CALGARY, Alberta, April 30 Canadian Oil Sands Ltd, the largest shareholder in the Syncrude Canada Ltd joint venture, said on Wednesday its first-quarter profit fell 6 percent as tax expenses and foreign exchange losses ate into higher crude oil sales volumes.
The company, which has a 37 percent stake in the Syncrude project, said net income was C$172 million, or 35 Canadian cents per share, from C$177 million, or 37 Canadian cents, in the first quarter of 2013.
Analysts, on average, expected it to report net income of 49 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The company said its profit for the quarter was affected by an increase in deferred tax expense and a larger unrealised foreign exchange loss on long-term debt.
That offset higher sales volumes, which averaged 105,300 barrels per day, up 10 percent from 95,700 bpd in the year-prior quarter when unplanned extraction and upgrader outages cut production.
Operating costs averaged C$445 million, compared with C$355 million in the first quarter of 2013, as a result of higher natural gas prices, the timing of planned maintenance and increased drilling activity.
Though the Syncrude project in northern Alberta can produce about 350,000 barrels per day, the site has a history of unplanned shutdowns due to equipment malfunctions, particularly at its complex upgraders, which convert tar-like bitumen stripped from the oil sands into refinery-ready synthetic crude.
Earlier this month Syncrude was forced to shut one of its two upgraders for unplanned maintenance following a valve leak repair, forcing Canadian Oil Sands to lower the project's annual production forecast to between 95 and 105 million barrels.
However, the company said its Mildred Lake mine train replacement project at Syncrude is 85 percent complete and the estimated cost had dropped to $3.9 billion from $4.2 billion.
Canadian Oil Sands' cash flow, a measure of its ability to pay for new projects, rose 30 percent to C$357 million, or 74 Canadian cents, from C$275 million, or 57 Canadian cents in the same period a year earlier.