Despite lower-than-expected production volumes, cash flow from operations totalled $275 million in the 2013 first quarter, driven largely by a $94 per barrel West Texas Intermediate ("WTI") oil price and an $0.88 per barrel SCO premium relative to WTI. COS realized a $96 per barrel average selling price, 20 per cent higher than the $80 per barrel forecast in our February 21, 2013 Outlook. Operating expenses averaged $41.20 per barrel, reflecting the unplanned outages. Syncrude's major capital projects progressed as planned with $268 million of capital spending (net to COS) in the quarter.
Given the first quarter results, we have updated our 2013 Outlook to reflect a higher $85 per barrel realized selling price, and a lower 105 million barrel (gross to Syncrude) production estimate. Our revised 2013 Outlook estimates $1.1 billion of 2013 cash flow from operations, which, combined with our $1.5 billion of cash at March 31, 2013, allows us to fund our $1.3 billion of capital expenditures and maintain the $0.35 per Share quarterly dividend in 2013.
Highlights Three Months Ended March 31 2013 2012----------------------------------------------------------------------------Cash flow from operations(1) ($ millions) $ 275 $ 454 Per Share(1) ($/Share) $ 0.57 $ 0.94Net income ($ millions) $ 177 $ 318 Per Share, Basic and Diluted ($/Share) $ 0.37 $ 0.66Sales volumes(2) Total (mmbbls) 8.6 9.8 Daily average (bbls) 95,683 108,108Realized SCO selling price ($/bbl) $ 96.11 $ 97.07West Texas Intermediate ("WTI") (average $US/bbl) $ 94.36 $ 103.03SCO premium (discount) to WTI $ 0.88 $ (5.89) (weighted average $/bbl)Operating expenses ($/bbl) $ 41.20 $ 32.58Capital expenditures ($ millions) $ 268 $ 141Dividends ($ millions) $ 170 $ 145 Per Share ($/Share) $ 0.35 $ 0.30----------------------------------------------------------------------------(1) Cash flow from operations and cash flow from operations per Share are additional GAAP financial measures and are defined in the "Additional GAAP Financial Measures" section of this MD&A.(2) The Corporation's sales volumes differ from its production volumes due to changes in inventory, which are primarily in-transit pipeline volumes. Sales volumes are net of purchases.Review of Financial Results
Cash Flow from Operations
To see the Cash Flow from Operations graphic, please select the following link: http://media3.marketwire.com/docs/424cos1.jpg.
Cash flow from operations decreased to $275 million, or $0.57 per Share, in the first quarter of 2013 from $454 million, or $0.94 per Share, in the first quarter of 2012, primarily reflecting lower sales volumes and higher current taxes, partially offset by lower Crown royalties.
SCO production in the 2013 first quarter totalled 23.4 million barrels, or 260,400 barrels per day, a 13 per cent decrease from first quarter 2012 production of 26.8 million barrels, or 294,800 barrels per day. Production volumes in the first quarter of 2013 reflect unplanned outages in extraction and hydrotreating units, while 2012 first quarter production volumes reflect maintenance on Coker 8-1. Net to the Corporation, sales volumes decreased to 8.6 million barrels, or 95,700 barrels per day, in the 2013 first quarter from 9.8 million barrels, or 108,100 barrels per day, in the 2012 first quarter.
