CALGARY — Canadian Oil Sands Ltd. (TSX:COS) is boosting its dividend by 17 per cent after reporting a first-quarter profit of $321 million and beating expectations.
The Calgary-based company, the biggest partner in the Syncrude oilsands mine, said Monday it will increase its quarterly payment to shareholders to 35 cents per share from 30 cents.
“The increase in the dividend to $0.35 per share reflects confidence in our business fundamentals and the commitment to delivering excess cash to our investors,” said Marcel Coutu, president and chief executive officer.
“Continued strength in oil prices and Syncrude’s solid operating base generated strong revenues, resulting in a growing cash balance over the first quarter.”
The dividend increase follows a profit of 66 cents per share for the first three months of the year, down from $324 million, or 67 cents per share a year ago.
Revenue was up to $1.04 billion, from $1.01 billion.
Analysts polled by Thomson Reuters were on average expecting a profit of 54 cents per share and revenue of $944 million.
However, the company also said Monday that it was also lowering its full-year production targets.
Its 2012 production range estimate is now 106 million to 114 million barrels, down from an upper estimate of 117 million barrels. It takes into account actual production in the first quarter, an upcoming maintenance outage and an allowance for unplanned downtime.
It also decreased its estimate for capital expenditure by $241 million to $1.21 billion, due to timing adjustments for major project spending.
Canadian Oil Sands owns a 37 per cent stake in the Syncrude Canada oilsands mine north of Fort McMurray, Alta., the biggest such project of its kind in the world.
Syncrude’s other owners include Imperial Oil Ltd. (TSX:IMO), Nexen Inc. (TSX:NXY), Suncor Energy Inc. (TSX:SU), China’s Sinopec, Mocal Energy Ltd. and Murphy Oil Co. Ltd.
Late last year, the Syncrude partners backed away from a plan that would push raw bitumen output to 600,000 barrels per day by the end of the decade. They said they’d rather focus on improving existing operations for now than invest in new projects.
In November, a disruption at one of the Syncrude upgrader’s coking units reduced output by about 100,000 per day. A coker breaks down heavier crude into lighter oils, gases, and petroleum coke and is an important step in the upgrading process. The synthetic crude oil that comes out of the upgrader can then be refined into products like gasoline and diesel.
Shares in the company, which reported its results after markets closed, gained 21 cents to $21.83 on the Toronto Stock Exchange.