Canadian Natural Resources Ltd. press release
Canadian Natural Resources Limited Announces 2024 Fourth Quarter and Year End Results
TSX - Toronto Stock Exchange · Oil · Bitumen · Natural Gas Liquids · Natural Gas · Canada
Calgary, Alberta--(Newsfile Corp. - March 6, 2025) - Canadian Natural's (TSX: CNQ) (NYSE: CNQ) President, Scott Stauth, commented on the Company's 2024 fourth quarter and year end results, "2024 was an excellent year for us, as we achieved strong growth and set several new production records from our base operations, before including acquisitions that closed in 2024. Additionally, including acquisitions, we achieved record annual average production of over 1,363,000 BOE/d in 2024, which includes record annual liquids production of over one million barrels per day. At our world class Oil Sands Mining and Upgrading assets, we achieved record quarterly and annual Synthetic Crude Oil ("SCO") production of approximately 535,000 bbl/d and 472,000 bbl/d respectively. This strong operational performance resulted in a high annual utilization rate of 99%, anchored by industry leading SCO operating costs of $20.97/bbl (US$15.00/bbl) for Q4/24 and $22.88/bbl (US$16.70/bbl) for full year 2024, which drove significant free cash flow in the year. Thermal in situ production also reached record annual production levels of approximately 271,000 bbl/d combined with strong operating costs of $11.04/bbl (US$8.06/bbl). Our conventional crude oil and liquids-rich natural gas operations continue to provide significant free cash flow with further potential for flexible organic growth. When combined with our entire portfolio, we have significant organic growth opportunities.
Following the previously announced acquisition at the Athabasca Oil Sands Project ("AOSP") that closed in December 2024, and the AOSP swap transaction targeted to close in the first half of 2025, Canadian Natural's working interest will be 100% in the Albian mines and 80% in the non-operated Scotford Upgrader. Further, when combined with Horizon, our total oil sands mining production capacity is currently targeted at approximately 592,000 bbl/d, up from 570,000 bbl/d, following completion of the Horizon Reliability Enhancement Project and the Debottleneck Project at the Scotford Upgrader in 2024. These acquisitions are immediately cash flow accretive and when combined with the production capacity increases, drive significant value to shareholders for decades with no production decline. With our long history of driving value through continuous improvement that is engrained in our culture, we remain focused on delivering additional value from these world class assets, providing incremental and sustainable free cash flow.
Canadian Natural's reserves compete on a global scale supporting long-term organic growth opportunities, with total proved reserves of 15.2 billion BOE and total proved plus probable reserves of 20.1 billion BOE as of year end 2024, both of which increased 9% from year end 2023 levels. With approximately 74% of the Company's total proved reserves being long life low decline, the strength and depth of our assets is evident and provides us with a total proved reserves life index ("RLI") of 33 years and a total proved plus probable RLI of 44 years. This includes Oil Sands Mining and Upgrading reserves that have a total proved RLI of 43 years, providing significant production for decades.
We have a long track record of consistently delivering strong, industry leading results driven by our safe, reliable operations and relentless focus on continuous improvement, which maximizes long-term shareholder value."
Canadian Natural's Chief Financial Officer, Mark Stainthorpe, added "In 2024, we delivered strong financial results, with annual adjusted net earnings of approximately $7.4 billion and adjusted funds flow of $14.9 billion, including Q4/24 adjusted net earnings of approximately $2.0 billion and adjusted funds flow of $4.2 billion. We returned approximately $7.1 billion to shareholders in 2024, inclusive of our sustainable and growing dividend and share repurchases. We increased our quarterly dividend twice in 2024 and subsequent to year end, the Board approved a 4% increase to $2.35 per common share annualized, with 2025 being the 25thconsecutive year of dividend increases by Canadian Natural, with a compound annual growth rate ("CAGR") of 21% over that time.
After the recent acquisitions, our US$ WTI breakeven remains top tier in the low to mid-$40 per barrel range and our balance sheet remains strong with year end metrics including Debt to Book Capitalization at 32% and Debt to Adjusted EBITDA at 1.1x. Our large, diverse portfolio is supported by long life low decline assets, which drive top tier operating costs and low maintenance capital. When combined, it results in significant and sustainable free cash flow that we can repeat for decades."
KEY 2024 ANNUAL OPERATIONAL HIGHLIGHTS
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Record total production of approximately 1,363,000 BOE/d.
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Record total corporate liquids production of approximately 1,006,000 bbl/d.
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Strong total corporate liquids operating costs(1)of $18.56/bbl (US$13.55/bbl).
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Record Oil Sands Mining and Upgrading production of approximately 472,000 bbl/d of zero decline SCO, with upgrader utilization of 99%, including planned turnarounds.
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Industry leading Oil Sands Mining and Upgrading operating costs of $22.88/bbl (US$16.70/bbl) of SCO.
