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August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL)

Canadian Natural Resources Limited (CNRL) · Aug 10, 2015 · 49 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
    CORPORATE PRESENTATION August 2015
  2. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2014 2015F Cash flow(1) (C$ million) $9,587 $5,800 - 6,200 Per share ? basic(1) (C$) $8.87 $5.30 - 5.70 Capital expenditures (C$ million) $11,744 $5,500 Dividend (C$/Share) $0.90 Common shares…
  3. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    2014 2015F Oil WTI (US$/bbl) $92.92 $51.49 Natural gas NYMEX (US$/MMbtu) $4.37 $2.84 Natural gas AECO (C$/GJ) $4.19 $2.71 Heavy oil diff (%) 21% 26% Exchange rate (C$ = XUS$) $0.91 $0.79 Company Gross Reserves of crude oil and…
  4. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 4
    CNQ PREMIUM VALUE. DEFINED GROWTH. INDEPENDENT. Slide 2 Canadian Natural 5 Key Messages Safe, effective, efficient & environmentally responsible operations Large, well balanced portfolio, transitioning to long life, low decline…
  5. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 5
    CNQ ? Capital allocation to maximize value ? Defined growth/value enhancement plans by product/basin ? Balance ?Product mix ?Project timelines ?Drill bit and acquisitions ?Strong balance sheet ? Opportunistic acquisitions ?…
  6. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 6
    CNQ 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 SIGNIFICANT VALUE TO UNLOCK Slide 4 1P Reserves After Royalties Note: Sourced from 2014 corporate reports. Peers include: APA, APC, EOG, CVE, CHK, DVN, ECA,…
  7. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    CNQ $0 $10 $20 $30 $40 $50 $60 TOP TIER F&D COSTS? Slide 5 F&D Costs Reserve Replacement ? 3 Year Average ($/BOE, net) Source: BMO Report, ?Oil & Gas: E&P? dated May 26, 2015. Peers include APA, APC, CHK, CVE, DVN, ECA, EOG,…
  8. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    CNQ ? Conventional assets deliver field operating cash flow ? Fund the transition to long life, low decline asset mix ? Pelican Lake crude oil ?Leading-edge polymer flood ?Top tier operating costs deliver field operating cash flow ?…
  9. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 9
    CNQ 0% 10% 20% 30% 40% 50% 60% 70% 2007 2011 2015F 2018F Horizon - Sold as Synthetic Crude Oil Thermal In Situ - Sold as Heavy Crude Oil Pelican Lake - Sold as Heavy Crude Oil LONG LIFE ASSETS = MORE SUSTAINABLE CASH FLOW Slide…
  10. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    CNQ 50 100 150 200 250 300 2015F 2017F 2018F HORIZON PRODUCTION DOUBLES BY 2018 Slide 8 Horizon Production Increases (MBOE/d) Note: Assumes current fiscal terms. Incremental 125,000 bbl/d Long life, no decline light oil…
  11. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 11
    CNQ ? Resource development ?Executing our defined plan ?Transitioning to a longer life low decline asset base ?Capital flexibility allows us to be nimble ? Dividend growth ?15 consecutive years of dividend increases ?Must be…
  12. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 12
    CNQ $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dividend Share Purchase Horizon Phase 1 build years RETURNS TO SHAREHOLDERS A PRIORITY Slide 10 Return…
  13. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    CNQ ? Committed to lowering cost structure ?Execution/productivity step changes ?Right scoping ?Leverage technology ?Regulatory effectiveness/efficiency ?Lower costs through the supply chain ? Committed to completing Horizon Phase…
  14. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    CNQ ? Low commodity price provides opportunity to focus on ?Right scoping ?Innovation; leveraging technology ?Execution/productivity enhancements ?Gaining regulatory effectiveness/efficiency ?Lower costs through the supply chain ?…
  15. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    CNQ ($ million) 2014 2015F Natural gas $767 $445 Crude oil Pelican Lake 246 150 Primary Heavy 1,253 455 Thermal In Situ 1,039 350 Light Canada 639 200 International 823 1,115 Total crude oil $4,767 $2,270 Horizon Sustaining…
  16. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    CNQ Targeted Production 2014 2015F % Change(1) Crude oil (Mbbl/d) North America Light Oil & NGLs 89 91 - 96 5% Pelican Lake 50 53 - 55 8% Primary Heavy 143 130 - 133 (8%) Thermal In Situ Oil Sands 108 126 - 140 23% International 30…
  17. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    CNQ BUILDING A WORLD CLASS COMPANY Slide 15 Balanced, Diverse Portfolio ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing free cash flow Heavy Crude Oil ~35% Light…
