Buy-recommended Canadian Oil Sands Trust (OTCQX:COSWF) posted November Syncrude production of 287,000 barrels daily (bd) compared to 350,000 bd capacity. The shortfall was caused by “an unplanned outage of the Vacuum Distillation Unit”. As a result, we can chalk up 2009 as a year of inaccurate projections on our part of operating levels and distribution amounts for our favorite pure play oil producer.
Nonetheless, COSWF stock price is in an uptrend above its 200-day average along with six-year oil above its 40-week average. The extra undervaluation implied by our estimated Net Present Value of US$42 a share depends on achieving operations at capacity. Unaffected by November operations, our estimated distribution yield for 2010 is 6.2%.
Originally published on December 4, 2009.