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August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL)

Canadian Natural Resources Limited (CNRL) · Aug 14, 2017 · 54 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 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 1
  2. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2016 2017F Funds Flow (C$ million) (1) $4,293 $6,500 - $6,900 Per share $3.89 $5.35 - 5.65 Capital expenditures ? net (C$ million) (2) $3,794 $3,915 Annualized dividend (C$/share) $0.94 $1.10…
  3. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 3
    Oil WTI (US$/bbl) $43.37 $48.53 Natural gas NYMEX (US$/MMbtu) $2.45 $3.15 Natural gas AECO (C$/GJ) $1.98 $2.54 Heavy oil diff (%) 32% 25% Exchange rate (C$ = XUS$) $0.75 $0.77 Company Gross Reserves, before royalties, of crude oil…
  4. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 4
    Oil WTI (US$/bbl) $43.37 $48.53 Natural gas NYMEX (US$/MMbtu) $2.45 $3.15 Natural gas AECO (C$/GJ) $1.98 $2.54 Heavy oil diff (%) 32% 25% Exchange rate (C$ = XUS$) $0.75 $0.77 Company Gross Reserves, before royalties, of crude oil…
  5. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 5
    Our Strategy ? Flexible capital allocation to maximize value ? Strong Balance Sheet to support investment grade credit ? Defined growth/value enhancement plans by product/basin ? Diverse, balanced asset base ?Product mix ? Project…
  6. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 6
    FLEXIBLE CAPITAL ALLOCATION MAXIMIZIES SHAREHOLDER VALUE 4 Balance & Optimize the Four Pillars of Cash Flow Allocation Maximizing Shareholder Value Balance Sheet Strength Returns to Shareholders Economic Resource Development…
  7. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 7
    ? Significant portion of portfolio long-life, low decline ? Provides robust, sustainable cash flow ?Low reserve replacement risk ? Facilitates capital flexibility to maximize returns ? Strong inventory of low capital exposure…
  8. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 8
    North America North Sea Offshore Africa ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing, sustainable cash flow BUILDING A WORLD CLASS COMPANY 6 Balanced, Diverse…
  9. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 9
    0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 SIGNIFICANT VALUE TO UNLOCK 7 1P Reserves After Royalties Note: Pro forma - CNQ Includes 70% ownership in AOSP. Peers include: APA, APC, CVE, CHK, DVN, ECA, EOG, HSE, IMO, NBL,…
  10. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 10
    Canadian Natural?s Advantage Impact of Long-Life Assets on Decline Rates Production levels maintained 9.1% Note: Conventional Assets include North America crude oil and NGLs, International crude oil and NGLs and natural gas. Assumes…
  11. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 11
    0 0.5 1 2010 2011 2012 2013 2014 2015 2016 ? 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 operations…
  12. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 12
    0.055 0.060 0.065 0.070 0.075 2012 2013 2014 2015 2016 ? Proactive environmentally responsible operations ? Continuous improvement to reduce environmental impacts ? Meet or exceed all regulatory requirements ? Reducing Corporate…
  13. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 13
    Leveraging Technology to Create Value & Enhance Performance Research & Development Investment ($ million) Note: Sourced from Company internal reports. *Per Infosource Inc. R&D Spending Survey 2016. ? Largest crude oil and natural…
  14. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 14
    ? Acquisition closed May 31, 2017 ? 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 2.3 billion…
  15. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 15
    ($ million) 2016 2017F* North America natural gas & NGLs $277 $460 North America crude oil(1) 512 920 International crude oil 477 420 Total Exploration and Production $1,266 $1,800 Thermal In Situ Oil Sands* $192 $380 Horizon…
  16. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 16
    Targeted Production 2016 2017F % Change(1) Natural Gas (MMcf/d) 1,691 1,655 - 1,705 - Crude Oil & NGLs (Mbbl/d) North America(2) 240 236 - 246 1% North America ? Thermal In Situ(2) 111 112 - 122 5% North America ? Horizon Oil Sands…
  17. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 17
    750 850 950 1,050 1,150 1,250 1,350 Capital ($ billion) 2016 2017F 2018F 2019F Strip(2) $3.8 $3.9 $4.7 $4.9 HIGH VALUE PRODUCTION GROWTH 4 Year Production Growth (MBOE/d) (1) 2016 midpoint to 2019F midpoint using Strip…
  18. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 18
    -$1 $0 $1 $2 $3 $4 $5 STRONG CAPACITY TO STRENGTHEN B/S, PROVIDE RETURNS TO S/H AND GROW ASSETS 4 Year Free Cash Flow ($ billion) Capital ($ billion) 2016 2017F 2018F 2019F Strip pricing $3.8 $3.9* $4.7 $4.9 Note: Free cash…
  19. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 19
    ? Control of our destiny ? Control costs, development timing and pace ? eliminates commitments ? Operations flexibility with high working interest ? Minimal capital exposure and return on capital maximized ? Drill-to-fill strategy ?…
