Canadian Natural Resources first quarter profit more than doubles
Canadian Natural Resources Ltd.'s profits more than doubled from a year ago in the first quarter, as surging oil prices pushed the Calgary-based energy company closer to reaching its debt reduction target.
On Thursday, CNRL said it earned $3.1 billion or $2.63 per diluted share for the quarter ended March 31, up from $1.38 billion or $1.16 per diluted share in the same quarter last year.
With the war in Ukraine pushing oil prices to heights not seen in years, CNRL said it now expects its net debt level to fall below $8 billion in late 2022 or early 2023. The company's net debt sat at $13.8 billion at the end of the first quarter.
"It obviously depends on your forecast for pricing and lots of other factors that impact the ability to pay down the debt, but we are looking at significant free cash flow through the year," said chief financial officer Mark Stainthorpe on a conference call with analysts Thursday. "I would suggest sometime later this year or early next year."
CNRL's board has set $8 billion as a "base level'' of corporate debt. Once that level is reached, additional free cash flow will be allocated as incremental returns to shareholders, the company says.
CNRL – which is now Canada's largest oil and gas company by market capitalization – paid out approximately $1.8 billion in shareholders in the first quarter of 2022, including $700 million in dividends and $1.1 billion in share repurchases.
"Of note, while we thought it could have been a possibility, the company did not raise its dividend for a third quarter in a row,'' said Eight Capital analyst Phil Skolnick in a research note.
Last year, CNRL indicated that to the extent its net debt is below $15 billion, such an amount would be made available for strategic growth and acquisition opportunities.
In the first quarter, the company completed a number of acquisitions, including the remaining 50 per cent interest in the Pike lands in the Jackfish and Kirby areas in northern Alberta, and the liquids-rich Montney lands in the Wembley area of northern Alberta.
On the call, CNRL president Tim McKay said the company intends to be disciplined when it comes to pursuing any future acquisitions.
"Up to this point, acquisitions have always been a part of our strategy,'' McKay said. "However, we have no gaps in our portfolio and acquisitions need to make sense and add long-term value.''
CNRL reported product sales in the quarter of $12.13 billion, up from $7.02 billion in the first quarter of 2021.
Daily production, before royalties, averaged 1.28 million barrels of oil equivalent per day in the quarter, up from 1.25 million in the same quarter last year.
Adjusted net earnings from operations amounted to $2.86 per diluted share, up from $1.03 per diluted share in the first three months of 2021.
Analysts on average had expected an adjusted profit of $2.54 per share, according to financial markets data firm Refinitiv.
CNRL shares were trading at $80.81 on the Toronto Stock Exchange at midday Thursday, down $2.81 or 3.4 per cent.
This report by The Canadian Press was first published May 5, 2022.
CTVNews.ca Top Stories
Parents of infant who died in wrong-way crash on Ontario's Hwy. 401 were in same vehicle
Ontario’s Special Investigations Unit has released new details about a wrong-way collision in Whitby on Monday night that claimed the lives of four people.
Three Quebec men from same family father hundreds of children
Three men in Quebec from the same family have fathered more than 600 children.
B.C. mayor stripped of budget, barred from committees over Indigenous residential schools book
A British Columbia mayor has been censured by city council – stripping him of his travel and lobbying budgets and removing him from city committees – for allegedly distributing a book that questions the history of Indigenous residential schools in Canada.
OPP's mandatory alcohol screening during traffic stops 'not acceptable': CCLA
A spike in impaired driving-related collisions has caused Ontario’s provincial police to begin enforcing mandatory alcohol screening (MAS) at all traffic stops in the Greater Toronto Area -- a move one civil rights group says is ‘not acceptable.’
Maple Leafs down Bruins 2-1 to force Game 7
William Nylander scored twice and Joseph Woll made 22 saves as the Toronto Maple Leafs downed the Boston Bruins 2-1 on Thursday to force Game 7 in their first-round series.
Jurors in Trump hush money trial hear recording of pivotal call on plan to buy affair story
Jurors in the hush money trial of Donald Trump heard a recording Thursday of him discussing with his then-lawyer and personal fixer a plan to purchase the silence of a Playboy model who has said she had an affair with the former president.
Southern Alberta store broken into by burly black bear
Staff at a small southern Alberta office supply store were shocked to find someone had broken into the business last week, but they were even more confused when they discovered the culprit was a bear.
Captain sentenced to 4 years for criminal negligence in fiery deaths of 34 aboard scuba boat
A federal judge on Thursday sentenced a scuba dive boat captain to four years in custody and three years supervised release for criminal negligence after 34 people died in a fire aboard the vessel.
New scam targets Canada Carbon Rebate recipients
Fake text message and email campaigns trying to get money and information out of unsuspecting Canadian taxpayers have started circulating, just months after the federal government rebranded the carbon tax rebate the Canada Carbon Rebate.