JPMorgan - KASE

Hurricane Hydrocarbons Ltd.
Notes to interim consolidated financial statements
(expressed in United States dollars, tabular amounts in thousands of dollars) unaudited
1 Significant Accounting Policies
The Interim Consolidated Financial Statements of Hurricane Hydrocarbons LTD. (“Hurricane” or
the “Corporation”) have been prepared by management in accordance with generally accepted
accounting principles in Canada. Certain information and disclosures normally required to be
included in the notes to the annual financial statements has been omitted or condensed. The
Interim Consolidated Financial Statements should be read in conjunction with the Consolidated
Financial Statements and the notes thereto in Hurricane’s Annual Report for the year ended
December 31, 2001. The accounting principles applied are consistent with those as set out in the
corporation’s annual financial statements for the year ended December 31, 2001, except as
described in Note 10.
2 Segmented Information
9 months ended September 30, 2002
Upstream Downstream
Corporate
Services Consolidated
Revenue
Crudeoil ........................... 319,606 — — 319,606
Refinedproducts .................... 91,850 148,626 — 240,476
Processing fees ...................... — 2,112 — 2,112
Interestandotherincome ............ 4,443 755 1,299 6,497
415,899 151,493 1,299 568,691
Expenses
Production .......................... 41,669 — — 41,669
Royalties and taxes .................. 43,557 152 — 43,709
Transportation ...................... 100,131 — — 100,131
Refining ............................ — 17,607 — 17,607
Crude oil and refined product
purchases ......................... 20,806 29,608 — 50,414
Selling ............................. 7,404 11,320 — 18,724
General and administrative ........... 24,985 11,815 5,470 42,270
Interestandfinancingcosts ........... 6,295 1,165 18,618 26,078
Depletion and depreciation ........... 20,163 8,831 70 29,064
Foreign exchange loss ................ 884 760 127 1,771
265,894 81,258 24,285 371,437
Income before unusual items .......... 150,005 70,235 (22,986) 197,254
Unusual item
Arbitration settlement ............... 7,134 — — 7,134
Income before income taxes ........... 142,871 70,235 (22,986) 190,120
Income taxes
Current provision .................... 48,000 14,535 2,171 64,706
Futureincometax ................... 5,369 943 — 6,312
53,369 15,478 2,171 71,018
Minority interest ...................... — 1,672 — 1,672
Net income ............................ 89,502 53,085 (25,157) 117,430
Intersegment revenue ................. 71,460 35,144 — —
Included in the upstream crude oil revenue, for the nine months ended September 30, 2002, is
sales to one external customer in the amount of $90.8 million.
F-5