Economics : Rates of Return/ IRR
Showing 3 Results
Anchor position in two high quality plays
Consolidates ownership of top-tier oil sands
ConocoPhillips
projects (Horn River)
no incremental staff or integration required
low-risk growth profile with emerging technology
upside Pelican Lake
(21,000 bbls/d)
Deep Basin assets high-grade portfolio
high quality position in the prolific Deep Basin of
Oil sands
Alberta and British Columbia (356,000 bbls/d)
Acquiring ConocoPhillips
3.0 million net acres with significant owned and 50% interest
majority operated infrastructure
Deep Basin
(120,000 BOE/d)
deep inventory of short-cycle and high IRR potential Palliser
(53,000 BOE/d)
drilling opportunities
Suffield
provides significant capital flexibility (24,000 BOE/d)
Weyburn
(14,000 BOE/d)
March 29, 2017 9
Cenovus Energy Inc.
March 2017
-127-03_09_2017-March_2017_Investor_Presentation/Canadian_Natural_Resources_Limited_(CNRL)-127-03_09_2017-March_2017_Investor_Presentation_PAGE-022.PNG)
CNQ
$0.00
$10.00
$20.00
$30.00
$40.00
$50.00
$60.00
$70.00
LONG-LIFE, LOW DECLINE ASSETS GROWTH POTENTIAL 33
Thermal In Situ Oil Sands Projects
Return on Capital, 15% After Tax
WTI
(US$/bbl)
Primrose Pads
Kirby North
Wolf Lake Sparky
Primrose Expansion
Kirby South Pads - Tier 2
Grouse
Future Greenfield SAGD Projects
Production Capability (bbl/d)
Kirby South Pads - Tier 1
Small Scale SAGD Projects
0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 400,000 450,000
Note: Assumes AECO= $2.50 C$/GJ for natural gas, an exchange rate of US$1.00 to C$1.30 and a WCS differential range of 22%-27%.
See Advisory for cautionary statements.
Canadian Natural Resources (CNRL)
March 2017
31
CONTINGENT BITUMEN ROYALTY
SLIDING SCALE PRICING
HIGHLIGHTS 14%
Birch, Dover & Grosmont
12% Hangingstone
o Royalty only applies to the Hangingstone, Dover West,
Birch and Grosmont leases 10%
Royalty Rate (%)
o Leismer and Corner leases are unencumbered 8%
6%
o Total cash proceeds of 307MM
4%
2%
ROYALTY OVERVIEW
0%
o Linear royalty scale between 0 12% 0 25 50 75 100 125 150 175 200
USWCS
Minimum WTI of US75/bbl before royalty triggered HS PROJECT 1 NETBACK EXAMPLE
US WC S 45 60 85
o US Western Canadian Select benchmark US WT I * 60 75 100
o Applied to the realized bitumen price C /bbl /bbl /bbl
D ilbit S ales 70 95 136
D iluent C os t -28 -34 -45
FUTURE EXPANSION PHASES & PROJECTS T rans portation
R ealiz ed B itumen P ric ing
-9
33
-9
51
-9
82
C rown R oyalties -1 -3 -8
o Limited impact on future project returns R oyalty 0 -1 -4
O perating C os ts -19 -19 -19
o No commitments to future development phases O perating Netbac k 13 28 51
o Higher pricing threshold on greenfield assets Annual R oyalty % 0.0% 2.0% 5.1%
Annual R oyalty P ayment 0 4 18
Annual O perating Inc ome 53 119 217
* Implied WTI bas ed on a 0.8 US /C FX as s umption and a US 15/bbl heavy differential
Athabasca Oil Corp
January 2017