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

Canadian Natural Resources Limited (CNRL) · Sep 1, 2015 · 52 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. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
    CORPORATE PRESENTATION September 2015
  2. September 2015 Investor 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) $0.90 Common shares…
  3. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    2014 2015F Oil WTI (US$/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. September 2015 Investor 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 Strong financial position Large, well balanced portfolio, transitioning to…
  5. September 2015 Investor 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. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 6
    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…
  7. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    CNQ 0 0.1 0.2 2010 2011 2012 2013 2014 Q1 2015 ? Safety is a core value ? Committed to continuous improvement ? No harm to people, no safety incidents ? Top tier recordable injury frequency in North America conventional…
  8. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    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…
  9. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 9
    CNQ ? Canadian Natural leading R&D investor ? Largest crude oil and natural gas R&D investor in Canada in 2013 ? 8th largest R&D investor for all industries in Canada in 2013 ? 2014 $450 million ? 2013 $390 million ? 2012 $300…
  10. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    CNQ ? Long term ratings ? S&P: BBB+ (Stable Outlook) ? Moody?s: Baa1 (Stable Outlook) ? DBRS: BBB High (Stable Trend) ? Short term ratings ? S&P: A-2 ? Moody?s: P-2 ? Strong financial position as of June 30, 2015 ? Debt/book…
  11. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 11
    CNQ (C$ million) Maturity Revolving bank line 1 $2,425 June 2020 Revolving bank line 2 $2,425 June 2019 Non-revolving bank line 3 $1,500 April 2018 Non-revolving term facility $1,000 January 2017 Operating demand loan $ 100 Demand…
  12. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 12
    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 10 1P Reserves After Royalties Note: Sourced from 2014 corporate reports. Peers include: APA, APC, EOG, CVE, CHK, DVN, ECA,…
  13. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    CNQ $0 $10 $20 $30 $40 $50 $60 TOP TIER F&D COSTS Slide 11 F&D Costs Reserve Replacement ? 3 Year Average ($/BOE, net) Source: BMO Report, ?Oil & Gas: E&P? dated May 26, 2015. Peers include APA, APC, CHK, CVE, DVN, ECA, EOG,…
  14. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    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 ?…
  15. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    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…
  16. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    CNQ $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Dividend Share Purchase Horizon Phase 1 build years RETURNS TO SHAREHOLDERS A PRIORITY Slide 14 Return…
  17. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    CNQ ? Committed to lowering cost structure ?Execution/productivity step changes ?Right scoping ?Leverage technology ?Regulatory effectiveness/efficiency ?Lower costs through the supply chain ? Committed to completing Horizon Phase…
  18. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    CNQ ? Low commodity price provides opportunity to focus on ?Right scoping ?Innovation; leveraging technology ?Execution/productivity enhancements ?Gaining regulatory effectiveness/efficiency ?Lower costs through the supply chain ?…
  19. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    CNQ ($ 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 $4,000 $2,270 Horizon Sustaining…
  20. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    CNQ Targeted Production 2014 2015F % Change(1) Crude oil (Mbbl/d) North America Light Oil & NGLs 89 91 - 96 5% Pelican Lake 50 53 - 55 8% Primary Heavy 143 130 - 133 (8%) Thermal In Situ Oil Sands 108 126 - 140 23% International 30…
  21. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    CNQ BUILDING A WORLD CLASS COMPANY Slide 19 Balanced, Diverse Portfolio ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing free cash flow Heavy Crude Oil ~35% Light Crude Oil…
  22. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    CNQ ? Largest natural gas producer in Canada ? Q2/15 natural gas production of 1,716 MMcf/d ? Q2/15 average NGLs yield over 22 bbl/MMcf ? Large resource base ? 9.47 Tcfe reserves(1) ? Significant unconventional assets ? Montney…
  23. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    CNQ 2014 2015F % Change Production (MMcf/d)* 1,527 1,655 - 1,692 10% Drilling (net wells) 76 20 Capital ($ million) $767 $445 MOST EFFECTIVE AND EFFICIENT PRODUCER Slide 21 North America Natural Gas & NGLs 2015 Plan ? Capital…
  24. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    CNQ ? Q2/15 light crude oil and NGLs production ? ~89 Mbbl/d ? 2P reserves ? Light crude oil 203 million barrels* ? High quality light crude oil horizontal multi-frac opportunities ? Montney ? Dunvegan ? Halfway/Doig ? Charlie…
  25. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    CNQ ? 2015 activity ? Target multiple formations across basin ? Leverage infrastructure and ?Drill-to-Fill? ? Drive capital efficiencies ? Maximize value ? Opportunities to optimize facilities and operating costs ? Leverage…
  26. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    CNQ LONG LIFE RESERVES Slide 24 International Light Crude Oil Summary North Sea C?te d?Ivoire Gabon South Africa *Company gross proved plus probable reserves at December 31, 2014. ? Q2/15 light crude oil production ? ~37 Mbbl/d…
  27. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    CNQ 2014 2015F % Change Crude oil production (Mbbl/d) 30 41 - 47 47% Capital ($ million) $823 $1,115 Slide 25 International Light Crude Oil 2015 Plan Note: Rounded to the nearest 1,000 bbl/d. ? Offshore Africa ? Espoir 10 gross…
