Canadian Oil Sands provides 2008 Budget



    CALGARY, Dec. 14 /CNW/ - (TSX - COS.UN) - Canadian Oil Sands Trust (the
"Trust" or "Canadian Oil Sands" or "we") today announced its Budget for 2008.
All financial figures are in Canadian dollars unless otherwise noted.
    Annual 2008 Syncrude production is estimated to total 115 million barrels
with a range of 110 to 120 million barrels (net to the Trust, equivalent to
42 million barrels with a range of 40 to 44 million barrels). The single point
production estimate incorporates Syncrude's 2008 maintenance program, an
allowance for unplanned outages, and recognition that Syncrude is still
working to establish reliable operations from the Stage 3 facilities. During
2008, Syncrude plans to perform turnarounds of Coker 8-1 (second quarter) and
Coker 8-2 (third quarter) as well as associated maintenance work on other
units. The production range reflects the upside and downside in volumes
Syncrude could experience, depending on operational reliability.
    "Our production outlook for 2008 is substantially less than the Syncrude
facility's design capacity of 128 million barrels annually due to a higher
than average maintenance program, which includes work on two of our three
cokers," said Marcel Coutu, Canadian Oil Sands' President and Chief Executive
Officer. "Syncrude and the Imperial/ExxonMobil team are making progress in
identifying and implementing reliability improvements to enable Syncrude to
achieve Stage 3 design capacity. We are beginning to see some early benefits
in operating efficiencies and with the transition in 2007 to the higher SSP
product quality; however, we continue to expect that it will take another year
or two before realizing the greater payoffs of design production levels and
improved costs."

    
    Canadian Oil Sands' 2008 budget also estimates:

    -   Operating costs to be $26.39 per barrel with purchased energy costs
        accounting for $6.48 per barrel of this amount. We are assuming an
        average AECO natural gas price of $7.00 per gigajoule for 2008.
    -   Cash from operating activities totalling $1,588 million, or $3.31 per
        Trust unit, based on an average WTI crude oil price of US$80 per
        barrel, a discount of Syncrude synthetic crude oil to Canadian dollar
        WTI of $2.50 per barrel, and a foreign exchange rate of $1.00 US/Cdn
        during 2008.
    -   Annual Crown royalties of $448 million, or $10.60 per barrel.
        Syncrude is currently paying Crown royalties at the rate of
        25 per cent of gross plant revenue less Syncrude operating, non-
        production and capital costs. Effective January 1, 2009, the Alberta
        government is introducing new Crown royalty terms. Syncrude has a
        Crown Agreement with the Alberta government that codifies the current
        royalty terms to December 31, 2015 as well as provides the option for
        Syncrude to convert from paying royalties based on synthetic crude
        oil production to a royalty based on bitumen production.
    -   Capital expenditures to total $279 million with approximately
        82 per cent directed to maintenance of operations and the remaining
        18 per cent to the Syncrude Emissions Reduction Project ("SERP"). The
        SERP is a multi-year special project expected to reduce sulphur
        dioxide emissions by 60 per cent on an absolute basis from today's
        approved levels. A revision to the current $772 million cost estimate
        for this project is expected in the first half of 2008.
    -   Distributions paid in 2008 to be 100 per cent taxable as other
        income. The actual taxability of the distributions will be determined
        and reported to Unitholders prior to the end of the first quarter of
        2009.
    -   The Trust's crude oil production remains unhedged, and under the
        current financing plan, we do not intend to undertake any crude oil
        hedging transactions. The Trust may hedge its crude oil production in
        the future depending on the financing requirements of growth
        opportunities and the business environment.
    

    Changes in certain factors and market conditions could potentially impact
this Budget. In particular, cash from operating activities is highly sensitive
to crude oil prices; every US$1.00 per barrel change in the WTI crude oil
price impacts cash from operating activities by $0.06 per Trust unit. At the
current time, the estimates do not anticipate material increases in 2008
capital or operating costs as a result of the operational incident in December
2007. Repairs in regards to this incident are in progress and further
information may be issued when known. A sensitivity analysis of the key
factors affecting the Trust's Budget is provided in its December 14, 2007
Guidance Document.

    Syncrude's growth plans

    The Syncrude joint venture owners have established a Growth Development
Planning and Major Projects Committee to pursue Syncrude's growth plans. The
committee is chaired by Canadian Oil Sands and primarily staffed by
Imperial/ExxonMobil. The growth plans include a Stage 3 debottleneck and
Stage 4 expansion, which are ultimately expected to increase production to
about 500,000 barrels per day, gross to Syncrude, late in the next decade.
Preliminary design work on these expansions will commence in 2008 and the
associated costs are included in our budget as non-production costs. Syncrude
has not yet identified a capital budget for the future costs associated with
its expansion plans, and the plans will require approval by the Syncrude
owners.
    More information on the Trust's budget is provided in the 2008 guidance
document, which is available on the Trust's web site at www.cos-trust.com
under "investor information". Canadian Oil Sands intends to continue providing
quarterly updates to its guidance.

    Located near Fort McMurray, Alberta, Syncrude Canada operates large
oil-sands mines and an upgrading facility that produces a light, sweet crude
oil on behalf of its joint venture owners, which include Canadian Oil Sands
Limited, ConocoPhillips Oilsands Partnership II, Imperial Oil Resources, Mocal
Energy Limited, Murphy Oil Company Ltd., Nexen Oil Sands Partnership, and
Petro-Canada Oil and Gas.
    Canadian Oil Sands provides a pure investment opportunity in the Syncrude
Project through its 36.74 per cent working interest. The Trust is an
open-ended investment trust managed by Canadian Oil Sands Limited and has
approximately 479.3 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
release contain "forward-looking statements" under applicable securities law.
Forward-looking statements in this release include, but are not limited to,
statements with respect to: the expected production in 2008; the reduced
capital spending; the expected operating costs for 2008; the capital forecast
for 2008; the type of maintenance that will be required in 2008, including,
without limitation, expectations regarding the impact on operating and capital
costs and production as a result of the December 2007 operational incident;
energy costs for 2008; the amount of Crown royalties in 2008; the amount of
cash from operating activities in 2008; and WTI prices and foreign exchange
rates in 2008. 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 release include, but are not limited to: labour and cost
pressures in the oil sands industry and in the Fort McMurray area in
particular; the regulatory changes that impact oil and gas operations; the
nature of the regulations imposed by the federal government on income trusts;
general economic, business and market conditions; commodity prices; and such
other risks and uncertainties described from time to time in the reports and
filings made with securities regulatory authorities by the Trust. You are
cautioned that the foregoing list of important factors is not exhaustive.
Furthermore, the forward-looking statements contained in this release are made
as of the date of this release, and the Trust does not undertake any
obligation to update publicly or to revise any of the included forward-looking
statements, whether as a result of new information, future events or
otherwise. The forward-looking statements contained in this release are
expressly qualified by this cautionary statement. The information was approved
by management on December 14, 2007 and circumstances after this date may
change the outcomes or results achieved.

    Canadian Oil Sands Limited
    Marcel Coutu
    President & Chief Executive Officer

    Units Listed - Symbol: COS.UN
    Toronto Stock Exchange





For further information:

For further information: Siren Fisekci, Director Investor Relations,
(403) 218-6228, investor_relations@cos-trust.com, Web site: www.cos-trust.com

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CANADIAN OIL SANDS TRUST

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