Calgary production giant Canadian Natural Resources Ltd. (CNRL) scored a comeback in the first three months of 2021, reversing losses inflicted a year earlier by Covid-19 and the slump in oil and gas prices.
“As the global vaccine distribution increases and crude oil demand recovers, especially in the United States, we are seeing improved commodity pricing,” said President Tim McKay. “We are well positioned to generate significant free cash flow in 2021.”
Natural gas production grew to 1.59 Bcf/d from 1.4 Bcf/d in 1Q2020. Oil and natural gas liquids output increased to 979,352 b/d from 938,676. Alberta oilsands mining and underground extraction, cornerstones of the firm, gained 10% year/year to 736,333 b/d.
Prices fetched for natural gas jumped by 54% from a year ago to C$3.42/Mcf ($2.74). The firm’s average for all of its oil grades, from heavy bitumen to light conventional and upgraded synthetic crude, more than doubled to C$52.68/bbl ($42.14) from C$25.90 ($20.72).
While commodity prices rise, oilsands expenses are dropping. Operating costs for mined and upgraded production, the majority of operations in the northern Alberta bitumen belt, are down by 5% in the past year at C$19.82/bbl ($15.66).
Underground bitumen extraction costs rose by 3% to C$11.40/bbl ($9.01) because of increased prices for gas used for steam injections.
Growth capacity also has been secured, management noted.
CNRL reported holding delivery contracts for 10,000 b/d on a Keystone XL Pipeline addition scheduled for completion this year. It also has 94,000 b/d on the Trans Mountain Pipeline expansion planned to be in service by 2023.
The company also reported continuing work on adapting to climate change policies, noting it had reduced methane emissions from its operations by 28% since 2016.
To offset other greenhouse gas output, CNRL has planted 2.5 million trees as part of land reclamation at its oilsands mines. In addition, it said it has interests in carbon capture and storage projects capable of sequestering 2.7 million tons/year.
Net income in 1Q2021 was C$1.38 billion ($1.1 billion) or C$1.16/share (93 cents). In 1Q2021, net losses were C$1.28 billion ($1.02 billion) or minus C$1.08/share (minus 86 cents).
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