Canadian Oil Sands Posts Net Loss
October 29 2015 - 8:10PM
Dow Jones News
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 chester.dawson@wsj.com
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(END) Dow Jones Newswires
October 29, 2015 19:55 ET (23:55 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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