Canadian Oil Sands Trust announced that cash from operating activities in the second quarter of 2008 increased 27% to $413 million ($0.86 per Trust unit ("Unit")), over the same 2007 period. Year-to-date, cash from operating activities was up 62% to $854 million ($1.78 per Unit) compared with the 2007 six-month period.
The increase in cash from operating activities on both a quarter and year-to-date basis reflects a higher realized selling price for the Trust's synthetic crude oil partially offset by lower sales volumes and higher operating and Crown royalties expenses.
Net income for the second quarter 2008 was $497 million ($1.04 per Unit) compared with a net loss of $395 million ($0.82 per Unit) for the 2007 period. Year-to-date, net income totaled $795 million ($1.66 per Unit) in 2008 compared with a net loss of $133 million ($0.28 per Unit) for 2007.
In the second quarter of 2007 the Trust recorded a one time future income tax expense of $701 million for the substantive enactment of trust taxation legislation, resulting in net losses for the 2007 second quarter and year-to-date periods.
The Trust has declared a 25% increase in the quarterly distribution amount to $1.25 per Unit from $1.00 per Unit for Unitholders of record on August 15, 2008, payable on August 29, 2008.
Sales volumes quarter-over-quarter and on a year-to-date basis were lower in 2008 compared with 2007. In 2008, sales volumes averaged about 97,700 barrels per day and 98,500 barrels per day during the second quarter and first half of the year, respectively. Second quarter 2008 sales volumes were primarily impacted by a scheduled coker turnaround while the first quarter was marked by a disruption in operations and reliability challenges in bitumen production and extraction.
Operating costs in the second quarter of 2008 rose 39% to $41.92 per barrel from the comparative 2007 quarter. For the first half 2008, operating costs were $38.90 per barrel, up 46% from the same period
"As we entered the third quarter of 2008, operational reliability has improved with Syncrude achieving near design capacity rates in June and July. While the third quarter will also be impacted by a scheduled coker turnaround, confidence in Syncrude's operations for the remainder of the year and buoyant crude oil prices encourage us to once again increase our quarterly distribution," said Marcel Coutu, President and Chief Executive Officer. "A principle tenet of our financial plan is to provide investors with a fuller payout of the cash generated by our business during periods of lower capital investment in order to manage an efficient capital structure for the Trust."
In the second quarter of 2008, Syncrude's total recordable injury rate was 0.59 for every 200,000 hours worked compared to a rate of 0.70 recorded for the same period of 2007.
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