CALGARY, March 13 /PRNewswire-FirstCall/ -- (TSX - COS.UN) - Canadian Oil Sands Trust (the "Trust", "Canadian Oil Sands" or "we") today announced that Syncrude plans to perform maintenance on Coker 8-3 to remove coke residue build-up within the vessel. Following several weeks of analysis regarding the coker's performance, Syncrude believes this residue has led to fouling within the coker reactor, resulting in constrained production rates from the unit since late 2006. Syncrude anticipates that the work will occur during the second quarter of 2007.
Coker 8-3 is Syncrude's newest coker and came onstream in 2006 as part of the Stage 3 expansion. We had expected that a period of optimizing the performance of the new Stage 3 operating units would be required before we could ramp up to total productive capacity of 350,000 barrels per day, gross to Syncrude.
Syncrude is in the process of rescheduling the turnarounds for its original cokers with the turnaround planned for the fall of 2007 possibly being postponed to early 2008. The decision to proceed with the maintenance work on Coker 8-3 in the second quarter is expected to enable the coker to return to service at higher production rates, which will allow Syncrude to reduce throughput on the other cokers and thereby extend their run lengths. We expect the modifications to the new hydrogen plant steam generation system will be performed as planned in the fall of 2007, which should enable Syncrude to transition all of its production volumes to the higher Syncrude(TM) Sweet Premium quality level by the fourth quarter of this year.
Canadian Oil Sands is maintaining its current production estimate for Syncrude of 110 million barrels annually, or 40.4 million barrels net to the Trust. This estimate is based on quarterly production of: 27 million barrels in Q1, 23 million barrels in Q2, 30 million barrels in Q3, and 30 million barrels in Q4. This quarterly production outlook has been revised from the breakdown provided in our January 29, 2007 Guidance Document. We also have reduced the top end of our annual production range from 120 million barrels to 115 million barrels, gross to Syncrude, to reflect the reduced likelihood of achieving higher than expected operational reliability and stability. The low end of the range has been maintained at 105 million barrels as the possibility of an additional coker turnaround continues to exist, particularly given the uncertainty in postponing the fall 2007 turnaround. The current production range estimate, net to the Trust, is 39 to 42 million barrels.
Non-resident ownership declines to 33 per cent
Based on information from the statutory declarations by Unitholders, we estimate that, as of February 8, 2007 approximately 33 per cent of our Unitholders are non-Canadian residents with the remaining 67 per cent being Canadian residents. Canadian Oil Sands' Trust Indenture currently provides that not more than 49 per cent of its Units can be held by non-Canadian residents.
The Trust continues to monitor its foreign ownership levels on a regular basis through declarations from Unitholders, and posts the results of the declarations on its web site at http://www.cos-trust.com/ under investor information, frequently asked questions. This section of the web site and page 45 of the Management's Discussion and Analysis section of the Trust's 2005 annual report describe the Trust's steps for managing its non-Canadian resident ownership levels.
Canadian Oil Sands Trust provides a pure investment opportunity in the oil sands through its 36.74 per cent working interest in the Syncrude Project. Located near Fort McMurray, Alberta, Syncrude operates large oil-sands mines and an upgrading facility that produces a light, sweet crude oil. The Trust is an open-ended investment trust managed by Canadian Oil Sands Limited and has approximately 479 million units outstanding, trading on the Toronto Stock Exchange under the symbol COS.UN.
Advisory: In the interest of providing Canadian Oil Sands Trust ("Canadian Oil Sands" or the "Trust") 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 expected timing and impact of maintenance on Coker 8-3 and the other cokers as well as a hydrogen plant; the expected time to produce Syncrude(TM) Sweet Premium and the production outlook for 2007.
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, especially regarding technical difficulties relating to complex equipment such as cokers; labour disruptions and disputes; 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
