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Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL)

Canadian Natural Resources Limited (CNRL) · Mar 9, 2017 · 23 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. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 1
  2. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 2
    CNQ ? 70% operated working interest in the Athabasca Oil Sands Project (?AOSP?) Mines ?Ownership share equal to 196,000 bbl/d of mined bitumen capability ?Total Proved Producing Reserves of 2.6 billion barrels at AOSP (70%) ? 70%…
  3. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 3
    CNQ 10 Strengthens Key Balance Sheet Metrics (C$ billions, unless otherwise stated) 2016A 2017F 2017 Pro forma(1) 2018F 2018 Pro forma Production (boe/d)(2) 805,782 857,329 1,075,365 948,317 1,166,353 34% over 2016 25% over…
  4. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 4
    ? Increases robustness of Canadian Natural ?Production increase 25% over 2017F ?Reserves increase 50% over 2016 level ?Ratio of long life, low decline crude oil 2017F production increases from 60% to 70% ?Corporate 2018 decline rate…
  5. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 5
    ? Acquiring ?Shell?s 60% interest in the AOSP ?Half of Marathon?s 20% interest in AOSP ? Shell is acquiring the other half of Marathon?s interest ?Equates to 70% interest in the Albian mines and the Scotford Upgrader ? Remaining…
  6. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 6
    ? Total Consideration $12.74 billion ?C$4.0 billion in Canadian Natural stock to Vendor at market price ?C$8.24 billion cash at closing ?US$375 million Promissory Note payable in March 2018 ? Effective Date: February 1, 2017 ?…
  7. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 7
    ? Strong acquisition multiples ? 40% lower cost than Horizon with immediate cash flow Acquisition Metrics EBITDA Multiple 2017 strip 5.9 times 2017 $60.00 5.3 times FD&A cost $4.85/boe Cost per flowing barrel Transaction Horizon*…
  8. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 8
    Production levels maintained 7% 9% 11% 13% 15% 17% 19% 21% 23% 2009 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F Conventional Assets Conventional, Pelican & Thermal Conventional, Pelican, Thermal & Horizon Legacy…
  9. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 9
    Pro forma impact on Consolidated Reserves ? Proved Reserves increase by 44% ? Reserve life index increases from 22 years to 27 years CNRL 2016 Acquisition Pro forma RESERVES - PROVED Crude Oil (mmbbl) North America E&P 790 31…
  10. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 10
    0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 CNQ IMO SU CVE OXY DVN EOG APC APA CHK NBL ECA HSE CNQ CNQ Pro forma Peers 1P Reserves After Royalties Note: Sourced from 2015 corporate reports. Peers include: APA,…
  11. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 11
    0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Sinopec Suncor CNOOC CNQ Statoil ENI ConocoPhillips Gazprom Chevron Total Royal Dutch Shell Petrobras Lukoil BP Exxon Mobil PetroChina Rosneft CNQ Net Proved…
  12. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 12
    Pro forma Impact on Consolidated Production & Sales Mix ? Crude oil production increases ~38% ? boe/d production increases ~25% ? Crude oil sales weighting increases to 73% from 66% ? Acquired AOSP production sold as combination…
  13. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 13
    0% 10% 20% 30% 40% 50% 60% 70% 80% 2007 2011 2017F 2017F - Proforma Pelican Lake - Sold as Heavy Crude Oil Thermal In Situ - Sold as Heavy Crude Oil Horizon - Sold as Synthetic Crude Oil AOSP - Sold as Synthetic Crude Oil…
  14. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 14
    Driving Economies of Scale with Size Source: Canadian Natural pro forma using the mid-point of guidance, 2016 annual reports for peer comparisons. (bbl/d) 0 100,000 200,000 300,000 400,000 500,000 600,000 CNQ Q4/16 CNQ…
  15. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 15
    750 850 950 1,050 1,150 1,250 1,350 2016 2017F 2018F 2019F Pro forma CNQ Capital ($ Billion) CNQ Base $3.9 $3.8 $4.2 $4.5 Pro forma - $17.3 $4.7 $4.9 4 Year Production Growth (Mboe/d) *2016 midpoint to 2019F midpoint using…
  16. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 16
    CNQ ? AOSP Mines ? Operating mines across river from Horizon ? Jackpine current ~126,000 dry bitumen ? Muskeg River current ~154,000 dry bitumen ? Other leases nearby included in transaction ? Truck and shovel mine operations…
  17. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 17
    AOSP Material Product Movements Value Chain AOSP Mine 70% Canadian Natural JPM MRM 280 Mbbl/d Bitumen Nameplate Diluted Bitumen ~280 Mbbl/d + 85 Mbbl/d Diluent Custom Diluent ~85 Mbbl/d Common Owned Facilities Refinery &…
  18. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 18
    0 50,000 100,000 150,000 200,000 250,000 300,000 350,000 Jackpine bitumen Muskeg bitumen Scotford SCO AOSP Recent Performance Turn Around Upgrader nameplate capacity Source: AER filings and company reports. Wildfires Pitstop…
  19. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 19
    The Mines AOSP Mine Lease Map Jackpine Mine Expansion ? 2.9 Billion barrel Resource ? 70% TV:BIP10 or less ? Regulatory approval for 100 Mbbl/d ? Adjacent to Syncrude Aurora North, XOM Kearl, and Fort Hills Jackpine Mine ? 3.0…
  20. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 20
    Vast Resource Base of AOSP Area CNQ Horizon Oil Sands North Block Namur Horizon Ells River Muskeg River Mine Jackpine Mine Pierre River
  21. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 21
    ? Many of the assets can be leveraged for broader use in the region (e.g. aerodrome, mine facilities, warehousing, storage tanks) ? Assets have been built to last with pre-invested capacity ? e.g. heavy haul bridge built to access…
  22. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 22
    ? Capacity ? 42? dilbit pipeline: ~465,000 bbl/d ? Current excess capacity of ~100,000 bbl/d ? Possible expansion capacity up to ~1,100,000 bbl/d ? Incremental increases to pumping stations ? Firm Service Agreement ? 25 years…
  23. Athabasca Oil Sands Acquisition – Canadian Natural Resources Limited (CNRL) – slide 23
    Peace River ? Cliffdale ?~8,400 bbl/d (net) ?Primary heavy oil from the Bluesky/Gething ?Multi-leg horizontal wells from 34 pads ?Estimated producing reserves 31 MMbbl ?Infill and step-out drilling potential ? Carmon Creek ?…

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