CALGARY—Battling a hostile takeover bid from rival Suncor Energy Inc. whilst enduring low oil prices that have chipped 41 per cent off its selling price and production volumes, Canadian Oil Sands Ltd. reported its third-quarter earnings Oct. 29.
The company recorded a net loss of $174 million or 36 cents per share, which it said mainly reflects unrealized foreign exchange losses on the revaluation of U.S. dollar denominated long-term debt.
Meanwhile, the company pointed to a new low-cost operating environment at Syncrude that has achieved more than $1 billion in operating and capital cost reductions in the first nine months of 2015—$367 million of which are attributable to COS’ operations.
“The Syncrude project is entering a new era of lower cost operations. A major period of reinvestment that will sustain production for decades has come to a close and Syncrude is driving down costs in its base operations,” Ryan Kubik, president and CEO, said. “Canadian Oil Sands is demonstrating its ability to weather this period of low oil prices and even a modest improvement in oil prices will generate robust expansion of cash flow.”
Despite the loss, the company’s board of directors also continues to claim Suncor’s $4.3 billion takeover bid “substantially undervalues” COS.
“[The bid] is not in the best interests of COS and its shareholders,” the company said. “The board unanimously recommends shareholders reject this undervalued, opportunistic, and exploitive bid.”
The renewed shareholder urging follows remarks made by Suncor CEO, Steve Williams, in which he said the takeover bid was good enough given the low oil prices. The comments led many onlookers to speculate Canada’s largest energy company would not sweeten the deal.