Canadian Oil Sands Ltd, which owns the largest stake in Syncrude Canada Ltd, said on Tuesday that first-quarter profit fell by nearly half as operating problems and the oil sands facility lowered production.
Canadian Oil Sands, which has a 37 percent stake in the massive Syncrude tar sands mining and synthetic crude operation in northern Alberta, said profit fell 44 percent to C$177 million ($176 million), or 37 Canadian cents a share, from a year-earlier C$318 million, or 66 Canadian cents.
Analysts, on average, had expected a profit of 41 Canadian cents a share, according to Thomson Reuters I/B/E/S.
During the quarter, sales averaged 95,683 barrels per day net to the company, down 11 percent from a year earlier, with operating costs averaging C$41.20 a barrel, compared with C$32.58 per barrel last year.
The company said the production drop came on a series of unplanned outages at Syncrude's operation in northern Alberta. While it believes it has dealt with the issues, it said it will reduce its 2013 production target by 5 percent, to 38.6 million barrels net to the company, because of the weak output in the quarter.
"Syncrude production was lower than expected this quarter, as we experienced several unplanned outages in extraction and upgrading," Marcel Coutu, the company's chief executive, said in a statement. "We believe the issues that impacted operations since late 2012 have been resolved."
The average price for its synthetic crude dropped slightly to C$96.11 per barrel from C$97.07.
The company's cash flow, a measure of ability to pay for new projects, fell 39 percent to C$275 million, or 57 Canadian cents, from C$454 million or 94 Canadian cents in the year-prior quarter.
Canadian Oil Sands shares closed 2.3 percent higher at C$19.79 on the Toronto Stock Exchange on Tuesday. The results were released after the market closed.
($1 = 1.0059 Canadian dollars)
(Reporting by Scott Haggett; editing by Matthew Lewis)