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Canadian Oil Sands Trust , which owns the biggest stake in the world's top oil sands venture, the Syncrude project, says it will likely convert into a corporation before new rules governing trusts come into effect in 2011.

In its financial report, the energy trust said that in the first quarter legislation for the conversion of income and royalty trusts into corporations was enacted, allowing income and royalty trusts to convert into public corporations without triggering negative tax implications for unitholders.

"Based on current information, Canadian Oil Sands will likely convert into a corporation," the oilsands company said. "However, we plan to retain the flow-through tax attributes of a trust structure until 2011 unless circumstances arise that favour a faster transition."

Late Wednesday afternoon, Canadian Oil Sands reported its earnings plummeted about 86 per cent during the first quarter due to low oil prices. The trust earned $43-million, or nine cents per unit, for the first three months of 2008, down sharply from $298-million, or 62 per unit a year ago.

Quarterly revenue slipped to $549-million, down from $1.03-billion.

Production from the trust's 37 per cent stake in the Syncrude Canada Ltd. partnership for the quarter was 103,000 barrels per day, compared to 99,000 a year ago.

The Syncrude partners include Imperial Oil Ltd. with a 25 per cent holding, Petro-Canada with 12 per cent, ConocoPhillips with nine per cent, Nexen Inc. with seven per cent and Mocal Energy Ltd. and Murphy Oil Company Ltd. each with five per cent.

Petro-Canada's stake will go to Suncor Energy Inc. when a merger between the two companies wraps up later this year. Suncor is the second-largest oil sands miner, with vast operations next door to Syncrude's.

In trading Thursday on the Toronto Stock Exchange, Canadian Oil Sands Trust units fell 55 cents to $25.75, a drop of two per cent.

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