Canadian Natural Resources Profits Outpace Rising Oil Demand, Raise Dividend

Pipelines from Canadian Natural Resources Limited’s (CNRL) Primrose Lake Oil Sands Project are seen near Cold Lake, Alta., August 8, 2013. REUTERS / Dan Riedlhuber

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Nov. 4 (Reuters) – Canadian Natural Resources Ltd (CNQ.TO), the country’s largest oil and gas producer, on Thursday reported third-quarter profit higher than analyst estimates, helped by a recovery in demand for oil and higher production.

Calgary-based Canadian Natural also said it would increase its quarterly dividend by 25%, echoing similar moves by rival oil sands majors Suncor Energy (SU.TO) and Cenovus Energy (CVE.TO) .

Global oil prices hit multi-year highs in 2021, but investors are rewarding companies that spend excess cash on dividends and buybacks, rather than output growth.

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“We don’t think there would be too many companies wanting to sanction anything significant (in the oil sands) today,” Canadian Natural chairman Tim McKay told Reuters. “We are looking at smaller expansions similar to what we have been able to do in the past.”

The company changed its capital allocation plan to allow for strategic acquisitions and growth spending once an absolute debt level of C $ 15 billion ($ 12.03 billion) is reached, but Analysts said Canadian Natural is unlikely to change its overall strategy of returning cash to shareholders.

“The revised capital allocation plan gives management additional flexibility to create long-term shareholder value, but we believe cash returns remain the target through 2022,” said George Huang, analyst at Raymond James, in a note to clients.

Canadian Natural said it remains on track to meet its 2021 capital investment target of approximately C $ 3.48 billion.

On an adjusted basis, the company generated C $ 2.1 billion from operations in the third quarter, or C $ 1.77 per share, compared to estimates of C $ 1.58, according to data provider Refinitiv IBES.

Canadian Natural, which produces in Canada, the North Sea and off the coast of Africa, produced 1.24 million barrels of oil equivalent per day (bpd) in the third quarter, up from 1.1 million bpd a year more early.

($ 1 = 1.2467 Canadian dollars)

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Report by Sahil Shaw in Bangalore; Editing by Subhranshu Sahu, Shounak Dasgupta and Marguerita Choy

Our standards: Thomson Reuters Trust Principles.


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Felix J. Dixon