XML 124 R44.htm IDEA: XBRL DOCUMENT v3.19.3.a.u2
Property, Plant and Equipment (Tables)
 12 Months Ended
Dec. 31, 2019
Property, plant and equipment [abstract]  
Disclosure of property plant and equipment
($ millions)
2019

 
2018

 
Exploration and evaluation assets at cost
1,848.1

 
2,325.0

 
Accumulated amortization
(1,602.6
)
 
(1,852.4
)
 
Net carrying amount
245.5

 
472.6

 
 
 
 
 
 
Reconciliation of movements during the year
 
 
 
 
Cost, beginning of year
2,325.0

 
2,305.1

 
Accumulated amortization, beginning of year
(1,852.4
)
 
(1,670.2
)
 
Net carrying amount, beginning of year
472.6

 
634.9

 
 
 
 
 
 
Net carrying amount, beginning of year
472.6

 
634.9

 
Acquisitions through business combinations, net
7.3

 
10.2

 
Additions
384.9

 
673.3

 
Dispositions
(101.9
)
 
(7.5
)
 
Transfers to property, plant and equipment
(380.6
)
 
(705.9
)
 
Amortization
(129.1
)
 
(157.2
)
 
Foreign exchange
(7.7
)
 
24.8

 
Net carrying amount, end of year
245.5

 
472.6

 
($ millions)
2019

 
2018

 
Development and production assets
23,038.6

 
26,635.3

 
Corporate assets
117.2

 
114.6

 
Property, plant and equipment at cost
23,155.8

 
26,749.9

 
Accumulated depletion, depreciation and impairment
(15,314.2
)
 
(16,319.7
)
 
Net carrying amount
7,841.6

 
10,430.2

 
 
 
 
 
 
Reconciliation of movements during the year
 
 
 
 
Development and production assets
 
 
 
 
Cost, beginning of year
26,635.3

 
25,881.1

 
Accumulated depletion and impairment, beginning of year
(16,262.2
)
 
(11,877.1
)
 
Net carrying amount, beginning of year
10,373.1

 
14,004.0

 
 
 
 
 
 
Net carrying amount, beginning of year
10,373.1

 
14,004.0

 
Acquisitions through business combinations, net
8.7

 
12.2

 
Additions
1,075.7

 
1,083.6

 
Dispositions, net
(1,230.9
)
 
(523.8
)
 
Transfers from exploration and evaluation assets
380.6

 
705.9

 
Reclassified as assets held for sale
(195.0
)
 
—

 
Depletion
(1,087.4
)
 
(1,412.4
)
 
Impairment
(1,466.4
)
 
(3,704.8
)
 
Foreign exchange
(70.8
)
 
208.4

 
Net carrying amount, end of year
7,787.6

 
10,373.1

 
 
 
 
 
 
Cost, end of year
23,038.6

 
26,635.3

 
Accumulated depletion and impairment, end of year
(15,251.0
)
 
(16,262.2
)
 
Net carrying amount, end of year
7,787.6

 
10,373.1

 
 
 
 
 
 
Corporate assets
 
 
 
 
Cost, beginning of year
114.6

 
106.4

 
Accumulated depreciation, beginning of year
(57.5
)
 
(48.0
)
 
Net carrying amount, beginning of year
57.1

 
58.4

 
 
 
 
 
 
Net carrying amount, beginning of year
57.1

 
58.4

 
Additions
2.9

 
7.7

 
Depreciation
(5.9
)
 
(9.2
)
 
Foreign exchange
(0.1
)
 
0.2

 
Net carrying amount, end of year
54.0

 
57.1

 
 
 
 
 
 
Cost, end of year
117.2

 
114.6

 
Accumulated depreciation, end of year
(63.2
)
 
(57.5
)
 
Net carrying amount, end of year
54.0

 
57.1

 
Schedule of Forecast Benchmark Commodity Prices And Exchange Rates for Impairment of Property, Plant and Equipment
The following table outlines the forecast benchmark commodity prices and the exchange rate used in the impairment calculation of PP&E at December 31, 2018:
 
2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029 (2)

WTI ($US/bbl) (1)
58.58

64.60

68.20

71.00

72.81

74.59

76.42

78.40

79.98

81.59

83.22

Exchange Rate ($US/$Cdn)
0.757

0.782

0.797

0.803

0.807

0.808

0.808

0.808

0.808

0.808

0.808

WTI ($Cdn/bbl)
77.38

82.61

85.57

88.42

90.22

92.31

94.58

97.03

98.99

100.98

103.00

AECO ($Cdn/MMbtu) (1)
1.88

2.31

2.74

3.05

3.21

3.31

3.39

3.46

3.54

3.62

3.70

(1)
The forecast benchmark commodity prices listed above are adjusted for quality differentials, heat content, distance to market and other factors in performing the impairment tests.
(2)
Forecast benchmark commodity prices are assumed to increase by 2.0% in each year after 2029 to the end of the reserve life. Exchange rates are assumed to be constant at 0.808.
The following table outlines the forecast benchmark commodity prices and the exchange rate used in the impairment calculation of PP&E at December 31, 2019:
 
