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May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL)

Canadian Natural Resources Limited (CNRL) · May 15, 2015 · 46 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. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
    CORPORATE PRESENTATION May 2015
  2. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2014 2015F Cash flow(1) (C$ million) $9,587 $6,400 - 6,800 Per share ? basic(1) (C$) $8.87 $5.80 - 6.20 Capital expenditures (C$ million) $11,744 $5,745 Dividend (C$/Share) $0.90 Common shares…
  3. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    2014 2015F Oil WTI (US$/bbl) $92.92 $57.94 Natural gas NYMEX (US$/MMbtu) $4.37 $2.87 Natural gas AECO (C$/GJ) $4.19 $2.71 Heavy oil diff (%) 21% 22% Exchange rate (C$ = XUS$) $0.91 $0.82 Company Gross Reserves of crude oil and…
  4. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 4
    CNQ PREMIUM VALUE. DEFINED GROWTH. INDEPENDENT. Slide 2 Key Messages Safe, effective, environmentally responsible operations Proven effective strategy Large, well balanced assets, transitioning to long life, low decline assets…
  5. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 5
    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 March 31, 2015 ? Debt/book…
  6. May 2015 Investor 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. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    2P Reserves Before Royalties Based on forecast pricing assumptions. Note: Sourced from 2014 corporate reports. Peers include: CVE, ECA, HSE, IMO, SU, TLM. CNQ Peers (MMBOE)
  8. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    CNQ ? Transitioning to long life, low decline asset mix ? Conventional assets deliver field operating free cash flow ? Pelican Lake crude oil ?Leading-edge polymer flood ?Top tier operating costs deliver field operating free cash…
  9. May 2015 Investor 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 FREE CASH FLOW…
  10. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    CNQ US$90 WTI US$81 WTI US$70 WTI GROWING FREE CASH FLOW Slide 8 Targeted Total Corporate Free Cash Flow ($ Billion) Note: Dependent upon economic and regulatory conditions, commodity prices, global economic factors, project…
  11. May 2015 Investor 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. May 2015 Investor 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 to…
  13. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    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…
  14. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    production mbbl light oil and NGL pelican lake primary heavy thermal in situ oil sands internation horizon oil sands total crude oil natural gas mboe 2015 2014 % change mmcf/d
  15. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    CNQ BUILDING A WORLD CLASS COMPANY Slide 13 Balanced, Diverse Portfolio ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing free cash flow Heavy Crude Oil ~35% Light…
  16. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    CNQ ? Largest natural gas producer in Canada ? Q1/15 natural gas production of 1,713 MMcf/d ? Q1/15 average NGLs yield over 24 bbl/MMcf ? Large resource base ? 9.47 Tcfe reserves(1) ? Significant unconventional assets ? Montney…
  17. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    CNQ 2014 2015F % Change Production (MMcf/d)* 1,527 1,655 - 1,692 10% Drilling (net wells) 76 20 Capital ($ million) $767 $470 MOST EFFECTIVE AND EFFICIENT PRODUCER Slide 15 North America Natural Gas & NGLs 2015 Plan ? Capital…
  18. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    CNQ ? Q1/15 light crude oil and NGLs production ? Record quarterly ~98 Mbbl/d ? 2014 light crude oil activity ? 101 wells ? 2 Enhanced Oil Recovery (EOR) pilots at Nipisi and Grand Forks ? 2P reserves ? Light crude oil 203…
  19. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    CNQ ? 2015 activity ? Target multiple formations across basin ? Leverage infrastructure and ?Drill-to-Fill? ? Drive capital efficiencies ? Maximize value ? Opportunities to optimize facilities and operating costs ? Leverage…
  20. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    CNQ LONG LIFE RESERVES Slide 18 International Light Crude Oil North Sea C?te d?Ivoire Gabon South Africa *Company gross proved plus probable reserves at December 31, 2014. ? Q1/15 light crude oil production ? ~36 Mbbl/d ? 2P…
  21. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    CNQ Slide 19 International Light Crude Oil 2015 Plan Note: Rounded to the nearest 1,000 bbl/d. 2014 2015F % Change Crude oil production (Mbbl/d) 30 41 - 47 47% Capital ($ million) $823 $1,065 ? Offshore Africa ? Espoir 10 well…
  22. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    CNQ ? C?te d?Ivoire ?CI-514 ? CNQ 36% WI ? First exploratory well encountered 40 meter column of 34 degree API crude ? Second exploratory well drilled April 2015; results being evaluated ?CI-12 ? CNQ 60% WI ? 3D seismic acquired and…
  23. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    CNQ VAST LAND BASE AND INFRASTRUCTURE CAPTURES VALUE Slide 21 Primary Heavy Crude Oil Core Area Summary *Company Gross proved plus probable reserves as at December 31, 2014. ECHO Pipeline CNQ Producing Properties CNQ Lands ~212km…
  24. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    CNQ 2014 2015F %Change Production (Mbbl/d) 143 130 - 133 (8%) Drilling (net wells) 896 186 Recompletion (net wells) 637 568 Capital ($ million) $1,253 $480 STRONG CASH-ON-CASH RETURNS Slide 22 Primary Heavy Crude Oil 2015 Plan…
