Canadian Natural Resources Ltd. press release

Canadian Natural Resources Limited Announces 2025 Fourth Quarter and Year End Results

2026-03-05

TSX - Toronto Stock Exchange · Oil · Bitumen · Natural Gas Liquids · Natural Gas · Canada · Corporate Finance

Canadian Natural Resources Limited Announces 2025 Fourth Quarter and Year End Results

Calgary, Alberta--(Newsfile Corp. - March 5, 2026) - Canadian Natural's (TSX: CNQ) (NYSE: CNQ) President, Scott Stauth, commented on the Company's fourth quarter and year end 2025 results, "The year 2025 was the best operational year in the Company's long history of maximizing value for our shareholders. We set several production records, lowered our operating costs and capital expenditures came in under our forecast. We grew organically and completed several accretive acquisitions, including the Palliser Block assets in southern Alberta and liquids-rich Montney assets in the Grande Prairie area, along with increasing our ownership in the Albian mines to 100% through an asset swap. As a result, we achieved record annual production of 1,571 MBOE/d in 2025, resulting in year-over-year growth of 15% or approximately 207 MBOE/d from 2024 levels. We also achieved record annual liquids production of 1,146 Mbbl/d, of which 65% was comprised of Synthetic Crude Oil ("SCO"), light crude oil and NGLs, which are not subject to widening heavy crude oil differentials.

Strong execution across our large, diverse asset base continues to provide significant opportunities to create shareholder value in 2026 and beyond. This is evident by our increased production, strong free cash flow and growth in reserves achieved in 2025, through organic growth and accretive acquisitions. These successes provided the Board of Directors with the confidence to approve a dividend increase and an enhancement to our direct shareholder returns, by adjusting our net debt targets as a part of our free cash flow allocation policy. Additionally, we are decreasing our 2026 operating capital forecast by approximately $310 million, following the completion of a strategic acquisition early in 2026, and increasing our 2026 production guidance range to 1,615 MBOE/d and 1,665 MBOE/d from the previous guidance range of 1,590 MBOE/d and 1,650 MBOE/d.

Canadian Natural's reserves are significant when compared to other major oil companies, which support long-term organic growth opportunities. Year end 2025 total proved reserves of 15.91 billion BOE and total proved plus probable reserves of 20.75 billion BOE represent increases of approximately 4% and 3%, respectively, from year end 2024 levels. With approximately 73% of the Company's total proved reserves being long life low decline, the strength and depth of our assets is evident and provide us with a total proved reserves life index ("RLI") of 31 years and a total proved plus probable RLI of 40 years. We continue to deliver strong total proved Finding, Development and Acquisition ("FD&A") costs, including changes in Future Development Cost ("FDC"), achieving an industry leading FD&A in 2025 of $3.64/BOE for total proved reserves and $2.42/BOE for total proved plus probable reserves."

Canadian Natural's Chief Financial Officer, Victor Darel, added "In 2025, we generated adjusted net earnings of $7.4 billion or $3.56 per share, and adjusted funds flow of $15.5 billion or $7.39 per share. Throughout the year, we completed several accretive acquisitions, increasing production and cash flow, while reducing net debt by approximately $2.7 billion to just under $16 billion at year end 2025. We returned approximately $9.0 billion to our shareholders in 2025, including $4.9 billion in dividends, $1.4 billion in share repurchases and $2.7 billion in net debt reduction. Subsequent to year end, the Board approved an approximate 6.4% increase to our quarterly dividend, bringing the annualized dividend up to $2.50 per common share. This marks 2026 as the 26th consecutive year of dividend increases by Canadian Natural, with a compound annual growth rate ("CAGR") of 20% over that time, demonstrating the sustainability of our business model, our strong balance sheet and the strength of our diverse, long life low decline reserves and asset base.

Additionally, the Board of Directors have, effective January 1, 2026, adjusted the net debt target levels in our free cash flow allocation policy which results in an acceleration of the next increase to direct shareholder returns. Now, when net debt falls below $16 billion, compared to our previous target of $15 billion, we will increase direct shareholder returns in the form of share repurchases to 75% of free cash flow generated, managed on a forward-looking basis.

Our financial flexibility and long life low decline asset base provide a strong foundation and a competitive advantage with low maintenance capital requirements. Our US$ WTI breakeven remains top tier in the low to mid-$40 per barrel range. Our balance sheet is strong with significant liquidity of approximately $6.3 billion at year end 2025. Our excellent results highlight the cash flow generating capability of our top tier asset base with strong year end metrics including Debt to Book Capitalization at 26% and Debt to Adjusted EBITDA at 0.7x."

2025 ANNUAL HIGHLIGHTS

Generated net earnings of approximately $10.8 billion and adjusted net earnings from operations of $7.4 billion.

