Page 4 - NorthAmOil Week 10 2023

NorthAmOil COMMENTARY NorthAmOil

CNRL reports record profits

as Canadian upstream

investment rises

Canadian Natural Resources Ltd has posted record profits for 2022,

with the result coming amid predictions of investment in Canada’s
oil and gas industry continuing to rise

CANADA CANADIAN Natural Resources Ltd (CNRL) CAD0.90 ($0.65) per common share, up from
has reported record profits for the whole of 2022, CAD0.85 ($0.61) per common share.
WHAT: bolstered by oil prices hitting a 14-year-high last CNRL delivered around CAD10.5bn
CNRL achieved record year, even though they subsequently fell back ($7.6bn) in shareholder returns in 2022. This
profits in 2022. somewhat. The result is in line with a strong per- consisted of CAD5.6bn ($4.0bn) in share repur-
formance seen across all of Canada’s leading pro- chases and CAD4.9bn ($3.5bn) in dividends.
WHY: ducers. And while it comes as these companies This equated to roughly CAD9.25 ($6.69) per
Oil prices rose to multi- continue to prioritise returns to shareholders, share in direct returns to shareholders in 2022,
year highs in the first half there are expectations that investment in Can- noted the company.
of the year. ada’s oil and gas industry will continue to grow CNRL’s board of directors has also decided to
in 2023. accelerate shareholder returns to 100% of free
WHAT NEXT: cash flow when the company’s net debt reaches
The Canadian Association CNRL performance CAD10bn ($7bn), representing an adjustment
of Petroleum Producers Calgary-based CNRL posted an annual profit from the previous CAD8bn ($6bn) net debt
is forecasting that of CAD10.9bn ($8.0bn), up from CAD7.7bn level.
investment in the ($5.6bn) a year earlier, and 2022 adjusted net The increase in dividends and the policy of
country’s oil and gas earnings from operations of around CAD12.9bn accelerated free cash flow made up for the quar-
industry will continue to ($8.8bn). Cash flows from operating activi- terly earnings that missed outlooks, making the
rise in 2023. ties were about CAD19.4bn ($14.0bn) for the company’s results “neutral”, an Eight Capital
year, with an adjusted funds flow of around Research analyst, Phil Skolnick, told Reuters. The result is in
CAD19.8bn ($14.3bn). CNRL achieved record annual production of
The company’s free cash flow was CAD10.9bn 1.3mn barrels of oil equivalent per day (boepd) line with a strong
($7.9bn) and its base capital expenditures were in 2022, an increase of 4% from 2021 levels, and performance
about CAD4.0bn ($2.9bn). 8% growth on a production per share basis.
For the fourth quarter of 2022, CNRL “This growth was largely driven by our strate- seen across all of
reported adjusted net earnings of CAD1.5bn gic investment in our robust natural gas assets,
($1.1bn), or CAD1.96 ($1.42) per share, below which grew 23% from 2021 levels, achieving Canada’s leading
analysts’ average prediction of CAD2.27 ($1.64) record annual natural gas production of approx-
per share. imately 2.1bn cubic feet (59.5mn cubic metres) producers.
CNRL, Canada’s largest oil and gas pro- per day,” said CNRL’s president, Tim McKay.
ducer, had its results affected by extreme winter “Our culture of continuous improvement,
weather in December that disrupted its produc- focus on cost control and disciplined capital
tion in the oil sands, but this was not enough allocation continue to drive strong operational
to stop the company from achieving its record and financial results, maximising value for
profit. shareholders,” he said.
The CNRL profit may have missed market CNRL reported that because of extreme cold
expectations but it still means that Canada’s weather in December 2022, it had to complete
five largest oil sands producers together earned multiple mining equipment repairs, result-
CAD35bn ($25bn) in 2022, another record. ing in reduced production at its Horizon oil
Because of its profitability, CNRL approved sands plant that extended into January. This is
a 6% increase to the quarterly dividend to expected to have an impact on production for

P4 www. NEWSBASE .com Week 10 09•March•2023