is the worst over for COS?There are multiple factors underpinning this decline in operating costs. Approximately 34% of the decline is because of cheaper natural gas and diesel costs. While this is important, it is far more significant to note that the remainder of the difference is due to declines in production and maintenance costs as a result of the company improving its cost structure. These declines in production and maintenance are attributable partially to increased efficiencies, labour, and supply cost improvements. They are also attributable to the fact that Canadian Oil Sands recently completed four major capital projects, all of which will improve reliability and reduce maintenance costs. For example, the recent completion of the Mildred Lake Mine Train replacement project will not only reduce maintenance expenses, but will also improve reliability since redundancies built into the project can reduce the impact of unplanned outages Canadian Oil Sands is now predicting cost reductions in the mid-range of its $260-400 million target, but is targeting the higher end of the range. This has resulted in Canadian Oil Sands guiding $407 million in cash flow from operations, or $0.84 per share, at an estimated oil price of US$55 (below current levels). This is up from Canadian Oil Sands’ previous $0.74 cash flow guidance for 2015. Given Canadian Oil Sands’ oil price sensitivity should oil prices increase to US$60, this would result in $1.17 per share of cash flow, or $571 million in cash flow from operations, which is well in excess of the company’s $429 million in capital expenses With $1.1 billion of unused credit facility space, a lower cost structure, and oil prices that have possibly stabilized in the US$50-60 range, there is good reason to believe the worst is over for Canadian Oil Sands.