  18. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    CNQ ? Largest natural gas producer in Canada ? Q2/15 natural gas production of 1,716 MMcf/d ? Q2/15 average NGLs yield over 22 bbl/MMcf ? Large resource base ? 9.47 Tcfe reserves(1) ? Significant unconventional assets ? Montney…
  19. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    CNQ 2014 2015F % Change Production (MMcf/d)* 1,527 1,655 - 1,692 10% Drilling (net wells) 76 20 Capital ($ million) $767 $455 MOST EFFECTIVE AND EFFICIENT PRODUCER Slide 17 North America Natural Gas & NGLs 2015 Plan ? Capital…
  20. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    CNQ ? Q2/15 light crude oil and NGLs production ? ~89 Mbbl/d ? 2P reserves ? Light crude oil 203 million barrels* ? High quality light crude oil horizontal multi-frac opportunities ? Montney ? Dunvegan ? Halfway/Doig ? Charlie…
  21. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    CNQ ? 2015 activity ? Target multiple formations across basin ? Leverage infrastructure and ?Drill-to-Fill? ? Drive capital efficiencies ? Maximize value ? Opportunities to optimize facilities and operating costs ? Leverage…
  22. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    CNQ LONG LIFE RESERVES Slide 20 International Light Crude Oil Summary North Sea C?te d?Ivoire Gabon South Africa *Company gross proved plus probable reserves at December 31, 2014. ? Q2/15 light crude oil production ? ~37 Mbbl/d…
  23. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    CNQ 2014 2015F % Change Crude oil production (Mbbl/d) 30 41 - 47 47% Capital ($ million) $823 $1,115 Slide 21 International Light Crude Oil 2015 Plan Note: Rounded to the nearest 1,000 bbl/d. ? Offshore Africa ? Espoir 10 gross…
  24. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    CNQ ? Largest primary heavy oil producer in Canada ? Q2/15 production of ~129 Mbbl/d ? Delivering strong execution ? Extensive land base and infrastructure ? Over 8,000 potential drilling locations ? 5 major processing facilities…
  25. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    CNQ 2014 2015F %Change Production (Mbbl/d) 143 130 - 133 (8%) Drilling (net wells) 896 179 Recompletion (net wells) 637 567 Capital ($ million) $1,253 $455 STRONG CASH-ON-CASH RETURNS Slide 23 Primary Heavy Crude Oil 2015 Plan…
  26. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    CNQ ? Wabiskaw heavy crude oil pool ? Industry leading EOR project ? Amongst the largest polymer floods in the world ? Technology development continues to improve crude oil recovery ? Leading example of technology driving value…
  27. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    CNQ 2014 2015F %Change Production (bbl/d) 50 53 - 55 8% Drilling (net wells) ? Producers & Injectors 24 ? Capital ($ million) $246 $150 TECHNOLOGY ADVANCEMENT PROVIDES SIGNIFICANT UPSIDE Slide 25 Pelican Lake 2015 Plan Note:…
  28. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    CNQ VAST LAND BASE AND GREAT ASSETS = FLEXIBILITY Slide 26 Thermal In Situ Oil Sands Land Holdings Birch Mtn. Gregoire Leismer Ipiatik Grouse Pelican Lake Germain Primrose Wolf Lake Hilda Lake Marie Lake Saleski ?…
  29. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    CNQ MASSIVE RESOURCES TO EXPLOIT Slide 27 Thermal In Situ Oil Sands Tremendous Potential McMurray 50 billion barrels Wabiskaw 11 billion barrels Carbonates 10 billion barrels Clearwater 16 billion barrels Grand Rapids 16…
  30. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    CNQ Phase Reservoir Oil Facility Capacity Target (bbl/d) Primrose South/North CSS Clearwater 80,000 Primrose East CSS Clearwater 40,000 Kirby South SAGD McMurray 40,000 Kirby North Phase 1 SAGD McMurray 40,000 Grouse SAGD…
  31. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    CNQ 2014 2015F % Change Production (Mbbl/d) 108 126 - 140 23% Drilling (net wells) Primrose producers 11 ? Kirby producers 4 3 Strats 78 17 Service / observation wells 65 28 Total 158 48 Capital ($ million) $1,039 $350 CONTINUED…
  32. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    CNQ ? World Class asset ? 14.4 billion barrels BIIP(1) ? 2P SCO reserves ? 3.6 billion barrels(2) ? Best estimate contingent resources other than reserves ? 3.7 billion barrels of bitumen(3) ? Phased development (SCO) ? Current…
  33. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    CNQ FOCUS ON OPERATIONAL EXCELLENCE Slide 31 Horizon Oil Sands - Operations 2015 Plan 2014 2015F % Change Production (Mbbl/d) 111 121 - 131 14% Sustaining Capital ($ million) $352 $290 Turnarounds & Reclamation ($ million) $50 $40…
