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May 2018 Investor Presentation – Canadian Natural Resources (CNRL)

Canadian Natural Resources (CNRL) · May 15, 2018 · 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. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 1
  2. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 2
    Delivering Value and Growth SNAPSHOT 2017 2018F Funds Flow (C$ million)(1) $7,347 $10,100 - $10,500 Per share $6.25 $8.25 - 8.55 Capital expenditures ? net (C$ million)(2) $4,972 $4,335 Annualized dividend (C$/share)(3)…
  3. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 3
    Oil WTI (US$/bbl) $50.93 $64.80 Natural gas NYMEX (US$/MMbtu) $3.11 $2.86 Natural gas AECO (C$/GJ) $2.30 $1.43 Heavy oil diff (%) 23% 32% Exchange rate (C$ = XUS$) $0.77 $0.79 Company Gross Reserves, before royalties, of crude…
  4. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 4
    Canadian Natural?s Key Message Delivering Free Cash Flow Safe Growing Sustainable
  5. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 5
    Canadian Natural?s Strategy ? Flexible capital allocation to maximize value ? Strong Balance Sheet supports investment grade credit ? Defined growth / value enhancement plans by product and basin ? Large, diverse, balanced…
  6. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 6
    Balanced, Diverse Portfolio North America North Sea Offshore Africa ? Balanced, diverse production mix ? International exposure ? Vast, balanced resource base to develop ? Growing,…
  7. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 7
    Advantages of a Balanced Portfolio ? Facilitates capital flexibility to maximize returns ? Diverse product types, transportation logistics and time horizons ? Strong inventory of Low Capital Exposure Assets ? Primary heavy…
  8. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 8
    Canadian Natural?s Advantage Impact of Long Life Assets on Decline Rates (%) 23% Maintenance Capital of ~$3 billion required 21% 19% 19% 17% 16% 15% 53% Reduction in 13% Corporate…
  9. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 9
    1P Reserves After Royalties (MMBOE) 8,000 7,000 6,000 5,000 4,000 CNQ 3,000 2,000 1,000 0 CNQ SU CVE OXY EOG DVN NBL CHK IMO APC HSE APA ECA Peers Peers include: APA, APC, CVE,…
  10. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 10
    Advantages of Infrastructure Ownership / Operatorship ? Control of our destiny ? Control development timing and pace eliminates commitments ? Control costs ? Operations flexibility with high working interest ? Return on…
  11. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 11
    Natural Gas & NGLs Core Area Summary ? Largest natural gas producer in Canada BC AB SK MB ? Q1/18 natural gas production ???~1,547 MMcf/d ? Q1/18 average NGLs yield East ???~26 bbl/MMcf ? Large resource base…
  12. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 12
    Deep Basin/Montney Natural Gas Projects Return on Capital, 15% After Tax AECO (C$/GJ) $3.50 Infrastructure Advantage Tier 4 $3.00 Greenfield $2.50 $2.00 Tier 3 Tier 2 Tier 1…
  13. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 13
    North America Light Crude Oil Core Area Summary ? Q1/18 light crude oil and NGL production ? ~93 Mbbl/d BC AB SK MB ? 2P reserves ? 239 million barrels(1) ? High quality light crude oil horizontal multi-frac…
  14. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 14
    International Light Crude Oil Summary ? Q1/18 light crude oil production ? ~41 Mbbl/d ? 2P reserves North Sea ? 305 million barrels(1) ? North Sea ? Operating efficiency gains and more favorable tax regime increase…
  15. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 15
    Light Crude Oil Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 $30.00 Tier 3 Tier 4 $20.00 Tier 2…
  16. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 16
    Primary Heavy Crude Oil Core Area Summary CNQ Heavy Crude Oil Producing Properties CNQ Land Base CNQ ECHO Pipeline AB SK ~200 km ? Largest primary heavy crude oil producer in Canada ?…
  17. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 17
    Primary Heavy Crude Oil Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 Tier 2 Tier 1 $10.00 $0.00 25,000 0 1 7 13192531…
  18. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 18
    Pelican Lake Polymer Flood Crude Oil Production Polymer Injector ? Industry leading EOR technology ? Capital requirements are reduced and polymer driven performance is…
  19. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 19
    Pelican Lake Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 Tier 4 $30.00 Tier 3 $20.00 Tier 2 Tier 1 $10.00 $0.00 0 5,000 10,000…
  20. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 20
    Thermal In Situ Oil Sands Portfolio Birch Mtn. Ells River Grosmont Saleski Gregoire Grand Rapids Leismer Grouse Kirby Ipiatik Primrose Wolf Lake Marie CNQ Thermal Producing Properties…
  21. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 21
