CALGARY, March 20 /CNW/ - (TSX - COS.UN) - Canadian Oil Sands Trust ("Canadian Oil Sands" or the "Trust") today announced that it is reducing its 2009 outlook for Syncrude production to 109 million barrels (40 million barrels net to the Trust) from 115 million barrels (42.3 million barrels net to the Trust).
The reduction is due to an extension in the schedule for turnaround work on Coker 8-3 and Syncrude's largest sulphur plant. Turnaround work on Coker 8-3 began about four weeks earlier than planned with an ancillary unit beginning to experience operating difficulties as the coker approached the end of its expected run length. The shift in timing for Coker 8-3 has delayed the scheduled sulphur plant turnaround by about one month, resulting in an extension for all the planned spring turnaround work. Canadian Oil Sands also previously disclosed that the Coker 8-3 turnaround would take approximately two months to complete because it includes modifications to the unit aimed at improving yield and run length. As a result of these events, Syncrude production is expected to be lower in the first half of 2009 than originally anticipated. Canadian Oil Sands continues to expect modest turnaround activity and more reliable operations at Syncrude in the second half of 2009, resulting in improved production rates.
Canadian Oil Sands is correspondingly reducing its outlook for the range of Syncrude production in 2009. The revised range is 105 million barrels to 112 million barrels (38.6 million barrels to 41.1 million barrels net to the Trust). Previously, the production range was 110 million barrels to 120 million barrels (40 million barrels to 44 million barrels net to the Trust).
The extension in the turnaround schedule also is expected to result in higher operating costs; however, the expected amount of such costs is not determinable at this time. Canadian Oil Sands will provide an update if material information becomes known. In any event, Canadian Oil Sands plans to provide an update of its outlook for 2009 concurrent with the release of its first quarter results on April 29, 2009.
Canadian Oil Sands provides a pure investment opportunity in the Syncrude Project through its 36.74 per cent working interest. The Trust is an open-ended investment trust managed by Canadian Oil Sands Limited and has approximately 483.2 million units outstanding, trading on the Toronto Stock Exchange under the symbol COS.UN.
Located near Fort McMurray, Alberta, Syncrude Canada operates large oil-sands mines and an upgrading facility that produces a light, sweet crude oil on behalf of its joint venture owners, which include Canadian Oil Sands Limited, ConocoPhillips Oilsands Partnership II, Imperial Oil Resources, Mocal Energy Limited, Murphy Oil Company Ltd., Nexen Oil Sands Partnership, and Petro-Canada Oil and Gas.
Advisory: In the interest of providing Canadian Oil Sands (the "Trust" or "we") unitholders and potential investors with information regarding the Trust, including management's assessment of the Trust's future plans and operations, certain statements throughout this press release contain "forward-looking statements". Forward-looking statements in this release include, but are not limited to, statements with respect to: the expectations for the timing of completing the turnaround of Coker 8-3, the expected annual production for 2009, the expectations for operating costs and the expectation regarding improved production rates and modest turnaround activity in the second half of the year. You are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By their nature, forward-looking statements involve numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will not occur. Although the Trust believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Some of the risks and other factors which could cause results to differ materially from those expressed in the forward-looking statements contained in this press release include, but are not limited to: the difficulties and risks involved in any complex mining and upgrading operation, and in particular relating to maintenance and modifications of large refining units, material and labour availability and cost; and such other risks and uncertainties described from time to time in the reports and filings made with securities regulatory authorities by the Trust. We would refer you to the risks and assumptions further outlined in the Trust's annual information form and annual and quarterly financial reports.
Canadian Oil Sands Limited Marcel Coutu President & Chief Executive Officer Units Listed - Symbol: COS.UN Toronto Stock Exchange