  20. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 20
    TOP TIER ASSET BASE Natural Gas & NGLs Core Area Summary ? Largest natural gas producer in Canada ? Q2/17 natural gas production ? ~1,603 MMcf/d ? Q2/17 average NGL yield ? ~25 bbl/MMcf ? Large resource base ? 10.6 Tcfe…
  21. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 21
    $0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 Production Capability (Bcfe/d) STRONG PORTFOLIO OF LIQUIDS-RICH GAS PROJECTS Deep Basin/Montney Natural Gas Projects Return on Capital, 15% After Tax $2.00-$2.50 Tier 3…
  22. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 22
    SIGNIFICANT LAND BASE & OPPORTUNITY North America Light Crude Oil Core Area Summary ? Q2/17 light crude oil and NGL production ?~91 Mbbl/d ? 2P reserves ? 233 million barrels(1) ? High quality light crude oil horizontal multi-frac…
  23. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 23
    ? Q2/17 light crude oil production ? ~46 Mbbl/d ? 2P reserves ? 386 million barrels(1) ? North Sea ? Operating efficiency gains and more favorable tax regime increase returns ? C?te d?Ivoire ? High return development…
  24. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 24
    $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 DIVERSE ASSET PORTFOLIO Light Crude Oil Projects Return on Capital, 15% After Tax $45.00-$50.00 Tier 3 - Deep Basin $40.00-$45.00 Tier 2 ? Deep Basin $25.00-$40.00…
  25. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 25
    Primary Heavy Crude Oil Core Area Summary ? Largest primary heavy oil producer in Canada ? Q2/17 production of ~89 Mbbl/d ? Acquired Cliffdale asset ~8,400 bbl/d 2017F ? Large inventory of development opportunities ? Premium land…
  26. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 26
    $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 ABILITY TO ADD SIGNIFICANT GROWTH Primary Heavy Crude Oil Projects Return on Capital, 15% After Tax Tier 1 Tier 2 Tier 3 Tier 4 0 20,000 40,000 60,000 80,000 100,000…
  27. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 27
    ? Industry leading EOR technology ? Capital requirements are reduced and polymer driven performance is realized ? Q2/17 production ~47 Mbbl/d ? Industry leading operating costs ? Q2/17 operating costs $6.38/bbl ? 2P reserves ? 384…
  28. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 28
    0 10,000 20,000 30,000 40,000 50,000 60,000 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Primary Polymerflood after Waterflood Polymer After Primary THREE PRODUCING REGIMES ? THREE DIFFERENT…
  29. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 29
    $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 GROWING PRODUCTION WITH LEADING EDGE TECHNOLOGY Pelican Lake Projects Return on Capital, 15% After Tax WTI (US$/bbl) 0 5,000 10,000 15,000 20,000 Infill Drilling and…
  30. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 30
    ? Q2/17 production volumes of ~106 Mbbl/d ? Acquired Carmon Creek asset ~5,400 bbl/d 2017F ? 2P reserves ? 2.52 billion barrels(1) ? Majority working interest and operatorship ? Effective and efficient thermal operator ? Leverage…
  31. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 31
    ? Strong performance ? Quarterly production in Q2/17 ? ~35 Mbbl/d with an SOR of 2.6 ? 2P reserves ? 164 million barrels* ? Reinitiated for development ? Major facility equipment purchased ? Lease delineated and ready for drilling…
  32. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 32
    ? Strong netbacks ? High quality crude oil ?Produced solution gas offsets fuel usage ? Significant development opportunities ? Steamflooding ?Follow-up process to CSS ? First commercial wells steamflood at Primrose East, Primrose…
  33. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 33
    $0.00 $10.00 $20.00 $30.00 $40.00 $50.00 $60.00 $70.00 LONG-LIFE, LOW DECLINE ASSETS GROWTH POTENTIAL Thermal In Situ Oil Sands Projects Return on Capital, 15% After Tax WTI (US$/bbl) Primrose Pads Kirby North Wolf Lake…
  34. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 34
    ? June 2017 production 202,300 (net to Canadian Natural) ? Annual production guidance increased to 102,000 -116,000 Mbbl/d ? Muskeg River and Jackpine mines across the river from Horizon mine ? Uses paraffinic bitumen extraction…
  35. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 35
    ? The Quest Carbon Capture and Storage (?Quest?) facility is designed to capture and store 1 million tonnes of CO2 per year ?Canadian Natural is a 70% working interest owner ? CO2 is captured from the hydrogen manufacturing process…
  36. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 36
    ? World Class asset ? 2P SCO reserves ? 3.60 billion barrels(1) ? Phased development (SCO) ?Phase 2B on stream ? Q2/17 production of ~190 Mbbl/d of SCO ?Targeted start-up of Phase 3 Q4/17 ? Optimization and reliability project…
  37. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 37
