Canadian Natural Q1/21 CORPORATE UPDATE May 6, 2021
Agenda Presentation Introduction Corey Bieber Q1/21 Corporate Update Tim McKay Financial Strength Mark Stainthorpe Summary Tim McKay Questions & Answers 2
Advisory Special Note Regarding 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…
Reporting Disclosures Special Note Regarding non-GAAP and Other Financial Measures This presentation includes references to financial measures commonly used in the crude oil and natural gas industry, such as: adjusted net earnings (loss)…
Environmental, Social & Governance
The World Needs More Canadian Energy (Aggregate ESG Score) 300 Environment(1) Social(2) 250 Governance(3) 200 Average 150 100 50 0 (1) 2020 Yale Environment Protection Index (EPI). (2) 2020 Social Progress Index (SPI)…
Carbon Capture, Utilization and Storage (CCUS) Federal Budget 2021 Federal budget includes support for CCUS and low-carbon fuels (e.g. hydrogen) as important pathways to achieve climate objectives Proposed CCUS tax credit 319 million…
Canadian Natural Has Delivered Advancing Innovation Recognize the need to reduce GHG emissions 3.9 Billion Leverage technology and Canadian ingenuity INVESTED IN RESEARCH & DEVELOPMENT* Opportunities to reduce emissions further 77.4…
Leading Canadian Oil Sands Intensity GHG Emissions Intensity (kgCO2/bbl) 80 70 60 50 35% 40 LOWER THAN TOTAL PEER UPSTREAM SCOPE 1 AVERAGE 30 20 10 0 Total Peer Oil Sands Total peer average includes all Canadian…
Carbon Capture & Sequestration / Storage Technology Quest TOP TIER CO2 CAPTURER AND SEQUESTERER IN THE WORLD(1) Reduced CO2 footprint Reduced CO2 charges Tonnes/Year EQUIVALENT TO Horizon Quest(2) 1.1 million REMOVING Horizon…
Technology & Innovation Solvents Reducing GHG Emissions Through Steam Efficiencies Co-injecting solvent with steam Kirby South is currently piloting solvent SAGD Steam Assisted Gravity Drainage Next steps: (SAGD) Primrose solvent…
Technology & Innovation Journey to Net Zero Near-Term Actions Medium-Term Actions Long-Term Actions IPEP pilot IPEP commercialization Carbon capture and conversion (carbon fibers, asphalts, plastics) Solvent EOR pilots Solvent EOR…
Continuous Improvement in GHG Emissions Corporate GHG Emissions Intensity (tonnes CO2e/BOE) 0.075 0.070 32% REDUCTION IN GHG INTENSITY 0.065 SINCE 2012 0.060 EQUIVALENT TO REMOVING 0.055 1.9 million CARS OFF THE ROAD…
The Strength of Canadian Naturals Business Model Leaders in ESG performance Advantaged assets Long life low decline assets Effective and efficient operations Leverage technology, innovation and continuous improvement Delivered game…
Q1/21 Corporate Update
Canadian Natural Q1/21 Quarterly Operational Highlights Record BOE production of 1,246 MBOE/d 6% increase over Q1/20 Record liquids production of 979,400 bbl/d 4% increase over Q1/20 Record Oil Sands Mining and Upgrading production of…
Canadian Natural Advantages Large, Long Life Low Decline Asset Base Diversified Asset Base & Product Mix Flexible Capital Allocation / Effective & Efficient Operations Low Maintenance Capital Leading Free Cash Flow…
Balanced, Diverse Portfolio Balanced, diverse production mix North Long Life Low Decline production 81% of liquids Sea North America International Brent exposure Vast, balanced resource base to develop Light crude oil and SCO…
Canadian Naturals Advantage Low Corporate Decline Rate 2021B BOE Production Mix Oil Sands Mining Long Life & Upgrading Low Decline 0% Decline Production 63% Pelican & Thermal 13% Decline 10% Corporate Decline Rate…
Canadian Natural 2021 Budget Capital Expenditures ( million) 2020 2021B Total(1) 2,701 3,205 2021B Maintenance Capital 3.0 billion 2021B Growth Capital 200 million Targeted Production 2020 2021B % Change(2) Natural Gas (MMcf/d)…
1P Reserves After Royalties 2020 61% of reserves are high value SCO Reserve Life Index 30 plus years* 0 5,000 10,000 15,000 20,000 (MMBOE) Global Peers Peers include: BP, COP, CVX, FP, RDS, SU and XOM. *Reserve Life Index…