    Thermal In Situ Oil Sands Primrose / Wolf Lake Primrose North Steam Generation Facility Primrose South Steam Generation Facility Primrose East Steam Generation Facility Wolf Lake Central Oil…
  22. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 22
    Thermal In Situ Oil Sands Kirby South SAGD ? Strong performance ? Q4/17 production ~35 Mbbl/d ? 2018 plans ? 4 infill producers ??First production targeted ? July 2018 ? 2 step-out producer / injector well pairs…
  23. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 23
    Thermal In Situ Oil Sands Kirby North SAGD ? Reinitiated for development ? Major facility equipment on site Kirby North ? Lease delineated and ready for drilling ? Targeted first oil in Q1/2020 ? Targeted capacity of…
  24. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 24
    Thermal In Situ Oil Sands Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 Primrose Pads $10.00 $0.00 0 25,000 50,000 Wolf Lake…
  25. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 25
    Oil Sands Mining & Upgrading Canadian Natural Advantages CNQ Operating Oil Sands Mining Operations CNQ Lands CNQ Horizon Oil Sands CNQ AOSP ~72 km Fort McMurray ? Operating synergies 2…
  26. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 26
    2018 Capital Budget ($ million) 2017 2018B North America Natural Gas & NGLs $488 $440 North America Crude Oil 1,036 1,115 International Crude Oil 416 410 Total Exploration & Production $1,940 $1,965 Thermal In Situ Oil Sands…
  27. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 27
    2018 Production Targeted Production 2017 2018B % Change(1) Natural Gas (MMcf/d) 1,662 1,650 - 1,710 - Crude Oil & NGLs (Mbbl/d) North America 239 253 - 263 8% North America ? Thermal In Situ 120 107 - 127 (3%) North…
  28. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 28
    2018 Capital Breakdown Maintenance Capital ($ million) 2018B Exploration & Production(1)(3) $1,765 Thermal In Situ Oil Sands 335 Maintains Production Volumes Oil Sands Mining & Upgrading 880 Total Maintenance Capital…
  29. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 29
    5 Year Production Growth (MBOE/d) 1,350 1,275 1,200 1,125 1,050 975 900 825 750 Capital ($ billion) 2016 2017 2018B 2019F 2020F 2021F Strip pricing $3.8 $4.9(2) $4.3 $4.4 $4.5 $4.5 (1) Based…
  30. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 30
    Canadian Natural 5 Year Free Cash Flow After Dividends ($ billion) US$64.80/bbl WTI / US$20.88/bbl WCS diff $6 US$52.03/bbl WTI / US$14.34/bbl WCS diff $5 Cash Flow…
  31. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 31
    Balance & Optimize the Four Pillars of Cash Flow Allocation Maximizing Shareholder Value Balance Returns to Economic Opportunistic Sheet Resource Shareholders Acquisitions Strength…
  32. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 32
    Robust Financial Position Long-Term Ratings Outlook Short-Term Ratings DBRS BBB High Stable n/a Standard & Poor?s BBB+ Negative A-2 Moody?s Baa3 Stable P-3 ? Strong financial position as of March 31, 2018 ? Debt/book…
  33. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 33
    Canadian Natural Debt to Book Capitalization Improves Quickly Debt/Book Cap (%) 70% Bank Covenant 60% 50% 40% 30% 20% 10% 0% 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F Actual…
  34. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 34
    Canadian Natural Balance Sheet Strengthens Quickly (Debt/EBITDA) 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2019F 2020F Actual Forecast…
  35. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 35
    Canadian Natural Return to Shareholders ($ million) 22% Dividend CAGR 1,600 (2009-2018F) 1,400 1,200 1,000 800 600 400 Horizon Phase 1 build years 200 0 2004 2005 2006 2007 2008 2009 2010 2011 2012…
  36. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 36
    Committed Management Management Ownership (% of Outstanding Shares) 2.5% 2.3% 2.0% ? Substantial management and director wealth at stake ? Strong motivation for management to perform 1.5% ? Delivers clear alignment with…
  37. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 37
    Canadian Natural?s Key Message Delivering Free Cash Flow Safe Growing Sustainable
  38. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 38
    Canadian Natural A Unique E&P Company Canadian Natural Delivers: ?Operations ?Financial ??Vast, diverse well balanced assets ??Disciplined capital allocation ??Top tier effectiveness and efficiency ??Strengthening balance…
  39. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 39
  40. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 40
    Delivering Safety Excellence Corporate total recordable injury frequency (incident per 200,000 hours) 1.00 0.50 ? Safety is a core value ? Committed to continuous improvement ? No harm to people, no…
  41. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 41
    Leveraging Technology to Create Value & Enhance Performance Research & Development Investment Leading R&D Investor Average ($ million) ? Largest crude oil and natural gas R&D $500 investor in Canada in 2016…