  34. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    CNQ 98 89 85 75 89 85 85 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 Q1 2015 CNQ Peer 1 Peer 2 CNQ Peer 1 Peer 2 BEST IN CLASS OPERATIONAL PERFORMANCE Slide 32 Horizon Oil Sands ?…
  35. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    CNQ Slide 33 Horizon Oil Sands - Expansion 2015 Plan ? Phase 2/3 Project Expansion FOCUS ON PROJECT EXECUTION 2014 2015F Project Capital ($ million) Reliability ? Tranche 2 $60 $0 Directive 74 and Technology 129 40 Phase 2A 95 35…
  36. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    CNQ FUTURE EXPANSION CREATES VALUE Slide 34 Horizon Oil Sands - Expansion Production Capacity Plan Note: Capacity additions ? 3-6 months required to ramp up to full rates. Project progress dependent upon economic and regulatory…
  37. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    CNQ $20.00 $22.00 $24.00 $26.00 $28.00 $30.00 $32.00 $34.00 50 100 150 200 250 300 2015F 2017F 2018F 2025F 2035F 2045F 2055F 2065F Target Production (LHS) Target Opex (RHS) HORIZON PRODUCTION DOUBLES BY 2018 Slide 35…
  38. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    CNQ IMPROVING ECONOMICS THROUGH EXPANSION Slide 36 Horizon Oil Sands ? Operations Targeted Operating Costs ($ million) ($/bbl) Targeted Operating Cost per Year Targeted Operating Cost per Barrel *Phase 1 & 2A reflect 2015F data.…
  39. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    CNQ ? Long term ratings ? S&P: BBB+ (Stable Outlook) ? Moody?s: Baa1 (Stable Outlook) ? DBRS: BBB High (Stable Trend) ? Short term ratings ? S&P: A-2 ? Moody?s: P-2 ? Strong financial position as of June 30, 2015 ? Debt/book…
  40. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    CNQ ? Monetization of royalty assets considerations ? Outright sale ? IPO ? Retention ? Provides additional balance sheet strength ? Capitalize on available cash flow multiple Slide 38 Royalty Revenue Stream MAXIMIZING VALUE FOR…
  41. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    CNQ 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% CNQ PXD DVN EOG APC CVE SU ECA APA ? Substantial management and director wealth at stake ? Strong motivation for management to perform ? Delivers clear alignment with shareholder…
  42. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    CNQ ? Strong balance sheet ? Large, diversified, well balanced asset base ? Transition to longer-life, low decline assets reduces capital requirements while maintaining production ? Delivering increasing and more sustainable cash…
  43. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    Advisory Cash Flow Pricing Assumptions 1. 2014 based upon actual; WTI of US$92.92/bbl, AECO of C$4.19/GJ, WCS differential of 21% and foreign exchange of US$1.00 to C$1.10. 2. 2015F based upon pricing assumptions at July 2015; WTI of…
  44. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    Bitumen (Thermal Oil Total) Discovered Bitumen Initially-in-place 96,627 million barrels Proved Company Gross Reserves 1,217 million barrels of Bitumen Probable Company Gross Reserves 1,095 million barrels of Bitumen Best Estimate…
  45. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    Hedging Note: The Company?s outstanding commodity derivative financial instruments are expected to be settled monthly based on the applicable index pricing for the respective contract month. As at August 6, 2015, the Company had the…
  46. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    Key Historic Data Operational Information 2009 2010 2011 2012 2013 2014 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 355 425 389 451 478 531 Natural gas (MMcf/d) 1,315 1,243 1,257 1,220 1,158 1,555 Barrels of oil…
  47. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 47
    Results of operations (C$ million, except per share) Cash flow from operations 6,090 6,333 6,547 6,013 7,477 9,587 per share ? Basic 5.62 5.82 5.98 5.48 6.87 8.78 Net earnings 1,580 1,673 2,643 1,892 2,270 3,929 per share ? Basic 1.46…
  48. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 48
    Corporate Guidance August 6, 2015 Q3/15 Guidance 2015 Updated Guidance Daily Production Volumes (before royalties) Natural gas (MMcf/d) 1,670 - 1,690 1,730 - 1,770 Crude oil and NGLs (Mbbl/d) North America 265 - 271 274 - 284…
  49. August 2015 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 49
    Note: Interest rates are subject to change depending upon short term rate changes. Cash income taxes are subject to variation with commodity prices and the level and classification of capital expenditures. Cash PRT is subject to…

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