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October 2018 Corporate Presentation – Canadian Natural Resources (CNRL)

Canadian Natural Resources (CNRL) · Oct 1, 2018 · 59 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. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 1
  2. October 2018 Corporate 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 $4,595 Annualized dividend (C$/share)(3)…
  3. October 2018 Corporate 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. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 4
    Canadian Natural?s Key Message Delivering Free Cash Flow Safe Growing Sustainable
  5. October 2018 Corporate 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. October 2018 Corporate 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. October 2018 Corporate 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. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 8
    Canadian Natural?s Advantage Impact of Long Life Assets on Decline Rates (%) 23% Maintenance Capital of ~$3 billion required 21% 19% 19% 17% 16% 15% 53% Reduction in 13% Corporate…
  9. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 9
    IMO 2020 Regulations Positive Net Impact to CNQ ? Demand / Pricing for low sulphur diesel likely to increase ? Value of synthetic crude oil (?SCO?) likely to increase ? SCO has high distillate yield amenable to low sulphur…
  10. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 10
    1P Reserves After Royalties (MMBOE) 8,000 7,000 6,000 5,000 4,000 CNQ 3,000 2,000 1,000 0 CNQ SU CVE OXY EOG DVN NBL CHK IMO APC HSE APA ECA Peers Peers include: APA, APC,…
  11. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 11
    Advantages of Infrastructure Ownership/Operatorship ? Control of our destiny ? Control development timing and pace eliminates commitments ? Control costs ? Operations flexibility with high working interest ? Return on…
  12. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 12
    Natural Gas & NGLs Core Area Summary ? Largest natural gas producer in Canada BC AB SK MB ? Q2/18 natural gas production ???~1,485 MMcf/d ? Q2/18 average NGLs yield West 1,020 MMcf/d East 465…
  13. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 13
    Deep Basin/Montney Natural Gas Projects Return on Capital, 15% After Tax AECO (C$/GJ) $3.50 Infrastructure Advantage Tier 4 $3.00 Greenfield $2.50 $2.00 Tier 3 Tier 2 Tier 1…
  14. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 14
    North America Light Crude Oil Core Area Summary ? Q2/18 light crude oil and NGL production ? ~90 Mbbl/d BC AB SK MB ? 2P reserves ? 239 million barrels(1) ? High quality light crude oil horizontal multi-frac…
  15. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 15
    International Light Crude Oil Summary ? Q2/18 light crude oil production ? ~43 Mbbl/d ? 2P reserves North Sea ? 305 million barrels(1) ? North Sea ? Operating efficiency gains and more favorable tax regime increase…
  16. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 16
    Light Crude Oil Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 $30.00 Tier 3 Tier 4 $20.00 Tier 2…
  17. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 17
    Primary Heavy Crude Oil Core Area Summary CNQ Heavy Crude Oil Producing Properties CNQ Land Base CNQ ECHO Pipeline AB SK ~200 km ? Largest primary heavy crude oil producer in Canada ?…
  18. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 18
    Primary Heavy Crude Oil Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 Tier 2 Tier 1 $10.00 $0.00 7131925,0002531 0 1 Tier 5…
  19. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 19
    Pelican Lake Polymer Flood Crude Oil Production Polymer Injector ? Industry leading EOR technology ? Capital requirements are reduced and polymer driven performance is…
  20. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 20
    Pelican Lake Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 Tier 4 $30.00 Tier 3 $20.00 Tier 2 Tier 1 $10.00 $0.00 0 5,000 10,000…
  21. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 21
    Thermal In Situ Oil Sands Portfolio Birch Mtn. Ells River Grosmont Saleski Gregoire Grand Rapids Leismer Kirby Grouse Ipiatik Primrose CNQ Thermal Producing Properties Wolf Lake CNQ In…
  22. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 22
    Thermal In Situ Oil Sands Primrose / Wolf Lake Primrose North Steam Generation Facility Primrose South Steam Generation Facility Primrose East Steam Generation Facility Wolf Lake Central Oil…
  23. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 23
    Thermal In Situ Oil Sands Kirby South SAGD ? Strong performance ? Q2/18 production ~35 Mbbl/d ? 2018 plans ? 4 infill producers ??First production targeted July 2018 ? 2 step-out producer / injector well pairs…
  24. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 24
    Thermal In Situ Oil Sands Kirby North SAGD Kirby North ? Reinitiated for development ? Major facility equipment on site ? Lease delineated and ready for drilling ? Targeted first oil in Q4/2019 ?…
  25. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 25
    Thermal In Situ Oil Sands Projects Return on Capital, 15% After Tax WTI (US$/bbl) $70.00 $60.00 $50.00 $40.00 $30.00 $20.00 Primrose Pads $10.00 $0.00 0 25,000 50,000 Wolf Lake…
  26. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 26
    Oil Sands Mining & Upgrading Canadian Natural Advantages CNQ Operating Oil Sands Mining Operations CNQ Lands CNQ Horizon Oil Sands CNQ AOSP ~72 km Fort McMurray ? Operating synergies…
  27. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 27
    2018 Capital ($ million) 2017 2018F 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 $1,965 Thermal In Situ Oil Sands…
  28. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 28
