UPDATE 1-Canadian Oil Sands posts loss, says cost cuts paying off
(Adds operating cost cuts and CEO quote)
By Nia Williams
CALGARY, Alberta, April 30 (Reuters) - Canadian Oil Sands Ltd, the largest shareholder in the Syncrude Canada Ltd joint venture, said on Thursday it swung to a loss in the first quarter as oil prices dropped by more than half.
The company, which has a 37 percent stake in the Syncrude project, said its net loss was C$186 million ($154.1 million), or 38 Canadian cents per share, compared with a net profit of C$172 million, or 35 Canadian cents, in the first quarter of 2014.
Canadian Oil Sands said its loss came on sharply lower oil prices, as well as non-cash losses in U.S. dollar debt. It sold its synthetic crude for C$55.95 per barrel on average in the quarter, down from C$105.73.
As oil prices nosedived the company was able to reduce operating costs thanks to lower natural gas and diesel costs as well as cost-cutting initiatives.
Operating costs were C$35.71 per barrel, down 24 percent from C$46.91 per barrel in the year-earlier quarter. The company reduced its 2015 operating cost forecast to $39.48 a barrel from its previous estimate of $40.19 a barrel.
"With a further reduction in our cost estimates for 2015 and the wrap-up of investment in major capital projects, we expect Syncrude to spend about $1.7 billion less in 2015 than last year to run and maintain the operation," said Chief Executive Officer Ryan Kubik.
The company expects an average 2015 WTI price of $55 a barrel and synthetic crude to trade at a discount of $4 a barrel. Continued...