  42. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 42
    Investing in Carbon Capture & Sequestration / Storage ? 3rd largest CO capturer and sequesterer for oil and gas 2 sector in the world(1) Quest ? 17.9 million tonnes of CO2e conserved in last 5 years ? Reduced CO2 footprint…
  43. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 43
    Environmental Excellence Corporate GHG Emissions Intensity (tonnes CO2e/BOE) 0.070 18% Overall Reduction 0.060 0.050 2013 2014 2015 2016 2017 ? Proactive environmentally responsible…
  44. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 44
    Canadian Natural GHG Advantage Primary Heavy Crude Oil Vent (e3m3/year) 200,000 160,000 71% Reduction Absolute Vent Volumes 120,000 80,000 40,000 0 2013 2014 2015 2016 2017 ? Reduction of 71% from 2013…
  45. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 45
  46. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 46
    Balanced Portfolio of Natural Gas Sales Points (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% AECO 10%…
  47. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 47
    2016 Corporate Breakeven Oil Price (US$/BOE) $80.00 $60.00 $40.00 $20.00 $0.00 Peer Average $44.36 CNQ Peers Integrated Peers Peers include: APA, APC, CPG,…
  48. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 48
    Production per Share CAGR (2012 - 2016) Production/Share (% CAGR) 10% 5.9% 5% CNQ 0% CNQ -5% -10% Peers Integrated Peers (15.7%) Peers include: APA, APC, COP, CVE, DVN, ECA, EOG, HSE, MRO,…
  49. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 49
    Return on Equity (2012 - 2016) (%) 8% 6% 4% 2% 0% -2% 8.2% 6.0% 2017 CNQ CNQ Peers Integrated Peers (12%) (14%) (17%) (29%) Peers Include: APA, APC, COP, CVE, DVN, ECA,…
  50. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 50
    2018 Estimated Free Cash Flow Yield (%) 10% 8% 6% 4% 2% 0% -2% 9.6% CNQ Peers Integrated Peers Peers Include: APA, APC, COP, CVE, DVN, ECA, EOG, HSE, IMO, MRO, NBL,…
  51. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 51
    Returns to Shareholders Short Term Change in Dividend vs. Peers (2014-2016) (%) Change in Dividend 25% 20% 15% 10% 5% 0% -5% -10% -15% -20% 22% CNQ US Canada R.O.W.…
  52. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 52
    Advisory Special Note Regarding Currency, Production and Reserves In this document, all references to dollars refer to Canadian dollars unless otherwise stated. Reserves and production data are presented on a before royalties…
  53. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 53
    Forward Looking Statements Certain statements relating to Canadian Natural Resources Limited (the ?Company?) in this document or documents incorporated herein by reference constitute forward-looking statements or information…
  54. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 54
    Advisory Cautionary Statement Project progress and financial results are dependent upon economic and regulatory conditions, commodity prices, global economic factors, project sanction and capital allocation. Pricing…
  55. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 55
    Advisory Reserves Notes: (1) Company Gross reserves are working interest share before deduction of royalties and excluding any royalty interests. (2) Company Net reserves are working interest share after deduction of…
  56. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 56
    A barrel of oil equivalent (?BOE?) is derived by converting six thousand cubic feet of natural gas to one barrel of crude oil (6 Mcf:1 bbl). This conversion may be misleading, particularly if used in isolation, since the 6 Mcf:1 bbl…
  57. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 57
    Key Historic Data Operational & Financial Information 2012 2013 2014 2015 2016 2017 Daily production, before royalties Crude oil and NGLs (Mbbl/d) 451 478 531 564 524 685 Natural gas (MMcf/d) 1,220 1,158…
  58. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 58
    Ratios Debt to funds flow, trailing 12 months 1.5x 1.3x 1.4x 2.6x 3.5x 3.1x Debt to book capitalization 26% 27% 33% 38% 39% 41% Return on common equity, trailing 12 months 8% 9% 14% (2%) (1%) 8% Daily…
  59. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 59
  60. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 60
    May 3, 2018 Daily Production Volumes (before royalties) Natural gas (MMcf/d) Crude oil and NGLs (Mbbl/d) North America ? E&P North America ? Thermal In Situ North America ? Oil Sands Mining and…
  61. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 61
  62. May 2018 Investor Presentation – Canadian Natural Resources (CNRL) – slide 62
    Steve W. Laut Executive Vice-Chairman Tim S. McKay President Corey B. Bieber Chief Financial Officer and Senior Vice-President, Finance Mark A. Stainthorpe Vice-President, Finance ? Capital Markets Jason…

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