National Post (National Edition)
Canandian Oil Sands profit drops as crude prices decline
Canadian Oil Sands Ltd., the Calgary-based company that gets all of its production from Syncrude Canada Ltd., said first-quarter profit fell on lower crude prices.
Net income declined to $177-million, or 37$ a share, from $321-million (66¢), a year earlier, the company said Tuesday.
Canadian Oil Sands saw profit margins erode in the early part of the year as discounts for Canadian crude remained near their highest point in five years against the U.S. benchmark. The price of Canadian heavy crude fell 12% to average US$66.99 a barrel in the first quarter from a year earlier, according to data compiled by Bloomberg.
“A number of operational issues during the quarter” caused Syncrude Canada’s estimated average output to fall to 260,000 barrels a day during the quarter, Michael P. Dunn and Robert J. Fitzmartyn, analysts with FirstEnergy Capital Corp., said in an April 18 research note.
Canadian Oil Sands is the largest owner of Syncrude Canada, a company that mines and processes oil sands in Alberta and had about 4.6 billion barrels of reserves at the end of last year. The other partners include CNOOC Ltd., Murphy Oil Corp. and Imperial Oil Ltd., which manages the venture.
The earnings were reported after the close of regular trading on North American markets. Canadian Oil Sands rose 2.3% to $19.79 at the close in Toronto.