Canadian Oil Sands Ltd., which has the largest stake in the Syncrude Canada Ltd. oil sands project, said Tuesday its profit jumped 42 per cent in the second quarter as higher oil prices offset a drop in output due to mechanical problems.
Canadian Oil Sands earned $346-million, or 71 cents a share, up from year-earlier $244-million, or 50 cents a share.
That was slightly below analysts’ average estimate of 73 cents a share, according to Thomson Reuters I/B/E/S.
Cash flow, a glimpse into the company’s ability to fund operations, rose 43 per cent to $544-million, or $1.12 a share, from $381-million, or 79 cents a share..
Canadian Oil Sands, which has a 37 per cent interest in the sprawling Syncrude development north of Fort McMurray, Alta., said its results were helped by higher overall oil prices, although production dropped and operating expenses rose.
Its share of Syncrude sales volumes in the quarter averaged 103,000 barrels a day, down 13 per cent due to unplanned outages of Syncrude’s vacuum distillation unit and LC Finer, part of the upgrading operations which turn the bitumen from the oil sands into refinery-ready light oil.
In total, Syncrude produced 281,000 barrels a day, well below its 350,000 bpd capacity.
The problems with the two pieces of equipment have been fixed and the company will provide production numbers for July next week, Canadian Oil Sands spokeswoman Alison Trollope said.
The unplanned upgrader outages have lifted cash prices in recent weeks for the synthetic crude that is processed from the Alberta oil sands, trade sources have said.
Canadian Oil Sands’ averaged realize price during the second quarter was $111 a barrel, up 42 per cent from the same period a year earlier, the company said.
Full-year output for Syncrude is still expected to total 110 million barrels, the company said.
In the quarter, operating costs were $37.07 a barrel, compared with $30.93 a year earlier.