Generated adjusted funds flow of approximately $15.5 billion.

Returns to shareholders totaled approximately $9.0 billion, comprised of $4.9 billion in dividends, $1.4 billion in share repurchases and $2.7 billion through reduction in the Company's net debt.

Approximately 33.5 million common shares were repurchased and cancelled in 2025 at a weighted average price of $43.28 per share.

Record total annual production of approximately 1,571,000 BOE/d, an increase of 207,000 BOE/d or 15% from 2024 levels.

Record total liquids production of approximately 1,146,000 bbl/d, an increase of 141,000 bbl/d or 14% from 2024 levels.

Strong total corporate liquids operating costs(1) of $18.44/bbl (US$13.19/bbl), compared to $18.56/bbl (US$13.55/‍bbl) in 2024.

Record Oil Sands Mining and Upgrading production of approximately 565,000 bbl/d of zero decline SCO, with upgrader utilization of 100%, including the planned turnaround at the Athabasca Oil Sands Project ("AOSP").

Industry leading Oil Sands Mining and Upgrading operating costs of $22.66/bbl (US$16.21/bbl), compared to $22.88/bbl (US$16.70/bbl) in 2024.

Record thermal in situ production of 275,000 bbl/d of long life low decline production.

Record natural gas production of 2,547 MMcf/d, an increase of 400 MMcf/d or 19% from 2024 levels.

Canadian Natural reduced net debt by approximately $2.7 billion from 2024 year end levels.

Repaid US$1.2 billion of US dollar debt securities.

Issued C$1.65 billion in 3, 5 and 10 year medium-term notes.

2025 FOURTH QUARTER HIGHLIGHTS

Generated net earnings of approximately $5.3 billion and adjusted net earnings from operations of $1.7 billion.

Generated adjusted funds flow of approximately $3.7 billion.

Returns to shareholders totaled approximately $2.7 billion, comprised of $1.2 billion in dividends, $0.3 billion in share repurchases and $1.2 billion through reduction in the Company's net debt.

Record total quarterly production of approximately 1,659,000 BOE/d, an increase of 188,000 BOE/d or 13% from Q4/24 levels.

Record total liquids production of approximately 1,215,000 bbl/d, an increase of 125,000 bbl/d or 12% from Q4/24 levels.

Record Oil Sands Mining and Upgrading production of approximately 620,000 bbl/d of zero decline SCO with upgrader utilization of 105%.

Industry leading Oil Sands Mining and Upgrading operating costs of $21.84/bbl (US$15.66/bbl).

On November 1, 2025, Canadian Natural closed the AOSP asset swap with Shell and now owns and operates 100% of the Albian oil sands mines and associated reserves.

The transaction added approximately 31,000 bbl/d of annual, zero decline bitumen production to our Oil Sands Mining and Upgrading portfolio.

(1) Operating costs are calculated as production expense divided by respective sales volumes. Natural gas and NGLs production volumes approximate sales volumes.

ACCELERATING SHAREHOLDER RETURNS WITH REVISED FREE CASH FLOW ALLOCATION POLICY

As a result of the Company's continued strong execution and resilience to volatile commodity prices, combined with continued growth of production, cash flow and reserves through strategic acquisitions and organic development, Canadian Natural is increasing its annual dividend and enhancing direct shareholder returns by updating its net debt targets within the Company's free cash flow allocation policy. The policy was last adjusted in October 2024, when on a proforma basis, including the acquired Chevron assets, annual production was approximately 1,465,000 BOE/d. Since then, through organic growth and strategic acquisitions, annual production has grown by approximately 12% or 175,000 BOE/d, to the mid-point of updated 2026 guidance.

The Board of Directors have approved an approximate 6.4% increase to the quarterly cash dividend to $0.625 per common share, from $0.5875 per common share, payable on April 7, 2026 to shareholders of record at the close of business on March 20, 2026.

This dividend increase represents an annualized dividend of $2.50 per common share and demonstrates the confidence that the Board has in the sustainability of our business model, our strong balance sheet and the strength of our diverse, long life low decline reserves and asset base.

Canadian Natural's leading track record of 26 consecutive years of dividend growth continues with a CAGR of 20% over that time.

The Company's free cash flow allocation policy has been revised based upon the increase in the Company's reserves and production from when it was last reviewed in 2024.

When net debt is at or above $16 billion (formerly $15 billion), 60% of free cash flow will be allocated to direct shareholder returns in the form of share repurchases and 40% to the balance sheet.

When net debt is between $13 billion (formerly $12 billion) and $16 billion (formerly $15 billion), 75% of free cash flow will be allocated to direct shareholder returns in the form of share repurchases and 25% to the balance sheet.

When net debt is at or below $13 billion (formerly $12 billion), 100% of free cash flow will be allocated to direct shareholder returns in the form of share repurchases.

