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

Canadian Natural Resources Limited (CNRL) · Feb 20, 2015 · 62 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. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
    CORPORATE PRESENTATION February 2015
  2. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2014F 2015F Capital expenditures (C$ million) $11,955 $6,190 Dividend (C$/Share) $0.88 Production (annual average, before royalties) Oil (Mbbl/d) 531 - 557 552 - 592 Natural gas (MMcf/d) 1,550 -…
  3. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    CNQ Five Key Messages Strong financial position Large, balanced, high quality asset base Transitioning to long life, low decline assets Increasing sustainable free cash flow through organic profitable growth Unlocking significant…
  4. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 4
    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 liquidity with $5.8 billion in credit lines ?$2.4 billion…
  5. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 5
    CNQ 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 CNQ SU OXY IMP DVN APC CHK APA EOG CVE ECA NBL HSE TLM 1P Reserves After Royalties SIGNIFICANT VALUE TO UNLOCK Slide 4 Note: Sourced from 2013 corporate reports.…
  6. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 6
    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…
  7. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    CNQ Transitioning to a Longer Life Asset Base LONG LIFE ASSETS = MORE SUSTAINABLE FREE CASH FLOW Slide 6 *2015F - 2018F based on company internal forecast as at November 2014. Dependent upon economic and regulatory conditions,…
  8. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    CNQ -$3 -$2 -$1 $0 $1 $2 $3 $4 $5 $6 $7 $8 2013 2014F 2015F 2016F 2017F 2018F 2019F 2020F Targeted Total Corporate Free Cash Flow GROWING FREE CASH FLOW ($ Billion) Note: Dependent upon economic and regulatory conditions,…
  9. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 9
    CNQ ? Resource development ?Executing our defined plan ?Transitioning to a longer life low decline asset base ?Capital flexibility allows us to be nimble ? Dividends ?14 consecutive years of dividend increases ? 34% CAGR (2009 -…
  10. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    CNQ $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014F Dividend Share Purchase Horizon build years Return to Shareholders RETURNS TO SHAREHOLDERS A PRIORITY…
  11. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 11
    CNQ Canadian Natural 2015 Capital Budget Slide 10 ($ million) 2014F 2015B 2015 Revised Natural gas $785 $920 $490 Crude oil Pelican Lake 250 240 175 Primary Heavy 1,250 1,130 545 Thermal In Situ 1,080 1,135 460 Light Canada…
  12. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 12
    Canadian Natural 2015 Production Budget STRATEGIC, DEFINED GROWTH PLAN Slide 11 Targeted Production 2014F 2015B % Change 2015 Revised % Change(1) Crude oil (Mbbl/d) North America Light Oil & NGLs 89 - 90 96 - 100 9% 91 - 96 4%…
  13. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    CNQ Balanced, Diverse Portfolio BUILDING A WORLD CLASS COMPANY Slide 12 ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing free cash flow Heavy Crude Oil ~35% Light…
  14. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    CNQ AB SK MB CNQ Total Land Base West 1,273 MMcf/d East 371 MMcf/d BC North America Natural Gas & NGLs Core Area Summary ? Largest natural gas producer in Canada ? Q3/14 natural gas production of 1,644 MMcf/d ? Q3/14…
  15. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    CNQ 2014F 2015F % Change Production (MMcf/d)* 1,530 - 1,535 1,660 - 1,695 9% Drilling (net wells) 77 21 Capital ($ million) $785 $490 ? Capital discipline ? Preserve land base for increasing natural gas prices ? 2015 operating cost…
  16. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    North America Light Crude Oil 2014 Facts ? Q3/14 light crude oil and NGLs production ? ~94 Mbbl/d ? 2014 light crude oil activity ? 99 wells ? 2 Enhanced Oil Recovery (EOR) pilots at Nipisi and Grand Forks ? 2P reserves ? Light…
  17. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    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…