  28. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    CNQ ? Largest primary heavy oil producer in Canada ? Q2/15 production of ~129 Mbbl/d ? Delivering strong execution ? Extensive land base and infrastructure ? Over 8,000 potential drilling locations ? 5 major processing facilities…
  29. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    CNQ 2014 2015F %Change Production (Mbbl/d) 143 130 - 133 (8%) Drilling (net wells) 896 179 Recompletion (net wells) 637 567 Capital ($ million) $1,253 $455 STRONG CASH-ON-CASH RETURNS Slide 27 Primary Heavy Crude Oil 2015 Plan…
  30. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    CNQ ? Wabiskaw heavy crude oil pool ? Industry leading EOR project ? Amongst the largest polymer floods in the world ? Technology development continues to improve crude oil recovery ? Leading example of technology driving value…
  31. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    CNQ 2014 2015F %Change Production (bbl/d) 50 53 - 55 8% Drilling (net wells) ? Producers & Injectors 24 ? Capital ($ million) $246 $150 TECHNOLOGY ADVANCEMENT PROVIDES SIGNIFICANT UPSIDE Slide 29 Pelican Lake 2015 Plan Note:…
  32. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    CNQ VAST LAND BASE AND GREAT ASSETS = FLEXIBILITY Slide 30 Thermal In Situ Oil Sands Land Holdings Birch Mtn. Gregoire Leismer Ipiatik Grouse Pelican Lake Germain Primrose Wolf Lake Hilda Lake Marie Lake Saleski ?…
  33. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    CNQ MASSIVE RESOURCES TO EXPLOIT Slide 31 Thermal In Situ Oil Sands Tremendous Potential McMurray 50 billion barrels Wabiskaw 11 billion barrels Carbonates 10 billion barrels Clearwater 16 billion barrels Grand Rapids 16…
  34. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    CNQ Phase Reservoir Oil Facility Capacity Target (bbl/d) Primrose South/North CSS Clearwater 80,000 Primrose East CSS Clearwater 40,000 Kirby South SAGD McMurray 40,000 Kirby North Phase 1 SAGD McMurray 40,000 Grouse SAGD…
  35. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    CNQ 2014 2015F % Change Production (Mbbl/d) 108 126 - 140 23% Drilling (net wells) Primrose producers 11 ? Kirby producers 4 3 Strats 78 17 Service / observation wells 65 28 Total 158 48 Capital ($ million) $1,039 $350 CONTINUED…
  36. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    CNQ ? Debottlenecking pipeline capacity to USGC adds substantial incremental markets ? Flanagan south start-up in early 2015 adds approximately 600,000 bbl/d of incremental USGC pipeline capacity ? Clipper Expansion in Q3/15…
  37. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    CNQ 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Western Canadian Refineries TMPL ENB- Ex Superior W. Access to PADD IV Clearbrook/Superior Keystone Base (in service)…
  38. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    CNQ ? World Class asset ? 14.4 billion barrels BIIP(1) ? 2P SCO reserves ? 3.6 billion barrels(2) ? Best estimate contingent resources other than reserves ? 3.7 billion barrels of bitumen(3) ? Phased development (SCO) ? Current…
  39. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    CNQ FOCUS ON OPERATIONAL EXCELLENCE Slide 37 Horizon Oil Sands - Operations 2015 Plan 2014 2015F % Change Production (Mbbl/d) 111 121 - 131 14% Sustaining Capital ($ million) $352 $290 Turnarounds & Reclamation ($ million) $50 $40…
  40. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    CNQ 98 89 85 75 89 85 85 60 62 64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 100 Q1 2015 CNQ Peer 1 Peer 2 CNQ Peer 1 Peer 2 BEST IN CLASS OPERATIONAL PERFORMANCE Slide 38 Horizon Oil Sands ?…
  41. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    CNQ Slide 39 Horizon Oil Sands - Expansion 2015 Plan ? Phase 2/3 Project Expansion FOCUS ON PROJECT EXECUTION 2014 2015F Project Capital ($ million) Reliability ? Tranche 2 $60 $0 Directive 74 and Technology 129 40 Phase 2A 95 35…
  42. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    CNQ FUTURE EXPANSION CREATES VALUE Slide 40 Horizon Oil Sands - Expansion Production Capacity Plan Note: Capacity additions ? 3-6 months required to ramp up to full rates. Project progress dependent upon economic and regulatory…
  43. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    CNQ IMPROVING ECONOMICS THROUGH EXPANSION Slide 41 Horizon Oil Sands ? Operations Targeted Operating Costs ($ million) ($/bbl) Targeted Operating Cost per Year Targeted Operating Cost per Barrel *Phase 1 & 2A reflect 2015F data.…
  44. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    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 42…
  45. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    CNQ ? Monetization of royalty assets considerations ? Outright sale ? IPO ? Retention ? Provides additional balance sheet strength ? Capitalize on available cash flow multiple Slide 43 Royalty Revenue Stream MAXIMIZING VALUE FOR…
  46. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    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…
  47. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 47
    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…
  48. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 48
    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…
  49. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 49
    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…
  50. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 50
    Capital expenditures (net, including combinations) 2,997 5,514 6,414 6,308 7,274 11,744 Balance Sheet Info (C$ million) Property, plant and equipment (net) 39,115 38,429 41,631 44,028 46,487 52,480 Total assets 41,024 42,954 47,278…
  51. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 51
    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…
  52. September 2015 Investor Presentation – Canadian Natural Resources Limited (CNRL) – slide 52
    Horizon Oil Sands Project Project capital Directive 74 40 Phase 2A 35 Phase 2B 1,230 Phase 3 560 Owner?s costs and other 285 Total capital projects 2,150 Technology and Phase 4 5 Sustaining capital 290 Turnarounds and…

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