The Company targets to manage the allocation of free cash flow on a forward-looking annual basis, while managing working capital and cash requirements as needed.

Free cash flow is calculated as adjusted funds flow less dividends on common shares, net capital expenditures and abandonment expenditures.

On March 4, 2026, the Board of Directors approved the renewal of the Company's Normal Course Issuer Bid ("NCIB"), which states that during the 12 month period commencing on March 13, 2026 and ending on March 12, 2027, the Company can repurchase for cancellation up to 10% of the public float (as determined in accordance with the rules of the TSX), subject to TSX approval.

UPDATED 2026 GUIDANCE

Canadian Natural is utilizing its capital flexibility in 2026 by reducing forecasted Operating Capital Expenditures by approximately $310 million, which reflects continuous improvement and efficiency gains on our development program and a deferral of front-end engineering and design ("FEED") capital on our Jackpine mine expansion opportunity at Albian.

As first communicated at the Company's 2025 investor day held on November 7, 2025, Canadian Natural continues to progress on its budgeted defined short-term growth strategy through the development of its Conventional E&P assets and thermal drill to fill pad additions, and its medium-term growth strategy by expending FEED capital on both its 70,000 bbl/d Pike 2 growth project and 30,000 bbl/d Jackfish expansion project.

As a part of its long-term growth strategy, the Company is deferring FEED and defined capital for our Oil Sands Jackpine mine expansion opportunity at Albian, that was originally included in our 2026 capital budget. This approximately $8.25 billion project is being deferred due to the lack of finalization of government regulatory policies as it relates to carbon pricing and methane, which creates uncertainty and economic burden for long-term growth investments. Once there is more certainty on these regulatory policies, approval timelines and egress, we will reassess the viability of this project.

Additionally, subsequent to year end, Canadian Natural has acquired assets in the Peace River area of Alberta, which are adjacent to existing operations in the area, and elsewhere for approximately $765 million.

As a result, forecasted annual capital is being updated as follows:

Capital Expenditures(1) ($ millions)

2026

Budget

2026 Updated

Forecast

Change

Conventional E&P$3,320

$3,160

$(160)

Thermal and Oil Sands Mining & Upgrading$2,980

$2,830

$(150)

Total Operating Capital Expenditures$6,300

$5,990

$(310)

Carbon Capture$125

$125

$-

Net acquisitions$-

$765

$765

Total Capital Expenditures$6,425

$6,880

$455

(1) Forward-looking 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, 2025 dated March 4, 2026 ("MD&A").

Note: 2026 capital expenditures excludes approximately $993 million of abandonment expenditures, before recoveries, related to the execution of the Company's abandonment and reclamation programs in North America and the North Sea.

Following the recent acquisition, Canadian Natural is increasing its 2026 production guidance range to 1,615 MBOE/d and 1,665 MBOE/d, with the mid-point being 20 MBOE/d higher than the budget.

Production Guidance(1) (before royalties)

2026

Budget

2026

Updated Forecast

Natural Gas (MMcf/d)

2,477 - 2,577

2,560 - 2,615

Conventional E&P Crude Oil & NGLs (Mbbl/d)

325 - 337

336 - 346

Thermal and Oil Sands Mining & Upgrading (Mbbl/d)

852 - 883

852 - 883

Total Liquids (Mbbl/d)

1,177 - 1,220

1,188 - 1,229

Total MBOE/d

1,590 - 1,650

1,615 - 1,665

(1) Reflects planned downtime for turnaround activities in all areas.

Note: Rounded to the nearest 1,000 bbl/d.

HIGHLIGHTS

Three Months Ended

Year Ended

($ millions, except per common share amounts)

Dec 31

2025

Sep 30

2025

Dec 31

2024

Dec 31

2025

Dec 31

2024

Net earnings $5,303

$600

$1,138

$10,820

$6,106

Per common share- basic $2.55

$0.29

$0.54

$5.17

$2.87

- diluted $2.54

$0.29

$0.54

$5.16

$2.85

Adjusted net earnings from operations (1) $1,711

$1,801

$1,977

$7,444

$7,414

Per common share- basic (2) $0.82

$0.86

$0.94

$3.56

$3.49

- diluted (2) $0.82

$0.86

$0.93

$3.55

$3.46

Cash flows from operating activities $3,768

$3,940

$3,432

$15,106

$13,386

Adjusted funds flow (1) $3,748

$3,920

$4,186

$15,460

$14,859

Per common share- basic (2) $1.80

$1.88

$1.99

$7.39

$6.99

- diluted (2) $1.79

$1.87

$1.97

$7.37

$6.94

Cash flows used in investing activities $1,200

$2,234

$10,414

$6,687

$14,095

Net capital expenditures (1) $1,237

$2,124

$10,348

$6,579

$14,431

Net capital expenditures (1), excluding net acquisitions (3) $1,413

$1,318

$1,290

$5,707

$5,286

Abandonment expenditures $201

$189

$151

$771

$646

Daily production, before royalties

Natural gas (MMcf/d)

2,660

2,668

2,283

2,547

2,147

Crude oil and NGLs (bbl/d)

1,215,364

1,175,604

1,090,002

1,146,175

1,005,603

Equivalent production (BOE/d) (4)

1,658,681

1,620,261

1,470,428

1,570,757

1,363,496

(1) Non-GAAP Financial Measure. Refer to the 'Non-GAAP and Other Financial Measures' section of the Company's MD&A.

