* Net income falls to C$0.20/unit on charge
* Operating income C$0.50 vs C$0.47 expected
* Production up 8 pct to 119,287 bpd (Adds details on Arctic fields, results)
CALGARY, Alberta, Jan 28 (Reuters) - Canadian Oil Sands Trust COS_u.TO, which holds the largest stake in the Syncrude Canada Ltd partnership, said on Thursday its fourth-quarter profit fell 23 percent despite strengthening oil prices as it wrote down the value of some Arctic gas fields.
The trust said its net income fell to C$96 million ($90 million), or 20 Canadian cents per unit, from C$124 million, or 26 Canadian cents, in the fourth quarter of 2008.
The drop came as the trust wrote down the value of Arctic gas fields it acquired for C$198 million in 2006 as a hedge against natural gas prices by C$148 million. Without the charge, net income would have been C$244 million, or 50 Canadian cents per unit, beating analysts' average profit estimate of 47 Canadian cents a unit.
The profit drop comes despite oil prices that rose from the year-prior quarter, when commodity prices plunged as the economic crisis took hold. Benchmark North American oil prices averaged $76.13 in the quarter, up 29 percent from the fourth quarter of 2008.
Cash from operating activities, used to pay distributions to unitholders, fell 30 percent to C$328 million, or 68 Canadian cents a unit, from C$466 million, or 97 Canadian cents.
The trust, which owns a 37 percent share in the Syncrude Canada oil sands project, said its share of production from the site north of Fort McMurray, Alberta, rose 8 percent to 119,287 barrels a day. It sold its synthetic crude for an average price of C$78.67 a barrel, up 13 percent from a year earlier.
Operating costs for the project during the quarter fell 6 percent to C$30.18 a barrel from C$32.10.
The trust also said it expects Syncrude's 2010 production to be around 115 million barrels, or about 315,000 bpd, unchanged from an outlook released in October. However it warned that unplanned maintenance this month at the project's upgrader, which converts tarry bitumen into refinery-ready synthetic crude, and a planned turnaround would lower first-quarter output.
Canadian Oil Sands Trust's revenue for the quarter rose 17 percent to C$895 million.
For the year, net income fell 72 percent to C$432 million, or 89 Canadian cents per unit, from C$1.52 billion, or C$3.16.
Cash from operating activities fell 76 percent from 2008 to C$547 million, or C$1.13 a unit, from C$2.24 billion or C$4.66 per unit.
The trust's share of Syncrude's 2009 production fell 2.7 percent from the prior year to 103,129 barrels per day.
Canadian Oil Sands Trust units fell 36 Canadian cents to C$27.99 on the Toronto Stock Exchange on Thursday. The units have risen 63 percent over the past 12 months.
$1=$1.07 Canadian Reporting by Scott Haggett; editing by Rob Wilson