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Canadian Natural posts first-quarter profit, evaluating acquisitions
May 4, 2017 / 9:19 AM / 4 months ago

Canadian Natural posts first-quarter profit, evaluating acquisitions

Facilities at Canadian Natural Resources Limited's (CNRL) Primrose Lake oil sands project is seen near Cold Lake, Alberta August 8, 2013. REUTERS/Dan Riedlhuber

CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd (CNQ.TO), the country’s largest independent petroleum producer, said on Thursday it continues to evaluate any assets for sale within its core areas of operation in western Canada.

However, the Calgary-based company added that it was focused on its recently announced acquisition of a majority stake in the Athabasca Oil Sands Project in northern Alberta, which is set to close in the second quarter of this year.

Canadian Natural will pay C$12.74 billion ($9.28 billion) for assets belonging to Royal Dutch Shell (RDSa.L) and Marathon Oil Corp (MRO.N), making it one of the three major Canadian oil sands operators, along with Suncor Energy (SU.TO) and Cenovus Energy (CVE.TO), that have been stepping in as foreign oil majors exit the region.

“We have got lots on our plate but that will not stop us from evaluating everything that goes through our core area,” president Steve Laut said on a first-quarter earnings call.

Canadian Natural, which operates in western Canada, the North Sea and offshore West Africa, reported a first-quarter profit on Thursday helped by an uptick in crude prices and increased output from its Horizon oil sands project in Alberta.

Oil prices CLc1 LCOc1 began to rise late last year after a two-year slump, and are now trading within a $45-$50 a barrel range as an OPEC-led production cut and rebounding demand slowly erode a global glut.

Canadian Natural posted a net profit of C$245 million, or 22 Canadian cents per share, for the quarter ended March 31, swinging to a profit after reporting a loss of C$105 million, or 10 Canadian cents per share, in the year-earlier quarter.

The company said production rose nearly 4 percent to 876,907 barrels of oil equivalent per day (boepd) in the latest quarter.

Cash flow from operations, a key indicator of a company’s ability to pay for new projects and drilling, surged nearly 150 percent to C$1.64 billion, or C$1.46 per share.

The free cash flow was largely used to reduce debt levels by C$500 million, the company said.

Production from Horizon, the company’s flagship oil sands facility, hit a record 192,000 bpd in the first quarter, up 50 percent year-on-year. Phase 3 of the project is scheduled to start up by the end of 2017, adding 80,000 bpd of capacity.

Reporting by John Benny in Bengaluru; Editing by Savio D'Souza and James Dalgleish

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