Canadian Oil Sands Posts Net Loss

CALGARY, Alberta—Canadian Oil Sands Ltd., the largest stakeholder in the Syncrude oil-sands consortium, on Thursday swung to a net loss and posted a sharply lower operating profit in its latest quarter due to falling production volumes and a slump in crude oil prices.

The Calgary-based company reported a net loss of 174 million Canadian dollars ($132 million), or 36 Canadian cents a share, for the three months ended Sept. 30, compared with a net profit of C$87 million, or C$0.18 a share, in the year-earlier period. It said that came partly from a C$184 million foreign exchange loss linked to U.S. dollar-denominated debt due to a weaker Canadian currency.

Cash flow from operations, which is adjusted to exclude one-time items, slid 73% to C$82 million, or C$0.17 a share, down from C$302 million, or C$0.62 per share, a year ago. Canadian Oil Sands blamed a 41% drop on the year in realized selling prices for synthetic crude oil from Syncrude to C$60.20 per barrel.

That compared with the C$74.47 per barrel it received in the second quarter and the C$102.58 a barrel this time last year. Expectations for continued low crude oil prices prompted Canadian Oil Sands to cut its full-year cash flow from operations forecast to C$340 million, down from a July estimate of C$474 million.

The company, which owns the biggest stake in Syncrude but isn't the consortium's lead operator, is a target of a hostile takeover bid by larger rival Suncor Energy Inc. Canadian Oil Sands has rejected Suncor's all-stock offer worth about C$4.7 billion, which is set to close on Dec. 4.

Canadian Oil Sands reported a decline in sales volumes due in part to a fire in late August at Syncrude's main oil-sands plant, which reduced output by 7 million barrels overall during the quarter and 2.6 million barrels net to Canadian Oil Sands.

It sold an average of 86,687 barrels a day in the three-month period, down from 87,787 barrels a day a year ago. Syncrude's total production in the quarter came to 234,500 barrels a day, below the 244,800 barrels a day it produced in the year-earlier period.

Canadian Oil Sands owns a 36.7% stake in Syncrude and Suncor has 12%. Five other energy companies also own stakes, including Exxon Mobil Corp. 's Canadian subsidiary, Imperial Oil Ltd., which owns 25% and is the primary operator of Syncrude's oil-sands mines.

Write to Chester Dawson at [e-mail]

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(END) Dow Jones Newswires

October 29, 2015 19:55 ET (23:55 GMT)

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