Canadian Oil Sands to stay in the black even if crude prices keep falling – Mining.com

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Canadian Oil Sands to stay in the black even if crude prices keep falling – Mining.com

by pmnationtalk on December 3, 2015289 Views

December 2, 2015

Even if oil prices fall below $45 per barrel, Canadian Oil Sands (TSX:COS), which is currently the target of a $4.3 billion takeover bid by Suncor (TSX, NYSE:SU), says it will still be able to make money.

In its recently published 2016 budget plan, the company unveiled a pared-back capital budget that reduces capital spending by 20% year-over-year to $295 million in 2016. In that scenario, COS could continue to operate as an independent entity and be cash flow positive, the company said.

“Canadian Oil Sands can clearly withstand the prevailing low oil price environment,” President and CEO Ryan Kubik said during a conference call Tuesday.

The oil sands player, which is under pressure to reduce costs and improve the reliability of its output, said it aims to produce at least 35 million barrels of oil next year, about 10% higher than the full-year estimate for 2015. Capital expenses are estimated at $220 million, based on a $50 U.S. benchmark crude, versus about $41 currently.

Read More: http://www.mining.com/canadian-oil-sands-to-stay-in-the-black-even-if-crude-prices-keep-falling/

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