Commenting on the firm’s 2018 budget, Steve Laut, the President of Canadian Natural Resources Limited (NYSE:CNQ) expressed that company’s movement to a long-life low decline asset resource is complete, as the Horizon Phase III expansion has been executed. The firm’s strength is exhibited in the 2018 budget as they target overall production between 1.09 million and 1.170 million BOE/d.
This exhibits a 17% jump over production levels of 2017 with a capital program intended at $4.3 billion, as compared to $4.8 billion in 2017, discounting the acquisition capital of Athabasca Oil Sands Project. This enables the significant capital flexibility to assign capital to the highest return plans and to enhance shareholder value. Free cash flow is expected to be in the range of $2.3 billion to $2.7 billion, after the firm’s current dividend.
Tim McKay, the Chief Operating Officer of Canadian Natural, added that their focus will be on reliability across their diverse asset base and persist to integrate and enhance the assets bought in 2017. Modest drilling plans will ensure cost control, which is required in this commodity price setting. Project advancement at their Steam Assisted Gravity Drainage assignment, Kirby North will continue in next year as they take the project for completion in Q4 2019.
Corey Bieber, the Chief Financial Officer of Canadian Natural, stated that in 2018, the firm targets to strengthen its balance sheet metrics with improving free cash flow. Significant capital flexibility and ample liquidity in 2018 will enable the firm to effectively manage their financial position in an unstable commodity price environment.
Canadian Natural’s capital budget for next year is targeted at around $4.3 billion. It targets to deliver production growth of around 17% at the midpoint of budget projection of 2018 with targeted maintenance capital at around $3 billion, showcasing the advantage of a long-life low decline asset base.