Canadian Natural CORPORATE PRESENTATION December 2021
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…
Canadian Natural Q3/21 Quarterly Operational Highlights BOE production of 1,238 MBOE/d 11% increase over Q3/20 Liquids production of 953 Mbbl/d 8% increase over Q3/20 NA E&P liquids, including thermal in situ production of 459 Mbbl/d…
Balanced, Diverse Portfolio Balanced, diverse production mix North Sea Long Life Low Decline production 80% of liquids North America International Brent exposure Vast, balanced resource base to develop Light crude oil and SCO…
Canadian Naturals Assets are Unique Robust Through All Cycles Long life low decline assets provide sustainable production and free cash flow even in lower price environment Ability to ramp up production faster with improving prices…
Canadian Naturals Advantage Low Corporate Decline Rate 2021F BOE Production Mix Oil Sands Mining Long Life & Upgrading Low Decline 0% Decline Production 61% Pelican & Thermal 13% Decline 10% Corporate Decline Rate…
1P Reserves After Royalties 2020 61% of reserves are high value SCO Reserve Life Index 30 years* 0 5,000 10,000 15,000 20,000 (MMBOE) Global Peers Peers include: BP, COP, CVX, RDS, SU, TTE 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, RDS, SU, TTE and XOM. Note: See Advisory for cautionary statements,…
Free Cash Flow Yield 2021F (%) 18% World class long life low decline assets Disciplined capital low maintenance capital 16% Top tier effective & efficient operations 14% 12% Peer Average 10% 8% Free Cash Flow 8,200…
Debt to Cash Flow 2021F (x) 1.8 1.6 1.4 Peer Average 1.2 1.0 0.8 0.6 Global Peers Source: RBC Global Integrated & E&P Comparative Valuation October 21, 2021. Peers include BP, COP, CVX, RDS, SU, TTE and XOM. STRONG…
Enterprise Value to Debt Adjusted Cash Flow 2021F (x) 8.0 Canadian Natural is a significant investment opportunity 7.0 Peer Average 6.0 5.0 4.0 Global Peers Source: RBC Global Integrated & E&P Comparative Valuation…
Canadian Natural 2021F Capital & Production Capital Expenditures ( million) 2020 2021F Total(1) 2,701 3,480 2021F Maintenance Capital 3.0 billion Targeted Production 2020 2021F % Change(2) Natural Gas (MMcf/d) 1,477 1,680 -…
Capital Discipline Balance and optimize the four pillars of capital allocation Flexible capital allocation maximizes shareholder value Further strengthen balance sheet Maximizing Shareholder Value Maintain investment grade credit…
Operational Excellence Area knowledge, extensive infrastructure and operatorship Top tier effectiveness and efficiency Strong history of capturing margin growth opportunities Process optimization and improvement Technology and…
Canadian Natural Near- & Mid-Term Growth Potential 70,000 bbl/d - 80,000 bbl/d of liquids* Conventional & Unconventional 300 MMcf/d - 350 MMcf/d of natural gas Thermal In Situ Pad additions 90,000 bbl/d - 100,000 bbl/d of bitumen…
Financial Strength
Canadian Natural Q3/21 Quarterly Financial Highlights Significant adjusted funds flow 3.6 billion Free cash flow 2.2 billion(1) Increasing returns to shareholders 1.1 billion Quarterly dividend increased 25% to 0.5875 per common share…
Canadian Natural 2021F Free Cash Flow ( billion) 14 US39 WTI US66 WTI 12 10 8 6 Dividend(2) 4 Dividend (1) 2 0 (3) (3) 2020 2021F (1) Actual 2020 dividends. (2) Actual 2021 dividends. Capital Free Cash Flow (3)…
Free Cash Flow Allocation Policy Currently repurchasing 1% of common shares outstanding 11 million shares per quarter Free cash flow allocation policy once 15 billion of absolute debt is reached Q4/21 Adjusted Funds Flow Less:…
Dividend Sustainability Through the Cycle 2019 vs. Q3 2021 Change (%) 60% CNQ increased dividend in November 2021 2 peers decreased their dividend 50% 1 peer reinstated their dividend 40% 4 peers increased their dividend 30%…
Long-Term Dividend Growth vs. Global Peers 10 Year CAGR (% CAGR) 22% 18% 14% 10% 6% Peer Average 2% -2% -6% Global Peers Peers include: Peers include BP, COP, CVX, FP, RDS, SU and XOM. Note: Annual 2012 to 2021. 2021…
Canadian Natural Returns to Shareholders ( million) Potential Incremental returns to shareholders through 4,000 free cash flow policy 3,500 22 years of consecutive dividend increases 20% CAGR since inception 3,000 2,500…
Canadian Natural Robust Financial Position Long-Term Ratings Outlook Short-Term Ratings DBRS BBB High Stable R-2 Standard & Poors BBB- Stable A-3 Moodys Baa2 Stable P-2 Balance Sheet strength as at September 30, 2021 Debt to book…
