Canadian Oil Sands profit falls on forex loss, lower oil prices

Thu Oct 30, 2014 5:30pm EDT
 
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CALGARY, Alberta Oct 30 (Reuters) - Canadian Oil Sands Ltd , the largest shareholder in the Syncrude Canada Ltd joint venture, said on Thursday third-quarter profit fell by nearly two-thirds on foreign-exchange losses, lower commodity prices and higher expenses.

The company, which has a 37 percent stake in the Syncrude project, said net income was C$87 million ($77.8 million) or 18 Canadian cents per share, sharply down from C$246 million, or 51 Canadian cents, in the third quarter of 2013.

Its profit for the quarter was affected by a C$73 million loss on its U.S.-denominated debt as the Canadian dollar weakened. As well, it sold its crude for an average price of C$102.58 per barrel, down from C$112.55.

Sales volumes of Syncrude's synthetic crude oil averaged 87,787 barrels per day, up 4.2 percent from 84,250 bpd in the year-prior quarter.

Operating costs were C$385 million, up from C$357 million in the year-earlier quarter, because of higher maintenance costs and increased natural gas prices.

The Syncrude project, which can produce 350,000 barrels per day, has a history of unplanned shutdowns caused by equipment malfunctions, particularly at its complex upgraders, which convert tar-like bitumen stripped from the oil sands into refinery-ready synthetic crude.

The company said its C$3.9 billion Mildred Lake mine train replacement project at Syncrude is nearly complete and is now ready for commissioning.

Canadian Oil Sands' cash flow, a measure of its ability to pay for new projects, fell 11 percent to C$302 million, or 62 Canadian cents, from C$340 million, or 70 Canadian cents.

The company also lowered its production target for 2014. It now expects to produce a total 97 million barrels of synthetic crude this year, down from its prior estimate of about 100 million barrels to reflect its year-to-date production performance. (1 US dollar = 1.1183 Canadian dollar) (Reporting by Scott Haggett; Editing by James Dalgleish)