  18. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    CNQ International Light Crude Oil ? Q3/14 light crude oil production ? ~32 Mbbl/d ? 2P light crude oil reserves ? 478 million barrels* ? Long reserve life ? Low decline water floods ? Exploitation based ? Exploration upside LONG…
  19. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    CNQ ? North Sea ?4 Brownfield Allowances (BFAs) approved to date ?Ninian development plan commenced in Q4/13 ? 6 well program ? Offshore Africa ?Espoir 10 well infill drilling program ? Commenced late Q4/14 ?Baobab 6 well drilling…
  20. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    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 targeted up-dip for first half of 2015 ?CI-12 ? CNQ 60% WI ? 3D seismic acquired and…
  21. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    CNQ Primary Heavy Crude Oil Core Area Summary ? Largest primary heavy oil producer in Canada ? Record Q3/14 production of ~143,400 bbl/d ? Delivering strong execution ? Extensive land base and infrastructure ? Over 8,000…
  22. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    CNQ 2014F 2015F %Change Production (Mbbl/d) 142 - 146 130 - 133 (9%) Drilling (net wells) 894 170 Recompletion (net wells) 620 568 Capital ($ million) $1,250 $545 Primary Heavy Crude Oil 2015 Plan STRONG CASH-ON-CASH RETURNS Slide…
  23. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    CNQ Pelican Lake Crude Oil ? Wabiskaw heavy crude oil pool ? Industry leading EOR project ? Amongst the largest polymer floods in the world ? Technology development continues to improve crude oil recovery ? Leading example of…
  24. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    CNQ 2014F 2015F %Change Production (bbl/d) 49 - 51 53 - 55 8% Drilling (net wells) ? Producers & Injectors 24 2 Capital ($ million) $250 $175 Pelican Lake 2015 Plan TECHNOLOGY ADVANCEMENT PROVIDES SIGNIFICANT UPSIDE Slide 23 See…
  25. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    CNQ Thermal In Situ Oil Sands Land Holdings VAST LAND BASE AND GREAT ASSETS = FLEXIBILITY CNQ Lands Cenovus Conoco Devon Shell Suncor Syncrude All Others Birch Mtn. Gregoire Kirby Leismer Ipiatik Grouse Pelican Lake…
  26. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    Thermal In Situ Oil Sands Tremendous Potential MASSIVE RESOURCE TO DEVELOP Slide 25 McMurray 49 billion barrels Wabiskaw 9 billion barrels Carbonates 10 billion barrels Clearwater 14 billion barrels Grand Rapids 15 billion…
  27. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    CNQ Thermal In Situ Oil Sands Growth Plan CAPTURING VALUE BY DOING IT RIGHT Slide 26 ? 522,000 bbl/d of oil facility capacity in the defined growth plan ? 40,000 - 60,000 bbl/d addition every 2-3 years ? 100% working interest and…
  28. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    CNQ Thermal In Situ Oil Sands 2015 Plan 2014F 2015F % Change Production (Mbbl/d) 112 - 122 126 - 140 14% Drilling (net wells) Primrose producers 11 ? Kirby producers 4 3 Strats 88 27 Service / observation wells 62 22 Total 165…
  29. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    Horizon Oil Sands - Operations Core Area Summary ? World Class asset ? 14.4 billion barrels BIIP(1) ? 2P SCO reserves ? 3.3 billion barrels(2) ? Best estimate contingent resources other than reserves ? 4.1 billion barrels of…
  30. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    CNQ ? Enhanced reliability ? Continued focus on safe, steady and reliable operations ? Plant utilization of 95% post turnaround 2013 ? Greater focus on operating cost efficiencies ? 2015 Guidance: $34.00 - $37.00/bbl, $31.00 -…
  31. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    Horizon Oil Sands - Operations Industry Leading Utilization BEST IN CLASS OPERATIONAL PERFORMANCE Slide 30 Q1/14 Note For Q1/14 to Q3/14, CNQ internal. Peers include: Suncor, Syncrude. Source: For 2013 and best annual performance of…
  32. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    CNQ Horizon Oil Sands - Expansion 2015 Plan ? Phase 2/3 Project Expansion FOCUS ON PROJECT EXECUTION Slide 31 2014F 2015F Project Capital ($ million) Reliability ? Tranche 2 $60 $0 Directive 74 and Technology 125 55 Phase 2A 100…