Canadian Natural Balanced Credit Facility Profile Revolving Credit Facilities (C million) Fully Drawn Term Credit Facilities* (C million) June 2022* 2,425 February 2023 1,000 June 2023* 2,425 February 2023 1,150 Operating demand…
Canadian Natural Balance Sheet Strength Debt/Cash Flow (x) 5.0 Strengthening metrics through the cycle Prudent free cash flow allocation 4.0 4.1x Priority towards absolute debt repayment 3.0 2.0 Net debt has been reduced by…
Canadian Natural Financial Strength Summary Balance Sheet Strength Maintained debt levels in 2020 Significant further debt reduction in 2021 Maximizing Shareholder Value Returns to Shareholders Increasing dividends Leading 22nd…
Canadian Natural Advantages 2021 Summary World class asset base 83% of reserves are Long Life Low Decline(1) 80% of total liquids production(2) No decline, high value net SCO production capacity 475,000 bbl/d Top tier corporate…
Canadian Natural Advantages 2021 Summary (contd) Increasing returns to shareholders 3.1 billion YTD* Sustainable and growing dividend Increased quarterly dividend by 25% in November 2021 second dividend increase of the year 22…
Asset Overview
Natural Gas, Light Crude Oil & NGLs Core Area Summary Large, Canadian, natural gas producer Q3/21 1,700 MMcf/d Q3/21 operating costs 1.14/Mcf Significant light crude oil and NGL production base in Canada Q3/21 89,000 bbl/d Q3/21…
Natural Gas, Light Crude Oil & NGLs BC Montney Defined Plan Townsend Strong Q3/21 production of 284 MMcf/d 6 net well pad on stream in Q2/21 Drill to fill average capital efficiency of 4,000/BOE/d 700 defined locations* Septimus…
Natural Gas, Light Crude Oil & NGLs Greater Wembley Area Defined Plan Strategically owned plant capacity of 205 MMcf/d Sexsmith Gas Plant 153 sections undeveloped land in Greater Wembley De-risked by proven production 495 defined…
Natural Gas, Light Crude Oil & NGLs Infrastructure Advantage Extensive owned and controlled infrastructure Umbach Drives costs lower West Nig Townsend Strategic infrastructure proximal to liquids rich land base Graham Low capital…
Natural Gas, Light Crude Oil & NGLs Summary Leveraging Canadian Naturals competitive advantages Large, diverse, balanced asset base Owned and controlled infrastructure Flexible capital allocation 2,500 defined locations*…
Heavy Crude Oil Core Area Summary 500 km Largest primary heavy crude oil producer Cliffdale in Canada Pelican Lake Q3/21 63,900 bbl/d Q3/21 operating costs 19.51/bbl AB SK Smith Industry leading polymer flood at Pelican Lake…
Technology & Innovation Heavy Crude Oil Horizontal Multilateral & Fishbone Wells Multilateral & Fishbone Multilateral technology unlocks multi-year low-risk development opportunities Benefits: Increased recovery up to 30x over…
Pelican Lake Operating Costs Leveraging area and technological (/bbl) 9.00 expertise, economies of scale to drive value growth Facility consolidations 8.00 Improved polymer quality and price Consolidation of power contracts Q4/17…
Heavy Crude Oil Summary Leveraging Canadian Naturals competitive advantages Large, diverse, balanced asset base Owned and controlled infrastructure Flexible capital allocation 3,000 defined locations* Effective and efficient…
Thermal In Situ Oil Sands Asset Overview CNQ Thermal Producing Properties Birch Mtn. Long Life Low Decline assets CNQ In Situ Project Inventory Peers 122 billion barrels BIIP(1) Ells River Facility capacity of 340,000 bbl/d(2)…
Thermal In Situ Oil Sands Primrose / Wolf Lake Overview Total facility capacity 140,000 bbl/d Leverage annual unutilized facility capacity of 60,000 bbl/d Primrose North Future pad adds capital efficiency 10,000/bbl/d(1) Primrose…
Thermal In Situ Oil Sands Kirby / Jackfish SAGD Overview Total facility capacity of 200,000 bbl/d(1) Kirby Jackfish Leverage annual unutilized facility capacity North of 35,000 bbl/d Future pad adds capital efficiency 8,000/bbl/d(2)…
Technology & Innovation Solvents Reducing GHG Emissions Through Steam Efficiencies Co-injecting solvent with steam Kirby South is currently piloting solvent SAGD SOR and GHG intensity reduction of 45% Steam Assisted Gravity Drainage…
Thermal In Situ Oil Sands Summary Large, Long Life Low Decline asset base Capture low cost opportunities with annual unutilized capacity of 95,000 bbl/d Leveraging technology and innovation Solvents Significant GHG emission…
Oil Sands Mining & Upgrading Industry leading oil sands mine operator Net capacity 475,000 bbl/d of SCO CNQ Operating Oil Sands Mines CNQ Lands No decline, reservoir risk or reserve replacement cost 50+ year reserve life(1)…
