(Reuters) - Canadian Oil Sands Ltd COS.TO, the biggest shareholder in the Syncrude oil sands project, reported a quarterly loss, hurt by fall in crude oil prices and deferred tax expenses due to an increase in the provincial corporate tax rate in Alberta.
The company also cut its 2015 capital spending forecast to C$422 million ($325 million) from C$451 million.
The slump in oil prices has resulted in a drop in production and investment in Canada’s oil sands, the world’s third-largest crude reserve. Syncrude is the largest single-source producer of oil in Canada.
Oil sands mining involves an expensive process of separating tar-like bitumen from sand. It is then blended into heavy oil or upgraded into synthetic oil.
Earlier this month, Teck Resources Ltd TCKb.TO said it would delay development of its massive, high-cost Frontier oil sands project in northern Alberta by five years.
Calgary-based Canadian Oil Sands slashed its dividend to 5 Canadian cents from 20 Canadian cents in January. It had previously cut the dividend from 35 Canadian cents.
The company said on Thursday that its realized selling price fell to C$74.47 per barrel in the quarter ended June 30 from C$112.04 a year earlier.
Cash flow, a key indicator of the company’s ability to pay for new projects and drilling, fell 71 percent to C$70 million.
Canadian Oil Sands reported a loss of C$128 million, or 26 Canadian cents per share. The company posted a profit of C$176 million, or 36 Canadian cents per share, a year earlier.
The company said the deferred tax expense reflected an increase in Alberta’s corporate tax to 12 percent from 10 percent.
Canadian Oil Sands’ stock, which has fallen more than 68 percent in the last 12 months, closed at C$7.62 on the Toronto Stock Exchange.
Reporting by Anannya Pramanick in Bengaluru; Editing by Savio D'Souza and Ted Kerr