Canadian Oil Sands has increased estimated 2013 sales, net of crude oil purchases and transportation expense, to $3,280 million, due to an increase in the forecast realized selling price partially offset by a decrease in estimated production volumes.
The forecast realized selling price for 2013 has increased $5 per barrel to $85 per barrel and assumes a U.S. $85 per barrel WTI oil price, no SCO premium/discount to Canadian dollar WTI, and a foreign exchange rate of $1.00 U.S./Cdn.
Syncrude has performed the maintenance required to address the extraction issues and is investigating the root cause of the hydrotreating outages. While we believe the issues that impacted operations since late 2012 have been resolved, we have reduced our 2013 Syncrude production range to 100 to 110 million barrels and adjusted our single-point production estimate to 105 million barrels (287,700 barrels per day). Net to Canadian Oil Sands, the single-point estimate is equivalent to 38.6 million barrels (105,700 barrels per day). The revised estimate reflects a planned turnaround of Coker 8-1 in the second half of the year.
We estimate 2013 operating expenses of $1,482 million, or $38.41 per barrel, reflecting actual costs incurred to date and a natural gas price assumption of $3.50 per gigajoule.
We estimate 2013 Crown royalties of $109 million. Mainly as a result of capital spending on major projects, allowable deductible costs for royalty purposes in 2013 are anticipated to exceed deemed bitumen revenues. As a result, we are estimating minimum Crown royalties at one per cent of gross deemed bitumen revenues (instead of 25 per cent of net deemed bitumen revenues) in 2013. We continue to recognize the transition and upgrader growth capital recapture royalties.
We estimate current taxes of $350 million for 2013.
Based on these assumptions, we estimate 2013 cash flow from operations of $1,097 million, or $2.26 per Share.
Estimated 2013 capital expenditures have decreased to $1,298 million, due to adjustments to the expected timing of regular maintenance capital spending.
We expect cash levels to decrease over the next two years as we fund major capital projects and repay the debt maturity in August, 2013. As a result, net debt levels are expected to rise to $1 billion to $2 billion by the end of 2014, coincident with reduced capital expenditure risk from the substantial completion of the major capital projects.
Changes in certain factors and market conditions could potentially impact Canadian Oil Sands' Outlook. The following table provides a sensitivity analysis of the key factors affecting the Corporation's performance.
Outlook Sensitivity Analysis (April 30, 2013)
Cash Flow from Operations Increase $ /Variable Annual Sensitivity $ millions(1,2) Share(1,2)----------------------------------------------------------------------------Syncrude operating expense decrease Cdn$1.00/bbl $ 29 $ 0.06Syncrude operating expense decrease Cdn$50 million $ 14 $ 0.03WTI crude oil price increase U.S.$1.00/bbl $ 29 $ 0.06Syncrude production increase 2 million bbls $ 47 $ 0.10Canadian dollar weakening U.S.$0.01/Cdn$ $ 25 $ 0.05AECO natural gas price decrease Cdn$0.50/GJ $ 19 $ 0.04--------------------------------------------------------------------------------------------------------------------------------------------------------(1) Canadian Oil Sands anticipates recording approximately $350 million in current taxes in 2013. These sensitivities are after the impact of taxes.(2) These sensitivities assume Canadian Oil Sands remains in minimum royalty in 2013.