Oil Sands Mining & Upgrading Plant Capacity Utilization (%) 90% 80% 70% 1 year 2 year CNQ Peer Average Note: Sourced from TD research: Mine your own Business reports, includes trailing data as of July 2021 Peers Include:…
Oil Sands Mining & Upgrading Operating Costs (/bbl) 45.00 40.00 Over a 50% reduction in operating costs 35.00 Equates to a 30.00 3.5 billion reduction in annual 25.00 operating costs in 2020* 20.00 15.00 10.00 2013 * 2013 * 2020…
Horizon Oil Sands Mid-Term Opportunities Opportunities provide incremental economic production Incremental 35,000 bbl/d - 45,000 bbl/d of SCO Reliability improvements Diluent Recovery and Vacuum Distillate Units Potential…
Technology & Innovation In-Pit Extraction Process (IPEP) IPEP is a modular extraction plant that separates bitumen in the mine pit Benefits Reduces GHG emissions by 40% Eliminates tailings ponds, as it produces dry stackable…
Oil Sands Mining & Upgrading Summary Long Life, no decline assets 475,000 bbl/d net capacity Capturing synergies through technology and innovation Reliability and capacity increases In-Pit Extraction Process Effective and efficient…
Environmental, Social & Governance
2020 Environmental Achievements Canadian Natural's corporate GHG emissions intensity continues to improve Decreased by 18% from 2016 levels Decreased by 2% from 2019 levels One of the largest owners of Carbon Capture and Storage and…
Strong Commitment to Improving Performance New Environmental Targets 50% in E&P methane emissions by 2030 from 2016 baseline Reduction 40% in in situ fresh water intensity Reduction by 2026 from 2017 baseline 40% in mining…
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) 2021 Social Progress Index (SPI)…
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 48…
Continuous Improvement in GHG Emissions Corporate GHG Emissions Intensity (tonnes CO2e/BOE) 0.075 0.070 32% 0.065 Reduction in GHG intensity since 2012 0.060 Equivalent to removing 0.055 1.9 million Cars off the road…
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…
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…
Oil Sands Pathways to Net Zero Initiative Canadas largest oil sands producers form an alliance to achieve net zero GHG emissions Members includes Canadian Natural, Cenovus, ConocoPhillips Canada, Imperial, MEG and Suncor Progressing…
Carbon Capture & Sequestration / Storage Technology Quest TOP TIER CO2 capturer & sequesterer in the world(1) Reduced CO2 footprint Reduced CO2 charges Tonnes/Year Equivalent to Horizon Quest(2) 1.1 million removing Horizon…
Industry Leading Safety Performance (Per 200,000 Hours) 0.75 25% 0.50 TRIF reduction vs 2019 58% 0.25 TRIF reduction vs 2016 0.00 2016 2017 2018 2019 2020 Total Recordable Injury Frequency TARGET: NO SAFETY INCIDENTS,…
Investing in Indigenous Communities 490 Million In contracts with local indigenous businesses in 2020 1.0 Billion In last 2 years Canadian Natural works with 160 Indigenous businesses Fort McKay Mtis Elder and Fort McKay…
Governance Risk Assessment & Mitigation Strong track record of identifying, assessing, adapting, aligning and executing Board of Directors as well as Board Governance and Risk Committees Review and hold management accountable to…
Management Aligned With Shareholders Management Ownership (% of Outstanding Shares) 2.5% 2.3% 2.0% Substantial Management & Director invested wealth delivers clear alignment with shareholder interests 1.5% 1.0% 0.5%…
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…
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…
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. Thermal In Situ Oil Sands…
Advisory Pricing Assumptions 2021F* 2020 2019 Strip US WTI/bbl 66.31 39.40 57.04 C AECO/GJ 3.29 2.12 1.54 SCO Diff/(Prem) US/bbl 1.69 3.14 0.69 WCS Differential US/bbl 12.94 12.57 12.79 FX 1.00 US = X C 1.25 1.34 1.33 *Strip…
Advisory Free Cash Flow Free cash flow is a non-GAAP measure that represents cash flows from operating activities as presented in the Company's consolidated Statements of Cash Flows, adjusted for the net change in non-cash working…
Advisory Reserves Notes: 1. Company Gross reserves are working interest share before deduction of royalties and excluding any royalty interests. 2. Information in the reserves data tables may not add due to rounding. BOE values and oil…
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