  33. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    Horizon Oil Sands - Expansion Production Capacity Plan FUTURE EXPANSION CREATES VALUE Slide 32 Actual/Forecast Capacity Target 12,000 bbl/d added 45,000 bbl/d added 80,000 bbl/d added Phase 2A Phase 2B Phase 3 Note: Capacity…
  34. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    Horizon Oil Sands ? Operations Targeted Operating Costs IMPROVING ECONOMICS THROUGH EXPANSION Slide 33 ($ million) ($/bbl) Targeted Operating Cost per Year Targeted Operating Cost per Barrel Note: Cost estimated with mine diesel and…
  35. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    CNQ -$3 -$2 -$1 $0 $1 $2 $3 $4 $5 $6 $7 $8 2013 2014F 2015F 2016F 2017F 2018F 2019F 2020F Targeted Total Corporate Free Cash Flow GROWING FREE CASH FLOW ($ Billion) Note: Dependent upon economic and regulatory conditions,…
  36. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    CNQ 0 200 400 600 800 1,000 CNQ EOG PXD DVN APA APC SU CVE Committed Management ? Substantial management and director wealth at stake ? Strong motivation for management to perform ? Delivers clear alignment with shareholder…
  37. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    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…
  38. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    ? Quarterly production ? 797,000 BOE/d ? 13% YOY growth ? 518,000 bbl/d crude oil & NGLs ? 2% YOY growth ? 2014F targeted annual growth of 12% ? 1,674 MMcf/d natural gas ? 44% YOY growth ? Record Pelican Lake heavy crude oil…
  39. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    North America Natural Gas & NGLs Our Montney Position Project Gas Sales Capacity (MMcf/d) Liquids Sales Capacity (bbl/d) Gas Price Required (AECO) Septimus Phase 1 57 5,555 On stream Septimus Phase 2 68 6,645 On stream…
  40. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    North America Natural Gas & NGLs Duvernay Lands and Plans LEVERAGE LAND, INFRASTRUCTURE AND TECHNOLOGY Slide 41 Kaybob Wild River Pembina AB Volatile Crude Oil Wet Gas (10-80 bbl/MMcf) Lean Gas…
  41. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    CNQ International Light Crude Oil Cote d?Ivoire - Exploration EXPLORATION OPPORTUNITIES FOR VALUE CREATION Slide 42 12.5km CI-12 CI-515 CI-516 CI-115 CI-116 CI-514 Saphir-1X Espoir/Baobab Paon Oil Discovery 2012 CI-12 (CNQ…
  42. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    Pelican Lake Polymerflood INDUSTRY LEADING EOR TECHNOLOGY Slide 43 $/bbl New wells / well conversions $1.75-$2.50 Facilities and pipelines $2.75-$3.50 Polymer $4.00-$6.00 Maintenance and other $4.50-$5.00 Total $13.00-$17.00…
  43. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    Pelican Lake Production by Recovery Method THREE PRODUCING REGIMES ? THREE DIFFERENT PROFILES Slide 44 Primary Water flood/Polymer flood (bbl/d)
  44. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    Delivering Safety Excellence SAFETY IS A CORE VALUE Slide 45 0 0.1 0.2 2009 2010 2011 2012 2013 Lost time incident rate (incident per 200K hours) ? Safety is a core value ? Committed to continuous improvement ? No harm to…
  45. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    CNQ ? Proactive environmentally responsible operations ? Drive continuous improvement to reduce environmental impacts ? Meet or exceed all regulatory requirements ? Reducing greenhouse gas intensity ? Restoring sites to natural…
  46. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    CNQ $0 $50 $100 $150 $200 $250 $300 $350 $400 2008 2009 2010 2011 2012 2013 Leveraging Technology for Value & Performance TECHNOLOGY UNLOCKS VALUE ($ million) Note: Sourced from Company internal reports and RE$EARCH…
  47. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 47
    CNQ ? Incremental PADD 2 conversion capacity ? BP Whiting refinery capacity increase of 260,000 bbl/d ? Significant additional rail loading capacity in WCSB ? 1.4 Mmbbl/d of loading capacity by Q4/15 ? Approximately 200 ? 300 Mbbl/d…
  48. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 48
