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Syncrude's largest owner Canadian Oil Sands misses estimates on lower than expected production numbers

Syncrude's largest owner Canadian Oil Sands misses estimates on lower than expected production numbers

Canadian Oil Sands [TSX:COS] reported disappointing production numbers today. Syncude production averaged 208,000 barrels/day, down 23% from the same time last year. Two out of three cokers were taken out of service for unplanned maintenance last quarter, contributing to the production miss. The company also provided the following updates on their operation:

  • The Mildred Lake Mine Train Replacement Project was completed on budget and is expected to start-up at start of Q4-2014.
  • The Centrifuge Tailings Management Project reached 85% completion and is planned to start-up in the second half of 2015.

Now that the turnarounds are completed, the company estimates production will be back to the nameplate capacity of 310,000 barrels/day for the remainder of the year. This assumes a smooth start-up of the Mildred Lake mining trains.

Due to the lower production, operating expenses increased $60/barrel versus the expected $45.73/barrel. Second quarter earnings declined to $176 million (from $219 million last year). Apart from the lower sales volume, the company also paid more royalties than planned.

Despite the drop in production, the company declared a quarterly dividend of $0.35/share for the upcoming quarter.

Canadian Oil Sands is a pure oil sands investment which owns 37% of Syncrude Canada.

Keyera stock continues to outperform

Keyera stock continues to outperform

Imperial Oil reports second quarter earnings

Imperial Oil reports second quarter earnings

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