Canadian Oil Sands Spotlights 1Q10 Increase
Canadian Oil Sands announced first quarter 2010 cash from operating activities of $309 million ($0.64 per Unit) compared with $50 million ($0.10 per Unit) in the same quarter in 2009. The increase in cash from operating activities was mainly due to higher crude oil prices and a decrease in non-cash working capital, partially offset by higher Crown royalties. Net income for the first quarter was $167 million ($0.35 per Unit) compared with $43 million ($0.09 per Unit) for the 2009 first quarter. The increase in net income was mainly due to higher crude oil prices and foreign exchange gains, partially offset by higher Crown royalties. The Trust has declared a distribution of $0.50 per Unit payable on May 31, 2010 to Unitholders of record on May 20, 2010.
"With an improvement in our outlook for crude oil prices, we have increased the distribution to $0.50 per Unit for the second quarter of 2010. The increase also reflects our stated objective of optimizing our tax position at the end of this year. While this level of distributions may be unsustainable, it makes sense in the near term," said Marcel Coutu, President and Chief Executive Officer. "It also returns cash to our investors in the short term without materially changing our estimated year-end net debt level."
During the first quarter of 2010, sales volumes averaged about 99,000 barrels per day compared with 103,000 barrels per day for the first quarter of 2009. The advancement and extension of a turnaround of the LC Finer and associated upgrading units and unplanned maintenance on other units reduced sales volumes in the first quarter of 2010 while first quarter 2009 sales volumes were impacted by constrained bitumen supply and the start of the Coker 8-3 turnaround.
Operating costs in the first quarter of 2010 were $39.59 per barrel compared with $38.78 per barrel in the 2009 period. First quarter 2010 operating costs were impacted by turnaround and unplanned maintenance work, similar to the 2009 first quarter when increased maintenance costs for mining activities and the start of the Coker 8-3 turnaround contributed to higher costs.
Syncrude's total recordable injury rate for the first quarter of 2010 was 0.39 compared with a rate of 0.41 for the same period of 2009.
On April 23, 2010 the ERCB approved, with conditions, Syncrude's revised tailing pond plans submitted in September 2009 under Tailings Directive 074. These plans outline a multi-pronged approach for meeting the long-term intent of Directive 074, and include the development and implementation of three main tailings technologies: water capping, composite tails and centrifuge technology. Issued by the ERCB in February 2009, Tailings Directive 074: Tailings Performance Criteria and Requirements for Oil Sands Mining Schemes requires operators to prepare tailings plans and report on tailings ponds annually, reduce the solids content of fluid tailings through the capture of fine particles from the production process in dedicated disposal areas, and convert fines into trafficable deposits which are ready for reclamation five years after deposits have ceased. The Directive sets out very challenging targets and goals for the oil sands mining industry. Syncrude is the first operating mine to receive such an approval, and assuming the success of its developing technologies, expects to meet and exceed the requirements of the Directive.
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