October 29, 2015 / 8:54 PM / in 3 years

Canadian Oil Sands CEO says company 'getting interest' after Suncor bid

CALGARY, Alberta (Reuters) - Canadian Oil Sands Ltd COS.TO, the biggest shareholder in the Syncrude project, has not received a rival offer to a hostile takeover bid by Suncor Energy (SU.TO), but it is “getting interest” as it explores alternatives, Chief Executive Ryan Kubic said on Thursday.

In an interview after the company reported a quarterly loss, Kubic said he had met in recent days with many of the company’s top shareholders who told him that the bid from Suncor, Canada’s largest oil and gas producer, is undervalued and embarrassing.

“They’re showing strong support for ... our recommendation that shareholders should reject the Suncor offer,” he said.

He said the company is exploring several alternatives to the Suncor bid, including staying independent, selling portions of the business, or selling the whole business to another buyer.

“We’re just in the early days of that process but we are getting interest,” Kubic said.

Canadian Oil Sands on Thursday reported a loss of C$174 million ($132.22 million), or 36 Canadian cents per share.

That was a much wider loss than the average analyst expectation of a loss of 22 Canadian cents per share, according to Thomson Reuters I/B/E/S.

COS realized a synthetic crude oil selling price of C$60.20 per barrel compared with C$102.58 per barrel in the same 2014 quarter.

Cash flow from operations, a key indicator of the company’s ability to pay for new projects and drilling, fell to C$82 million, compared with C$302 million in the same quarter of 2014, largely reflecting the lower synthetic crude price.

Operating expenses per barrel dropped to C$40.49 for the quarter, compared with C$47.73 in the third quarter of 2014.

A fire at the Syncrude project in late August sharply cut production throughout September. Overall, the project produced 21.6 million barrels of synthetic crude oil in the third quarter, compared with 22.5 million barrels in the year-earlier quarter.

The Syncrude venture - Canada’s largest oil sands project - is jointly owned by Canadian Oil Sands, Suncor, Imperial Oil (IMO.TO), Mocal Energy, Murphy Oil (MUR.N), CNOOC Ltd (0883.HK) subsidiary Nexen and Sinopec (0386.HK).

Additional reporting by Nia Williams; Editing by G Crosse and Leslie Adler

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