Syncrude Hits Record Barrels Daily for August

Syncrude, the world’s largest oil sands mine and upgrader, 37% owned by buy-recommended Canadian Oil Sands Trust (COSWF), produced a record 375,000 barrels daily of high quality crude oil in the month of August. The amount exceeds rated capacity of 350,000 barrels daily that allows for maintenance downtime of which there was none last month.

The record verifies the operational success of meeting a great engineering challenge that had many frustrating moments along the way. High volume operations and favorable oil pricing would generate estimated free cash flow of C$0.94 a unit in the third quarter of 2007, up from our previous estimate of C$0.87).

We think that would justify a doubling of the quarterly distribution to C$0.80 a unit beginning with the declaration in October to be paid in November (not next January as we stated incorrectly in July). At the new rate, annual distribution yield would be more than 10% and may last indefinitely, subject to oil price that may have further gains ahead.

Physical quality of the asset is unbeatable as it was built at historical cost before the multiplying of engineering and construction charges and is managed with the global expertise of partner owners ExxonMobil (XOM), ConocoPhillips (COP) and Petro-Canada (PCZ).

Originally published on September 5, 2007.