    Marketing Pipeline Capacity to Markets RAIL INFRASTRUCTURE WILL BE USED AS REQUIRED TO MEET PIPELINE SHORTFALLS Slide 49 (MMbbl/d) Western Canadian Refineries TMPL ENB- Ex Superior W. Access to PADD IV Clearbrook/Superior…
  49. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 49
    CNQ Superior Fort McMurray Kitimat Edmonton Steele City Sarnia Montreal Portland St. John Enbridge Gateway 525 Mbbl/d Crude Export Line (2018+) TMX Expansion 890 Mbbl/d (2018+) Seaway Pipeline Twin 850 Mbbl/d Vancouver…
  50. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 50
    CNQ ? Project sanctioned November 2012 ? 50,000 bbl/d additional bitumen conversion capacity ?Canadian Natural ? 50% ownership ? Return on capital generated by tolls ?30 year tolling agreement ?Tolls determined by project capital,…
  51. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 51
    CNQ Horizon Oil Sands - Expansion Expansion Progressing PHASE 2-3 PROGRESS Slide 52 2014 2011
  52. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 52
    Horizon Oil Sands Expansion By Phase Slide 53 Ore Preparation Plant Extraction Froth Treatment Plant Distillate Recovery Vacuum Distillate Unit Coker Drums Hydrotreaters ** # of Units Capacity (bbl/d) Phase 1 110,000…
  53. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 53
    Bank Credit Facilities (C$ million) Maturity Revolving bank line 1 $3,000 June 2017 Revolving bank line 2 $1,500 June 2016 Non-Revolving term facility $1,000 April 2016 Operating demand loan $ 275 Demand North Sea operating line…
  54. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 54
    CNQ 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 2014 2017 2020 2023 2026 2029 2032 2035 2038 C$ Public US$ Public (converted to C$ Equivalent) Maturity Schedule Public Debt BALANCED MATURITY PROFILE Slide 55 (C$ billion) Note:…
  55. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 55
    Advisory Free Cash Flow Pricing Assumptions 1. 2014F based upon pricing assumptions at October 2014; WTI of US$95.34/bbl, AECO of C$4.19/GJ, WCS differential of 20% and foreign exchange of US$1.00 to C$1.10. 2. 2015F based upon…
  56. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 56
    Natural Gas - Montney Discovered Natural Gas Initially-In-Place 67,746 billion cubic fee Proved Company Gross Reserves 738 billion cubic fee 50 million barrels o Probable Company Gross Reserves 547 billion cubic fee 43 million…
  57. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 57
    Remaining term Volume Weighted average price Index Crude oil Price collars Oct 2014 ? Dec 2014 50,000 bbl/d US$75.00 ? US$121.57 Brent Oct 2014 ? Dec 2014 50,000 bbl/d US$80.00 ? US$120.17 Brent Oct 2014 ? Dec 2014 50,000 bbl/d…
  58. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 58
    Note: The Company?s outstanding commodity derivative financial instruments are expected to be settled monthly based on the applicable index pricing for the respective contract month. Remaining term Volume Weighted average price Index…
  59. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 59
    Key Historic Data Operational Information 2008 2009 2010 2011 2012 2013 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 316 355 425 389 451 478 Natural gas (MMcf/d) 1,495 1,315 1,243 1,257 1,220 1,158 Barrels of oil…
  60. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 60
    Realized product pricing, before hedging activities & after transportation costs Crude oil and NGLs (C$/bbl) 82.41 57.68 65.81 77.46 70.24 71.59 Natural gas (C$/Mcf) 8.39 4.53 4.08 3.73 2.44 3.30 Results of operations (C$ million,…
  61. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 61
    Corporate Guidance January 12, 2015 2015 Original Budget 2015 Revised Budget Daily Production Volumes (before royalties) Natural gas (MMcf/d) 1,790 - 1,830 1,730 - 1,770 Crude oil and NGLs (Mbbl/d) North America 292 - 302 274 -…
  62. February 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 62
    Note: Interest rates are subject to change depending upon short term rate changes. Current income taxes are subject to variation with commodity prices and the level an classification of capital expenditures. Current PRT is subject to…

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