By Chester Dawson 

CALGARY, Alberta-- Canadian Oil Sands Ltd. on Thursday reported a net loss in the first quarter and further cut its 2015 capital spending plan to cope with a sharp drop in crude oil prices.

The largest owner of the Syncrude oil sands project in Alberta lost 186 million Canadian dollars ($154.1 million), or 38 Canadian cents per share, in the three months to March 31. That compared with a net profit of C$172 million, or 35 Canadian cents a share, in the year-earlier period.

Canadian Oil Sands blamed a nearly 50% decline in crude prices and a weaker Canadian currency, which led to a C$160 million foreign exchange loss on U.S. dollar denominated debt.

"There's no doubt that our business is very sensitive to the price of oil," Chief Executive Ryan Kubik told shareholders at the company's annual shareholder meeting, which was also held Thursday.

The Calgary-based company said its average realized selling price in the first quarter was C$55.95 a barrel, down from C$105.73 per barrel a year ago. As a result, cash flow fell 78% on the year to C$76 million, or 16 Canadian cents per share, down from C$357 million, or 74 cents a share, in the year earlier period.

Cost-cutting initiatives pushed down operating expenses 24% on the year to C$35.71 a barrel in the first three months, the company said.

Canadian Oil Sands kept its full year production forecast for Syncrude at 95 million to 110 million barrels, but trimmed its capital spending budget for the year to C$429 million. That was down from its previous announcement in January to spend C$451 million and an initial 2015 budget of C$564 million.

Earlier this year, Canadian Oil Sands slashed its dividend payment 75% to five Canadian cents a share, citing the need to keep its debt level in check. Mr. Kubik said the company's net debt currently stands at C$2.2 billion and is poised to rise further before declining later this year.

"We expect it's going to peak in the second quarter," he said, noting the cost of servicing that debt load is almost C$5 a barrel.

Canadian Oil Sands holds a 37% stake in Syncrude, with six other companies owning the remainder, including the lead operator, Exxon Mobil Corp. unit Imperial Oil Ltd., and Suncor Energy Inc., Canada's biggest oil and gas company.

Exxon and Suncor have been critical of the frequency of unscheduled maintenance issues that have crimped output levels from Syncrude's Mildred Lake and Aurora oil sands surface mines. Mr. Kubik said reliability has been an issue at Syncrude but that those concerns are being addressed.

"It's fair to say that production levels haven't met our expectations in recent years. I believe, however, that Syncrude is on the right track for sustainable, long-term production increases with fewer unplanned outages," the CEO said.

Write to Chester Dawson at chester.dawson@wsj.com

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