CANADIAN OIL SANDS TRUST

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Trust News Releases

Canadian Oil Sands provides 2008 Budget

Calgary, AB., Dec. 14, 2007 (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.


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Canadian Oil Sands Limited
Marcel Coutu
President & Chief Executive Officer

Units Listed – Symbol: COS.UN
Toronto Stock Exchange
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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