Canadian Oil Sands Ltd., owner of the largest stake in closely held Syncrude Canada Ltd., said third-quarter profit fell on lower production as maintenance work took longer than expected.
Net income declined to C$246 million ($235 million), or 51 cents a share, from C$336 million, or 69 cents, a year earlier, the Calgary-based company said in a statement on Marketwired today. Cash flow from operations declined to C$339 million from C$470 million.
Canadian Oil Sands said June 10 that a Syncrude coker, which heats bitumen so it can be refined for commercial use, would be shut 50 days for maintenance work. Instead, the shutdown lasted 78 days and affected September production, Chris Feltin, a Calgary-based analyst at Macquarie Capital Markets, wrote in an Oct. 10 note to clients.
“We believe that Canadian Oil Sands will not be able to achieve the low end of its full-year production guidance,” he said in the note. The company already lowered its target twice this year, he said.
The company today lowered its production target for Syncrude for the year to between 97 million barrels and 100 million barrels. The company’s sales volume declined to 84,300 barrels per day in the quarter from 113,300 barrels a day in the year-earlier period.
“Healthy crude oil prices have facilitated funding of these major projects and our dividend while maintaining a very strong balance sheet, despite lower than expected production at Syncrude,” said Chief Executive Officer Marcel Coutu, in the statement today.
The price of Canadian heavy crude rose 8.3 percent to an average of $83.10 a barrel in the third quarter from a year earlier, according to data compiled by Bloomberg.
Syncrude is one of the largest oil-sands projects in Canada with a capacity of 350,000 barrels a day. Canadian Oil Sands owns 36.74 percent of Syncrude, which held an estimated 4.6 billion barrels of proved and probable reserves at the end of 2012, according to its website. The other venture partners include Imperial Oil Ltd. and China Petroleum & Chemical Corp.
Canadian Oil Sands fell 1.1 percent to C$20.56 at the close in Toronto. The stock has two buy, 13 holds and three sell recommendations from analysts.