2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030 (2)

WTI ($US/bbl) (1)
61.00

63.75

66.18

67.91

69.48

71.07

72.68

74.24

75.73

77.24

78.79

Exchange Rate ($US/$Cdn)
0.760

0.770

0.785

0.785

0.785

0.785

0.785

0.785

0.785

0.785

0.785

WTI ($Cdn/bbl)
80.26

82.79

84.31

86.51

88.51

90.54

92.59

94.57

96.47

98.39

100.37

AECO ($Cdn/MMbtu) (1)
2.04

2.32

2.62

2.71

2.81

2.89

2.96

3.03

3.09

3.16

3.24

(1)
The forecast benchmark commodity prices listed above are adjusted for quality differentials, heat content, distance to market and other factors in performing the impairment tests.
(2)
Forecast benchmark commodity prices are assumed to increase by 2.0% in each year after 2030 to the end of the reserve life. Exchange rates are assumed to be constant at 0.785.
Schedule of Impairment Loss and Reversal of Impairment Loss
The following table summarizes the impairment expense for the year ended December 31, 2019 by CGU:
CGU
($ millions, except %)
Operating segment
Recoverable amount

Discount rate

Impairment

Impairment, net of tax

Southeast Saskatchewan
Canada
4,087.0

15.00
%
811.7

594.1

Southwest Saskatchewan
Canada
1,704.1

15.00
%
333.5

244.1

Southern Alberta
Canada
858.0

15.00
%
56.0

41.0

Northern Alberta
Canada
1.1

15.00
%
6.6

4.8

Total impairment
6,650.2

 
1,207.8

884.0

The following table summarizes the impairment expense for the year ended December 31, 2018 by CGU:
CGU
($ millions, except %)
Operating segment
Recoverable amount

Discount rate

Impairment

Impairment, net of tax

Southeast Saskatchewan
Canada
5,250.6

15.00
%
1,782.1

1,300.9

Utah
U.S.
931.7

18.00
%
873.5

658.4

Southwest Saskatchewan
Canada
1,975.2

15.00
%
549.4

401.1

Southern Alberta (1)
Canada
872.7

15.00
%
404.8

295.5

Northern U.S.
U.S.
878.7

15.00
%
83.8

63.2

Northern Alberta
Canada
3.9

15.00
%
11.2

8.2

Total impairment (2)
9,912.8

 
3,704.8

2,727.3

(1)
At September 30, 2018, the Company classified certain non-core assets as held for sale. Immediately before classifying the assets as held for sale, the Company conducted a review of the assets' recoverable amounts and recorded an impairment loss of $14.1 million related to PP&E.
(2)
At December 31, 2018, accumulated after tax impairment losses, net of depletion had no impairment loss been recognized in prior periods for the Canada and U.S. operating segments were $3.29 billion and $879.9 million, respectively.
Schedule of Impact on Income Before Tax For Changes in Discount Rate and Forecast Benchmark Commodity Price Estimates
CGU
($ millions)
Discount Rate
 
Commodity Prices
 
Increase 1%

 
Decrease 1%

 
Increase 5%

 
Decrease 5%

 
Southeast Saskatchewan
(350.2
)
 
385.5

 
640.6

 
(639.8
)
 
Utah
(46.8
)
 
53.8

 
140.7

 
(111.0
)
 
Southwest Saskatchewan
(135.8
)
 
149.7

 
240.9

 
(240.6
)
 
Southern Alberta
(70.0
)
 
77.2

 
133.8

 
(132.5
)
 
Northern U.S.
(57.6
)
 
65.6

 
83.8

 
(101.0
)
 
Northern Alberta
(0.4
)
 
0.5

 
1.0

 
(1.0
)
 
Increase (decrease)
(660.8
)
 
732.3

 
1,240.8

 
(1,225.9
)

The following sensitivities show the resulting impact on income before tax of the changes in discount rate and forecast benchmark commodity price estimates at December 31, 2019, with all other variables held constant:
CGU
($ millions)
Discount Rate
 
Commodity Prices
 
Increase 1%

 
Decrease 1%

 
Increase 5%

 
Decrease 5%

 
Southeast Saskatchewan
(265.1
)
 
291.8

 
489.8

 
(486.7
)
 
Southwest Saskatchewan
(113.2
)
 
124.7

 
215.7

 
(215.2
)
 
Southern Alberta
(61.1
)
 
67.3

 
118.2

 
(118.3
)
 
Northern Alberta
(0.3
)
 
0.3

 
0.6

 
(0.6
)
 
Increase (decrease)
(439.7
)
 
484.1

 
824.3

 
(820.8
)