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Record thermal in situ production of approximately 271,000 bbl/d of long life low decline production.
Strong thermal in situ operating costs of $11.04/bbl (US$8.06/bbl).
KEY 2024 FOURTH QUARTER OPERATIONAL HIGHLIGHTS
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Record total production of approximately 1,470,000 BOE/d.
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Record total corporate liquids production of approximately 1,090,000 bbl/d.
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Strong total corporate liquids operating costs of $16.98/bbl (US$12.14/bbl).
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Record Oil Sands Mining and Upgrading production of approximately 535,000 bbl/d of zero decline SCO, with upgrader utilization of 105%, including planned turnarounds.
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Industry leading Oil Sands Mining and Upgrading operating costs of $20.97/bbl (US$15.00/bbl) of SCO.
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Record natural gas production of 2,283 MMcf/d.
CREATING LONG-TERM SHAREHOLDER VALUE
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Canadian Natural has unlocked significant long-term shareholder value at the Albian mines and Scotford Upgrader ("AOSP") since its initial acquisition of a 70% working interest in 2017, followed by 20% in December 2024 and the final 10% in the Muskeg River and Jackpine mines ("Albian mines"), which is targeted to close in the first half of 2025. The Company has strategically acquired this world class asset and added significant value by increasing production and reducing operating costs through implementing process improvements and optimization projects to improve reliability and increase utilization. Since 2017, Canadian Natural has:
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Increased gross production at the Albian mines by 30% or over 70,000 bbl/d. Upgrader capacity was also increased to match the increased production from the mines.
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Decreased AOSP per unit operating costs by over 30% or approximately $10/bbl. This equates to incremental margin of approximately $0.8 billion based on 2024 production.
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With 100% working interest in the Albian mines, once the swap transaction closes, Canadian Natural is targeting to unlock further value through its effective and efficient operations and relentless continuous improvement culture.
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Subsequent to year end, Oil Sands Mining and Upgrading continued to achieve strong production and high utilization. In January 2025 and February 2025, production averaged on a gross basis approximately 634,000 bbl/d over the two months. February 2025 was the highest monthly gross production in our history at approximately 640,000 bbl/das we focus on continuous improvement initiatives combined with strong performance from the Reliability Enhancement Project at Horizon and Debottleneck Project at the Scotford Upgrader.
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Additionally, further value has been unlocked from piping modifications completed during the recent Debottleneck Project at the Scotford Upgrader. These modifications unlock approximately 5,000 bbl/d of annual gross production from the Albian mines, resulting in higher utilization during planned upgrader turnarounds. This increased zero decline production will continue to benefit Canadian Natural for decades, including our increased ownership in the Albian mines.
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The Company's 2025 corporate production guidance will be increased following the closing of the previously announced swap transaction where Canadian Natural will add approximately 31,000 bbl/d of bitumen.
(1)Operating costs are calculated as production expense divided by respective sales volumes. Natural gas and NGLs production volumes approximate sales volumes.
HIGHLIGHTS
| | | Three Months Ended | | | Year Ended | | | | | | | | | | | | | ($ millions, except per common share amounts) | | Dec 31 2024 | | | Sep 30 2024 | | | Dec 31 2023 | | | Dec 31 2024 | | | Dec 31 2023 | | | | Net earnings | $ | 1,138 | | $ | 2,266 | | $ | 2,627 | | $ | 6,106 | | $ | 8,233 | | | | Per common share(1) | - basic | $ | 0.54 | | $ | 1.07 | | $ | 1.22 | | $ | 2.87 | | $ | 3.77 | | | | - diluted | $ | 0.54 | | $ | 1.06 | | $ | 1.21 | | $ | 2.85 | | $ | 3.74 | | | Adjusted net earnings from operations(2) | $ | 1,977 | | $ | 2,071 | | $ | 2,546 | | $ | 7,414 | | $ | 8,533 | | | | Per common share(1) | - basic(3) | $ | 0.94 | | $ | 0.98 | | $ | 1.18 | | $ | 3.49 | | $ | 3.91 | | | | - diluted(3) | $ | 0.93 | | $ | 0.97 | | $ | 1.17 | | $ | 3.46 | | $ | 3.87 | | | Cash flows from operating activities | $ | 3,432 | | $ | 3,002 | | $ | 4,815 | | $ | 13,386 | | $ | 12,353 | | | | Adjusted funds flow(2) | $ | 4,186 | | $ | 3,921 | | $ | 4,419 | | $ | 14,859 | | $ | 15,274 | | | | Per common share(1) | - basic(3) | $ | 1.99 | | $ | 1.85 | | $ | 2.05 | | $ | 6.99 | | $ | 7.00 | | | | - diluted(3) | $ | 1.97 | | $ | 1.84 | | $ | 2.03 | | $ | 6.94 | | $ | 6.93 | | | Cash flows used in investing activities | $ | 10,414 | | $ | 1,274 | | $ | 946 | | $ | 14,095 | | $ | 4,858 | | | | Net capital expenditures(4) | $ | 10,348 | | $ | 1,349 | | $ | 975 | | $ | 14,431 | | $ | 4,909 | | | | Net