(2) Non-GAAP Ratio. Refer to the 'Non-GAAP and Other Financial Measures' section of the Company's MD&A.

(3) Includes the impact of cash paid and received related to acquisitions and dispositions. The Company received net cash consideration of $212 million related to the AOSP asset swap in Q4/25. Refer to the 'Net Capital Expenditures' table in the Company's MD&A.

(4) 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.

Net earnings of approximately $10.8 billion in 2025 reflected strong operational performance, as well as the impact of non-cash accounting gains on the AOSP asset swap that closed in Q4/25, together with non-cash recoverability charges related to the North Sea and Offshore Africa. These items are discussed in detail in the Q4/25 Financial Statements and MD&A.

Adjusted net earnings from operations was strong at $7.4 billion in 2025.

RESERVES HIGHLIGHTS

A key differentiator for Canadian Natural is the strength, diversity and balance of its world class, top tier assets. The Company's total proved reserve life index ("RLI")(1) of 31 years is supported by long life low decline assets that have been strategically assembled and developed over several decades. The low maintenance capital requirements relative to the size and quality of the reserves affords the Company significant flexibility when balancing its four pillars of capital allocation to maximize shareholder value.

The Company's reserves were evaluated and reviewed by Independent Qualified Reserves Evaluators ("IQREs"). The following highlights are based on the Company's reserves using forecast prices and costs at December 31, 2025 (all reserves values are Company Gross unless stated otherwise).

Total proved reserves increased 4% to 15.910 billion BOE, with reserves additions and revisions of 1.253 billion BOE. Total proved plus probable reserves increased 3% to 20.750 billion BOE, with reserves additions and revisions of 1.213 billion BOE.

The strength and depth of the Company's assets are evident as approximately 73% of total proved reserves are long life low decline reserves. This results in a total proved BOE RLI of 31 years and a total proved plus probable BOE RLI of 40 years.

Additionally, high value, zero decline SCO and bitumen from the Horizon and Albian mines represent approximately 50% of total proved reserves with a RLI of 39 years.

Proved developed producing reserves additions and revisions for 2025 were 1.129 billion BOE, replacing 2025 production by 197‍%. The proved developed producing BOE RLI is 20 years.

Total proved reserves additions and revisions for 2025 replaced 2025 production by 218%. Total proved plus probable reserves additions and revisions for 2025 replaced 2025 production by 212%.

In 2025, Canadian Natural continued to achieve strong Finding, Development and Acquisition ("FD&A") costs:

FD&A costs, including changes in Future Development Cost ("FDC"), are $3.64/BOE for total proved reserves and $2.42/BOE for total proved plus probable reserves.

The net present value of future net revenues, before income tax, discounted at 10%, is $110.1 billion for proved developed producing reserves, $157.8 billion for total proved reserves, and $191.0 billion for total proved plus probable reserves.

(1) Supplementary financial measure. Refer to the '2025 Year End Reserves' section of this document.

OPERATIONS REVIEW

North America Oil Sands Mining and Upgrading

Three Months Ended

Year Ended

Dec 31

2025

Sep 30

2025

Dec 31

2024

Dec 31

2025

Dec 31

2024

Synthetic crude oil production (bbl/d) (1)(2)

619,901

581,136

534,631

565,102

472,245

(1) SCO production before royalties and excludes production volumes consumed internally as diesel.

(2) Consists of heavy and light synthetic crude oil products.

Oil Sands Mining and Upgrading achieved record annual production in 2025, averaging 565,102 bbl/d of SCO, an increase of 20% or approximately 93,000 bbl/d from 2024 levels, reflecting the additional working interests acquired in AOSP, combined with effective and efficient operations.

Oil Sands Mining and Upgrading achieved strong annual upgrader utilization, averaging 100% in 2025, which included a planned turnaround at AOSP.

Industry leading Oil Sands Mining and Upgrading operating costs averaged $22.66/bbl (US$16.21/bbl) of SCO in 2025, compared to $22.88/bbl (US$16.70/bbl) in 2024.

Oil Sands Mining and Upgrading production has strong realized pricing, averaging $86.41/bbl in 2025.