Canadian Oil Sands Trust chopped its quarterly distribution to shareholders by 80 per cent to 15 cents per unit Wednesday as it reported fourth-quarter net income had fallen by 76 per cent to $124 million compared with the same period of 2007.

“Crude oil prices have continued to decline since our third-quarter release, significantly reducing earnings,” said Marcel Coutu, president and chief executive, in a news release. “With an expectation that near-term crude oil prices will remain weak, we deemed it prudent to reduce the distribution to reflect this lower price environment and to preserve our financial flexibility."

Canadian Oil Sands, which is the largest single shareholder in Syncrude Canada with a 36.74 per cent working interest, cut its distribution by 40 per cent to 75 cents per unit after third-quarter results due to the sliding oil price.

The company’s shares closed down 60 cents at $17.40 on the Toronto Stock Exchange, a 69 per cent decline from its 52-week high of $56 last June 6.

Sales volumes in the fourth quarter of 2008 totalled 110,200 barrels per day, compared with 116,400 bpd in the equivalent 2007 period.

Production volumes in the fourth quarter of 2008 were reduced by a scheduled coker turnaround and constrained bitumen production while the 2007 fourth quarter was affected by a shorter, unplanned coker outage, Canadian Oil Sands stated.

Sales volumes in 2008 came to 106,000 bpd compared with 112,300 bpd in 2007, blamed on two planned coker turnarounds and “reliability issues” that constrained bitumen production.

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