capital expenditures, excluding net acquisition costs(5) | $ | 1,290 | | $ | 1,349 | | $ | 1,019 | | $ | 5,286 | | $ | 4,883 | | | | Abandonment expenditures | $ | 151 | | $ | 204 | | $ | 149 | | $ | 646 | | $ | 509 | | | | Daily production, before royalties | | | | | | | | | | | | | | | | | | Natural gas (MMcf/d) | | 2,283 | | | 2,049 | | | 2,231 | | | 2,147 | | | 2,151 | | | | Crude oil and NGLs (bbl/d) | | 1,090,002 | | | 1,021,572 | | | 1,047,541 | | | 1,005,603 | | | 973,530 | | | | Equivalent production (BOE/d)(6) | | 1,470,428 | | | 1,363,086 | | | 1,419,313 | | | 1,363,496 | | | 1,332,105 | | | | (1) Per common share and dividend amounts have been updated to reflect the two for one common share split. Further details are disclosed in the Advisory section of the Company's MD&A and in the financial statements for the three months and year ended December 31, 2024 dated March 5, 2025. (2) Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three months and year ended December 31, 2024 dated March 5, 2025. (3) Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three months and year ended December 31, 2024 dated March 5, 2025. (4) Non-GAAP Financial Measure. The composition of this measure was updated in the fourth quarter of 2024 and 2023 and has been updated for all periods presented. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three months and year ended December 31, 2024 dated March 5, 2025. (5) Calculated as net capital expenditures, less net property acquisitions (dispositions) for exploration and evaluation assets and property, plant and equipment for Exploration and Production and Oil Sands Mining and Upgrading, as reported in the Company's MD&A. (6) A barrel of oil equivalent ("BOE") is derived by converting six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of crude oil (6 Mcf:1 bbl). This conversion may be misleading, particularly if used in isolation, or to compare the value ratio using current crude oil and natural gas prices since the 6 Mcf:1 bbl ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. | | | | | | | | | | | | | | | | |
ANNUAL HIGHLIGHTS
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The strength of Canadian Natural's long life low decline asset base, supported by safe, effective and efficient operations, makes our business unique, robust and sustainable. In 2024, the Company generated strong financial results, including:
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Net earnings of approximately $6.1 billion and adjusted net earnings from operations of approximately $7.4 billion.
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Cash flows from operating activities of approximately $13.4 billion.
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Adjusted funds flow of approximately $14.9 billion.
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The Company's disciplined 2024 operating capital program, excluding net acquisition costs, was approximately $100 million under budget at $5.3 billion. Abandonment expenditures were essentially on budget.
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Our 2025 disciplined operating capital budget of approximately $6.0 billion, along with $787 million of abandonment expenditures before recoveries, $90 million on carbon capture and $45 million on a one-time office move, all remain on track.
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In 2024, Canadian Natural delivered record annual average production of 1,363,496 BOE/d, an increase of 2% or approximately 31,400 BOE/d from 2023 levels, or 5% on a production per share basis.
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The Company achieved record annual total liquids production of 1,005,603 bbl/d in 2024, an increase of 3% or approximately 32,000 bbl/d from 2023 levels. Strong annual liquids production in 2024 was driven by:
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Record annual Oil Sands Mining and Upgrading production of 472,245 bbl/d of SCO in 2024, an increase of 5% or approximately 21,000 bbl/d from 2023 levels.
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Industry leading annual Oil Sands Mining and Upgrading operating costs of $22.88/bbl (US$16.70/bbl) of SCO were achieved in 2024, a decrease of 6% from 2023 levels.
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Record annual thermal in situ production of 271,011 bbl/d, an increase of 3% or approximately 9,000 bbl/d from 2023 levels.
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Annual thermal in situ operating costs were strong, averaging $11.04/bbl (US$8.06/bbl) in 2024, a decrease of 16% from 2023 levels.
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During 2024, the Company increased its contracted crude oil transportation capacity to 256,500 bbl/d, expanding its committed volumes to Canada's west coast and to the United States Gulf Coast ("USGC") to approximately 23% of 2025 targeted liquids production based on the mid-point of 2025 corporate annual guidance. The additional egress supports Canadian Natural's long-term sales strategy by targeting expanded refining markets, driving stronger netbacks while also reducing exposure to egress constraints.
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In December 2024, the Company increased its total committed capacity on the Trans Mountain Expansion ("TMX") pipeline to 169,000 bbl/d, an incremental 75,000 bbl/d, further expanding access to Canada's west coast.