Net Debt to Reserves 2020 (US/BOE) 10.00 8.00 6.00 Peer Average 4.00 2.00 0.00 Global Peers Source: Company reports. Peers include BP, COP, CVX, FP, RDS, SU and XOM. TOP DECILE FINANCIAL POSITION 22
Free Cash Flow Yield 2021F (%) 24% World class long life low decline assets Disciplined capital low maintenance capital 20% Top tier effective and efficient operations 16% Peer Average 12% 8% 4% Free Cash Flow 7,900…
Debt to Cash Flow 2021F (x) 2.2 1.8 1.4 Peer Average 1.0 0.6 0.2 Global Peers Source: RBC Global Integrated & E&P Comparative Valuation - April 22, 2021. Peers include BP, COP, CVX, FP, RDS, SU and XOM. STRONG…
Enterprise Value to Debt Adjusted Cash Flow 2021F (x) 9.0 Canadian Natural is a significant 8.0 investment opportunity 7.0 6.0 Peer Average 5.0 4.0 3.0 Global Peers Source: RBC Global Integrated & E&P Comparative…
Canadian Natural Significant Investment Opportunity World class reserve base, assets and operations Large, proven, long life low decline, high value reserves Disciplined capital Low maintenance capital Top tier effective and efficient…
Financial Strength
Canadian Natural Q1/21 Quarterly Financial Highlights Significant adjusted funds flow 2.7 billion Free cash flow 1.4 billion(1) Disciplined capital 0.8 billion Balance sheet is strong Reduced absolute net debt by 1.4 billion from…
Canadian Natural 2021F Free Cash Flow ( billion) 12 US39 WTI US60 WTI 10 8 6 Dividend(2) 4 Dividend(1) 2 0 (3) 2020 2021F (1) Actual 2020 dividends. Capital Free Cash Flow (2) Current quarterly dividend annualized.…
Canadian Natural Balance Sheet Strength ( millions) 25,000 Free Cash Flow generation 23,000 is significant 21,000 Balance Sheet strengthens very quickly 19,000 Over 3.2 billion returned to 17,000 shareholders over same period(2)…
Canadian Natural Balance Sheet Strength Debt/EBITDA (x) 4.5 Strengthening metrics through the cycle 4.0 Prudent free cash flow allocation 3.5 3.6x Priority towards absolute debt repayment 3.0 Demonstrates resilience of high…
Changes to Net Debt 2019 to 2020 (%) In 2020 Canadian Natural: 90% Maintained net debt levels Executed share repurchases 70% Increased dividend Increased reserves 50% Increased production Opportunistic natural gas acquisition…
Dividend Sustainability Through the Cycle 2020 vs. Q1 2021 Change (%) 15% CNQ increased dividend in March 2021 4 peers decreased their dividend 10% 2 peers maintained their dividend 1 peer increased their dividend 5% 0%…
Mid-Term Dividend Growth vs. Global Peers 5 Year CAGR (% CAGR) 15% 10% 5% 0% Peer Average -5% -10% (16%) (23%) Global Peers Peers include: Peers include BP, COP, CVX, FP, RDS, SU and XOM. Note: Annual 2017 to 2021.…
Long-Term Dividend Growth vs. Global Peers 10 Year CAGR (% CAGR) 15% 10% 5% 0% Peer Average -5% (10%) Global Peers Peers include: Peers include BP, COP, CVX, FP, RDS, SU and XOM. Note: Annual 2012 to 2021. 2021…
Long-Term Dividend Growth vs. Global Peers 20 Year CAGR (% CAGR) 25% 20% 15% 10% Peer Average 5% 0% -5% Global Peers Peers include: Peers include BP, COP, CVX, FP, RDS, SU and XOM. Note: Annual 2002 to 2021. 2021 based…
Canadian Natural Returns to Shareholders Dividends ( million) 2,250 2,000 21 years of consecutive dividend increases 20% CAGR since inception 1,750 Horizon Phase 3 1,500 complete 1,250 1,000 750 500 Horizon Phase 1 build…
Canadian Natural Financial Strength Summary Balance Sheet Strength Maintained debt levels in 2020 Maximizing Significant further debt reduction in 2021 Shareholder Value Returns to Shareholders Increased dividends in 2020 and 2021…
Summary
Canadian Natural Advantages Summary World class asset base 83% of reserves are Long Life Low Decline(1) 81% of total liquids production(2) No decline, high value SCO production 455,000 bbl/d Top tier corporate decline rate 10%…
Canadian Natural Advantages Summary (contd) Leading free cash flow generation 5.7 billion to 6.2 billion* Supports sustainable and growing dividend Increase quarterly dividend by 11% in March 2021 21 consecutive years of dividend…
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