  25. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    CNQ MASSIVE RESOURCES TO EXPLOIT Slide 23 Pelican Lake Crude Oil How much of that crude oil is recoverable? OIIP(1) 4.1 billion barrels Developed Region 19% RF Produced to Date 215 MMbbl Resources(3) 153 MMbbl Probable…
  26. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    CNQ 2014 2015F %Change Production (bbl/d) 50 53 - 55 8% Drilling (net wells) ? Producers & Injectors 24 - Capital ($ million) $246 $170 TECHNOLOGY ADVANCEMENT PROVIDES SIGNIFICANT UPSIDE Slide 24 Pelican Lake 2015 Plan Note:…
  27. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    CNQ VAST LAND BASE AND GREAT ASSETS = FLEXIBILITY Slide 25 Thermal In Situ Oil Sands Land Holdings CNQ Lands Cenovus Conoco Devon Shell Suncor Syncrude All Others Birch Mtn. Gregoire Kirby Leismer Ipiatik Grouse Pelican…
  28. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    CNQ MASSIVE RESOURCE TO DEVELOP Slide 26 Thermal In Situ Oil Sands Tremendous Potential McMurray 49 billion barrels Wabiskaw 9 billion barrels Carbonates 10 billion barrels Clearwater 14 billion barrels Grand Rapids 15 billion…
  29. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    CNQ Phase Reservoir Oil Facility Capacity Target (bbl/d) Target Steam-In Timing* (year) Primrose South/North CSS Clearwater 80,000 On Stream Primrose East CSS Clearwater 40,000 On Stream Kirby South SAGD McMurray 40,000 On…
  30. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    CNQ 2014 2015F % Change Production (Mbbl/d) 108 126 - 140 23% Drilling (net wells) Primrose producers 11 ? Kirby producers 4 3 Strats 78 17 Service / observation wells 65 28 Total 158 48 Capital ($ million) $1,039 $385 CONTINUED…
  31. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    CNQ WORLD CLASS OPPORTUNITY Slide 29 Horizon Oil Sands - Operations Core Area Summary (1) Discovered Bitumen Initially in Place. (2) Company Gross proved plus probable reserves as at December 31, 2014. (3) Best estimate contingent…
  32. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    CNQ FOCUS ON OPERATIONAL EXCELLENCE Slide 30 Horizon Oil Sands - Operations 2015 Plan 2014 2015F % Change Production (Mbbl/d) 111 121 - 131 14% Sustaining Capital ($ million) $352 $275 Turnarounds & Reclamation ($ million) $50 $40…
  33. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    CNQ 98 89 85 75 89 85 85 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 Q1 2015 CNQ Peer 1 Peer 2 CNQ Peer 1 Peer 2 BEST IN CLASS OPERATIONAL PERFORMANCE Slide 31 Horizon Oil Sands -…
  34. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    CNQ Slide 32 Horizon Oil Sands - Expansion 2015 Plan ? Phase 2/3 Project Expansion FOCUS ON PROJECT EXECUTION 2014 2015F Project Capital ($ million) Reliability ? Tranche 2 $60 $0 Directive 74 and Technology 129 40 Phase 2A 95 35…
  35. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    CNQ FUTURE EXPANSION CREATES VALUE Slide 33 Horizon Oil Sands - Expansion Production Capacity Plan Actual/Forecast Capacity Target 12,000 bbl/d added 45,000 bbl/d added 80,000 bbl/d added Phase 2A Phase 2B Phase 3 Note:…
  36. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    Horizon Oil Sands ? Operations Targeted Operating Costs ($ million) ($/bbl) Targeted Operating Cost per Year Targeted Operating Cost per Barrel *Phase 1 & 2A reflect 2015F data. Note: Cost estimated with mine diesel and gas/energy as…
  37. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    CNQ US$90 WTI US$81 WTI US$70 WTI GROWING FREE CASH FLOW Slide 35 Targeted Total Corporate Free Cash Flow ($ Billion) Note: Dependent upon economic and regulatory conditions, commodity prices, global economic factors, project…
  38. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    CNQ ? Substantial management and director wealth at stake ? Strong motivation for management to perform ? Delivers clear alignment with shareholder interests CONSISTENT HISTORY OF VALUE CREATION Slide 36 Committed Management…
  39. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    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 free…
  40. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    Advisory Free 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$1.10. 2. 2015F based upon pricing assumptions at May 2015; WTI…
  41. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    Resource Disclosure(1) Horizon Oil Sands Synthetic Crude Oil Discovered Bitumen Initially-in-place 14,400 million barrels Proved Company Gross Reserves: 2,158 million barrels of SCO Bitumen volume associated with Proved SCO reserves…
  42. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    Hedging Note: The Company?s outstanding commodity derivative financial instruments are expected to be settled monthly based on the applicable index pricing for the respective contract month. As at May 7, 2015, the Company had the…
  43. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    Key Historic Data Operational Information 2009 2010 2011 2012 2013 2014 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 355 425 389 451 478 531 Natural gas (MMcf/d) 1,315 1,243 1,257 1,220 1,158 1,555 Barrels of oil…
  44. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    Results of operations (C$ 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…
  45. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    Corporate Guidance May 7, 2015 Q2/15 Guidance 2015 Updated Guidance Daily Production Volumes (before royalties) Natural gas (MMcf/d) 1,750 - 1,770 1,730 - 1,770 Crude oil and NGLs (Mbbl/d) North America 266 - 274 274 - 284 North…
  46. May 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    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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