October 28, 2009 / 10:32 PM / 9 years ago

UPDATE 2-Canadian Oil Sands profit falls with prices, output

* Q3 EPS C$0.51 versus C$1.25

* Production 114,544 bpd vs 116,656

* Distribution raised by C$0.10 to C$0.35/unit

* Forecast production 104 mln bbls in ‘09, 115 mln in ‘10 (Adds distribution increase, stock performance)

CALGARY, Alberta, Oct 28 (Reuters) - Canadian Oil Sands Trust COS_u.TO, which has the biggest stake in Syncrude Canada Ltd, said on Wednesday its third-quarter earnings fell 59 percent as oil prices tumbled from last year’s heights and production dipped.

Still, Canadian Oil Sands increased its quarterly distribution by 10 Canadian cents to 35 Canadian cents a unit, a move it said reflected recent gains in oil prices and in production at Syncrude, which averaged 312,000 barrels a day in the third quarter.

The company also said it expects to spend C$541 million ($501 million) in 2010 as it looks for output of synthetic crude from the world’s largest oil sands mining project to rise by nearly 11 percent from this year’s estimated total.

Canadian Oil Sands, which has a 37 percent interest in Syncrude, earned C$247 million, or 51 Canadian cents a unit, down from year-earlier C$604 million, or C$1.25 a unit.

The company had been expected to earn 31 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Cash flow, the money from which trusts pay distributions to unitholders, sank 77 percent to C$213 million, or 44 Canadian cents a unit, from C$921 million, or C$1.91 a unit.

During the period, benchmark oil prices averaged $68.24 a barrel, down 42 percent from a year earlier. Canadian Oil Sands said its realized price was C$73.31 a barrel, down 43 percent.

The trust said its share of production from the sprawling operation, located north of Fort McMurray, Alberta, was 114,544 barrels a day, down about 2,000 barrels from the year before.

Operating costs were C$27.80 a barrel, 14 percent lower than than in the third quarter of 2008 due to lower maintenance costs and weaker natural gas prices, the trust said.

Canadian Oil Sands said it expects Syncrude production to total 104 million barrels this year, and 115 million in 2010, with a range of 110 million to 120 million.

It sees 2010 cash from operating activities of C$1 billion, or C$2 per unit.

Of next year’s planned spending, C$408 is earmarked for maintenance at Syncrude and C$133 million will go to the project’s emissions reduction initiative, which is aimed at cutting sulfur emissions by 60 percent.

Canadian Oil Sands units fell 68 Canadian cents to C$30.17 on the Toronto Stock Exchange amid a broad-based selloff. The units have climbed 43 percent since the start of 2009.

$1=$1.08 Canadian Reporting by Jeffrey Jones; Editing by Rob Wilson

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