    2018 Production Targeted Production 2017 2018F % Change(1) Natural Gas (MMcf/d) 1,662 1,550 - 1,600 (1%) Crude Oil & NGLs (Mbbl/d) North America 239 253 - 263 8% North America ? Thermal In Situ 120 107 - 127 (3%) North…
  29. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 29
    2018 Capital Breakdown Maintenance Capital ($ million) 2018F Exploration & Production(1)(3) $1,765 Thermal In Situ Oil Sands 335 Maintains Production Volumes Oil Sands Mining & Upgrading 880 Total Maintenance Capital…
  30. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 30
    5 Year Production Growth (MBOE/d) 1,350 1,275 1,200 1,125 1,050 975 900 825 750 2016 2017 2018F 2019F 2020F 2021F * Based upon midpoint to midpoint for indicated year range. Note: See Advisory for…
  31. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 31
    Canadian Natural 5 Year Free Cash Flow After Dividends ($ billion) $6 US$64.80/bbl WTI / US$20.88/bbl WCS diff US$52.03/bbl WTI / US$14.34/bbl WCS diff $5 Cash Flow Sensitivity…
  32. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 32
    Balance & Optimize the Four Pillars of Cash Flow Allocation Maximizing Shareholder Value Balance Returns to Economic Opportunistic Sheet Resource Shareholders Acquisitions Strength…
  33. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 33
    Robust Financial Position Long-Term Ratings Outlook Short-Term Ratings DBRS BBB High Stable n/a Standard & Poor?s BBB+ Stable A-2 Moody?s Baa2 Stable P-2 ? Strong financial position as of June 30, 2018 ? Debt/book…
  34. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 34
    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 See…
  35. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 35
    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 See Advisory for pricing assumptions and…
  36. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 36
    Returns to Shareholders ? Disciplined allocation of capital delivers sustainable dividend policy ? 18 consecutive years of dividend increases ? $0.335 per common share quarterly dividend declared March 2018, $1.34 per common…
  37. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 37
    Canadian Natural Return to Shareholders ($ million) 2,200 2,000 22% Dividend CAGR 1,800 (2009-2018F) 1,600 1,400 1,200 1,000 800 600 400 Horizon Phase 1 build years 200 0 2004 2005…
  38. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 38
    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% 1.0% ? Delivers…
  39. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 39
    Canadian Natural?s Key Message Delivering Free Cash Flow Safe Growing Sustainable
  40. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 40
    Canadian Natural A Unique E&P Company Canadian Natural Delivers: ?Operations ?Financial ? Vast, diverse well balanced assets ? Top tier effectiveness and efficiency ? Execution excellence ? Environmental…
  41. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 41
  42. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 42
    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…
  43. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 43
    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…
  44. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 44
    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…
  45. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 45
    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…
  46. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 46
    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…
  47. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 47
  48. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 48
    Balanced Portfolio of Natural Gas Sales Points (%) 100% 90% 80% 70% 60% 50% 40% 30% 20% AECO 10% 0% 2015 2016 2017 2018F Natural Gas AECO Hedges Internal Consumption Exports &…
  49. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 49
    Production per Share CAGR (2013 - 2017) Production/Share (% CAGR) 10.3% 10% 6% CNQ CNQ 2% -2% CNQ -6% -10% Peers Integrated Peers (11.0%) (11.6%)…
  50. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 50
    Return on Equity (2013 - 2017) (%) 7% 5.3% 5% 3% Peers Integrated Peers CNQ 1% (1%) (3%) (5%) (9%) (16%) (43%) (113%) (114%) Peers Include: APA, APC, CHE, COP, CVE, DVN, ECA, EOG, HSE,…
  51. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 51
    2018 Estimated Free Cash Flow Yield (%) 10% 9.6% 8% Peers Integrated Peers 6% CNQ 4% 2% 0% -2% Peers Include: APA, APC, COP, CVE, DVN, ECA, EOG, HSE, IMO, MRO, NBL, OXY, SU. Source: FactSet and RBC…
  52. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 52
    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% US Canada R.O.W. Super Majors…
  53. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 53
    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…
  54. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 54
    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…
  55. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 55
    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…
  56. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 56
    Results of operations (C$ million, except per share) Funds flow from operations 6,013 7,477 9,587 5,785 4,293 7,347 per share ? Basic 5.48 6.87 8.78 5.29 3.90 6.25 Net earnings (loss) 1,892 2,270 3,929…
  57. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 57
    Corporate Guidance August 2, 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…
  58. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 58
    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…
  59. October 2018 Corporate Presentation – Canadian Natural Resources (CNRL) – slide 59

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