In the fourth quarter, the company lost a net $117 million,
or 11 cents a share, compared with a year-ago loss of $350
million, or 34 cents a share, with the loss owing to a host of
one-time items

Excluding unusual items, earnings were $114 million, or 11
cents a share. That lagged an average estimate of 19 Canadian
cents a share among analysts, according to Thomson Reuters
I/B/E/S.

Cash flow, a glimpse into the company’s ability to fund
operations, rose 25 percent to $824 million, or 81 cents a
share.

Production rose 8 percent to 442 million barrels of oil
equivalent per day, but oil production from the North Sea fell
by 25 percent.