    80 82 84 86 88 90 92 94 96 2013 2014 2015 2016* 2017F BEST IN CLASS OPERATIONAL PERFORMANCE Horizon Oil Sands Industry Leading Utilization Rate Note: Peers include AOSP, Suncor, Syncrude. *2016 reflects planned downtime of…
  38. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 38
    50,000 100,000 150,000 200,000 250,000 Horizon Oil Sands Significant Operating Cost Reductions Production (bbl/d) Annual Operating Cost (C$/bbl) Phase 3 80,000 bbl/d Phase 2B 45,000 bbl/d Note: Production capacity assumes 3…
  39. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 39
    Horizon Optimization and Reliability ? Early indications show Phase 2B may exceed design rates ?Q1/17 ~192,500 bbl/d ?Q2/17 ~190,000 bbl/d ? Fractionation tower as well as VDU and DRU furnace debottlenecking ? Determined to be…
  40. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 40
    ? Strong financial position as of June 30, 2017 ? Debt/book capitalization 43% ? Available bank lines of $3.7 billion ? Disciplined allocation of capital delivers sustainable dividend policy ? 17 consecutive years of dividend…
  41. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 41
    Balance Sheet Improves Quickly Debt / Book Cap (%) Bank Covenant 39 Note: For illustrative purposes all 2017F values are annualized figures, assuming the AOSP transaction occurred on January 1, 2017. Forecast - Mid-point of 2017…
  42. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 42
    Balance Sheet Improves Quickly Long term range 1.8 to 2.2x (Debt / EBITDA) Transition to Lower Crude Oil Price Environment Note: 2017F reflects AOSP acquisition costs; Pro forma reflects impact of AOSP acquisition effective February…
  43. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 43
    (C$ million) Maturity Revolving bank line 1(1)(2) $2,425 June 2021 Revolving bank line 2(1) $2,425 June 2020 Non-revolving syndicated term facility(1) $2,200 October 2019 Non-revolving syndicated term facility (AOSP) (1)(3) $3,000 May…
  44. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 44
    Return to Shareholders 0 200 400 600 800 1,000 1,200 1,400 1,600 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017F Dividend Share Purchase PSK Distribution Horizon Phase 1 build years ($ million) 23%…
  45. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 45
    0.0% 0.5% 1.0% 1.5% 2.0% 2.5% CONSISTENT HISTORY OF VALUE CREATION Committed Management ? Substantial management and director wealth at stake ? Strong motivation for management to perform ? Delivers clear alignment with…
  46. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 46
    ? 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 flow to…
  47. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 47
    Hedging At June 30, 2017, the Company had the following derivative financial instruments outstanding to manage its commodity price risk: Sales Contracts Remaining term Volume Weighted average price Index Natural Gas AECO swaps Jul…
  48. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 48
    Key Historic Data Operational Information 2011 2012 2013 2014 2015 2016 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 389 451 478 531 564 524 Natural gas (MMcf/d) 1,257 1,220 1,158 1,555 1,726 1,691 Barrels of oil…
  49. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 49
    Natural gas (C$/Mcf) 3.73 2.44 2.44 3.30 2.78 1.99 Results of operations (C$ million, except per share) Funds flow from operations 6,547 6,013 7,477 9,587 5,785 4,293 per share ? Basic 5.98 5.48 6.87 8.78 5.29 3.90 Net earnings (loss)…
  50. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 50
    Share information Common shares outstanding (thousands) 1,096,460 1,092,072 1,087,322 1,091,837 1,094,668 1,110,952 Weighted average common shares ? Basic (thousands) 1,095,582 1,097,084 1,088,682 1,091,754 1,093,862 1,100,471 Dividend…
  51. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 51
    Daily Production Volumes (before royalties) Natural gas (MMcf/d) 1,650 - 1,710 1,655 - 1,705 Crude oil and NGLs (Mbbl/d) North America(1) 240 - 248 236 - 246 North America ? Thermal In Situ(1) 118 - 124 112 - 122 North America ?…
  52. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 52
    Net acquisitions, midstream and other 30 Horizon Oil Sands Project Project capital Directive 85 30 Phase 3 500 Optimization and Reliability 170 Owner?s costs and other 210 Total capital projects 910 Technology and Phase 4 15…
  53. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 53
    Other Information Cash income and other taxes (C$ millions) Sask. Resources Surcharge / Capital Tax $20 - 25 Current income taxes (recovery) ? North America $(100) - 0 Current income taxes (recovery) ? International and Petroleum Tax…
  54. August 2017 Corporate Presentation – Canadian Natural Resources Limited (CNRL) – slide 54
    Candian Natural Steve W. Laut President Tim S. McKay Chief Operating Officer Corey B. Bieber Chief Financial Officer and Senior Vice-President, Finance Mark Stainthorpe Director, Treasury and Investor Relations Jason Popko…

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