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Canadian Oil Sands Trust , which holds the biggest stake in Syncrude Canada Ltd., said Monday its second-quarter profit tumbled 90 per cent as oil prices sank and output fell due to heavy maintenance at the world's biggest oil sands venture.

But expectations of better production performance in the last half of this year prompted Canadian Oil Sands to raise its quarterly distribution by 10 cents a unit to 25 cents, it said.

The trust, which has a 37 per cent stake in Syncrude, earned $46-million, or 10 cents a unit, down from year-earlier $497-million, or $1.04 a unit.

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The results beat analysts' average profit estimate of 1 cent per unit.

Cash from operating activities, used to pay distributions to unit holders, fell to negative $44-million, or 9 cents a unit, from $413-million, or 86 cents a unit, in the second quarter of last year.

The profit drop came as oil prices tumbled amid the recession and stockpiles rose. Oil averaged $59.79 (U.S.) a barrel in the quarter, down 52 per cent from the year before.

Meanwhile, Syncrude conducted a longer-than-expected maintenance at the newest of its coker units, which turn the extra-heavy crude from the Alberta oil sands into refinery-ready synthetic oil. An older coker unit also ran at below-capacity rates, Canadian Oil Sands said.

"With this major work completed and mining operations on an improving trend from the bitumen constraints experienced in the last 12 months, we are looking forward to a strong second half of the year and progress towards achieving design capacity rates," Canadian Oil Sands chief executive officer Marcel Coutu said.

The trust said its share of Syncrude's production fell 22 per cent to 76,000 barrels per day from 98,000 bpd.

Due to the drop in output, operating costs averaged $50.23 (Canadian) per barrel, up about 20 per cent from the year-prior period.

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Canadian Oil Sands Trust said it has lowered its estimate for Syncrude's overall output this year to 104 million barrels from 109 million to reflect the maintenance work, and raised its operating cost estimate for the year to $35 a barrel.

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