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In Q1/24, the Company increased its total committed capacity on the Flanagan South pipeline to 77,500 bbl/d, an incremental 55,000 bbl/d, further expanding the Company's heavy oil diversification and market access to the USGC.
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The Company also has committed capacity of 10,000 bbl/d on the Keystone Base pipeline, with direct access to the USGC.
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In December 2024, Canadian Natural closed the acquisition of Chevron's Alberta assets, including a 20% interest in AOSP and a 70% operated working interest in light crude oil and liquids-rich natural gas assets in the Duvernay play. Both of these acquisitions are targeted to contribute significant additional free cash flow to the Company.
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This acquisition brought Canadian Natural's total working interest in AOSP to 90%, adding approximately 62,500 bbl/d of long life no decline SCO production.
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The Duvernay assets add approximately 60,000 BOE/d in 2025, consisting of 30,000 bbl/d of liquids and 179 MMcf/d of natural gas, providing meaningful near term, drill to fill, liquids-rich natural gas growth.
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Subsequent to year end, Canadian Natural announced an agreement to swap Shell's remaining 10% working interest in the Albian mines for 10% working interest in the Scotford Upgrader and Quest Carbon Capture and Storage facilities. After closing, this swap brings Canadian Natural's total working interest in the Albian mines to 100% and adds approximately 31,000 bbl/d of incremental bitumen production.
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Following closing of the swap transaction, total Oil Sands Mining and Upgrading production capacity increases to approximately 592,000 bbl/d, 90% of which is SCO.
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Canadian Natural maintains a strong balance sheet and financial flexibility, with approximately $4.7 billion in liquidity(1)as at December 31, 2024. Debt ratios remain strong with a Debt to Book Capitalization of 32% and a Debt to Adjusted EBITDA of 1.1x. The Company executed on a number of initiatives in 2024 to strengthen its financial flexibility, including:
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Repaid $320 million of medium-term notes and US$500 million of US debt securities.
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Issued $500 million of medium-term notes and US$1,500 million of US debt securities.
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In connection with the acquisition of assets from Chevron, the Company entered into a $4,000 million non-revolving term credit facility maturing December 2027.
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Extended the Company's $2,425 million revolving syndicated credit facility from June 2025 to June 2028, and its $500 million revolving credit facility from February 2025 to February 2026.
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Subsequent to year end, the Company repaid US$600 million due February 2025.
(1)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of this press release and the Company's MD&A for the three months and year ended December 31, 2024 dated March 5, 2025.
QUARTERLY HIGHLIGHTS
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In Q4/24, the Company generated strong financial results, including:
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Net earnings of approximately $1.1 billion and adjusted net earnings from operations of approximately $2.0 billion.
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Cash flows from operating activities of approximately $3.4 billion.
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Adjusted funds flow of approximately $4.2 billion.
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Canadian Natural achieved record quarterly average production of 1,470,428 BOE/d in Q4/24, consisting of record liquids production of 1,090,002 bbl/d and record natural gas production of 2,283 MMcf/d. The total BOE/d production represents a 4% increase from Q4/23 levels and an 8% increase from Q3/24 levels.
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Oil Sands Mining and Upgrading achieved record quarterly production of 534,631 bbl/d of SCO in Q4/24, including planned turnaround activities. Quarterly production volumes increased 7% or approximately 34,500 bbl/d from Q4/23 levels.
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Industry leading annual Oil Sands Mining and Upgrading operating costs of $20.97/bbl (US$15.00/bbl) were achieved in Q4/24.
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At AOSP, the planned turnaround was successfully completed on October 18, 2024. Due to strong execution, the annual net production impact to AOSP from the planned turnaround was reduced to approximately 5,400 bbl/d, a significant improvement compared to the budgeted annual net production impact of 11,000 bbl/d.
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Additionally, a Debottleneck Project was completed at the Scotford Upgrader which increased gross capacity at AOSP by approximately 8,000 bbl/d in October 2024.
RETURNS TO SHAREHOLDERS
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Returns to shareholders in 2024 were significant, totaling approximately $7.1 billion, comprised of $4.4 billion of dividends and $2.7 billion through the repurchase and cancellation of approximately 55.4 million common shares at a weighted average price of $48.07 per share.
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In Q4/24, the Company returned a total of approximately $1.7 billion directly to shareholders through $1.1 billion in dividends and $0.6 billion through the repurchase and cancellation of approximately 11.7 million common shares at a weighted average price of $47.08 per share.
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Free cash flow is defined as adjusted funds flow, less capital and dividends. The Company will manage the allocation of free cash flow on a forward-looking annual basis, while managing working capital and cash management as required. As previously disclosed on October 7, 2024, the Board of Directors has adjusted the free cash flow allocation policy as follows: