After achieving profits that more than replaced losses incurred in the economic shock inflicted by the Covid-19 virus pandemic, Canadian Natural Resources Ltd. (CNRL) has announced a C$275 million ($220 million) budget increase for this year.

CNRL

The corporate budget increase by 8.5% to C$3.48 billion ($2.78 billion) has a green tinge. Around C$45 million ($36 million) of the added spending would raise the number of depleted well abandonment cleanups this year by 800 to 3,300.

New drilling also continues, especially for liquids-rich natural gas in the Montney Shale that straddles northern Alberta and British Columbia. First-half 2021 asset deals expanded CNRL’s Montney properties by 107,000 acres to 1.3 million acres.

“Canadian Natural is in a strong position as our vast and diverse asset base delivered strong operational and financial results,” said CNRL president Tim McKay.

The Calgary firm reported first-half 2021 average gas production of 1.6 Bcf/d, up 10% from 1.45 Bcf/d in the same period of 2020.

CNRL total oil and gas-liquids production dipped in first-half 2021 to 925,731 b/d from 930,286 b/d a year earlier due to planned temporary maintenance turnaround plant closures.

In the oilsands, a CNRL mainstay, the maintenance-concentrated, first-half 2021 output slipped from a year ago to 414,959 b/d from 451,210 b/d. Resumed full production set a corporate record of 495,000 b/d in June.

Prices jumped across the corporate board as markets recovered from the 2020 COVID-19 pandemic.

Fully upgraded synthetic crude oil from CNRL oilsands mine and upgrader complexes nearly doubled to $60.45/bbl in the first half of 2021 from $33.33/bbl in the same period of 2020.

The quality discount against heavy crude bitumen from thermal underground extraction operations off benchmark West Texas Intermediate shrank year/year to an average of 19% from 43%. The average price of natural gas liquids jumped to $62.22/bbl in the first six months from $33.86 in the first half of 2020.

Natural gas fetched an average price of C$3.29/Mcf ($2.63/Mcf in the first six months, up by 54% year/year from C$2.13/Mcf ($1.70).

As a fossil fuel producer that was among the first to set a net-zero greenhouse gas emissions goal in 2018, CNRL has emerged as a top owner and user of field facilities for carbon capture, utilization and storage (CCUS).

The CCUS assets have capacity for 2.7 million tons/year. Current CNRL plans include reductions of 25% in oilsands carbon emissions, 20% off methane emissions, and 30-50% off water use by production operations. Targets for 2030 include an overall 50% cut off methane emissions across North America.

While raising its budget for environmental and production improvements, CNRL also aims to keep on rewarding investors. The firm announced plans to continue dividends and share buy-backs that paid CNRL stockholders C$1.3 billion ($1.04 billion) in first-half 2021.

CNRL reported earnings of C$2.9 billion ($2.3 billion) or C$2.47/share ($1.98) for the first six months of 2021. The earnings were nearly double CNRL losses of minus C$1.5 billion (minus US$1.2 billion) or C$1.35/share (US$1.08) in first-half 2020.