Canadian Natural opens profits taps
Wire services
First-quarter profit at Canadian Natural Resources jumped 170% as surging oil
prices more than made up for lower production, the company said.
Canadian Natural, which is expected to open the 110,000-barrel-per-day Horizon
oil sands project in August, earned C$727 million (US$715 million), or $1.35
a share, up from year-earlier C$269 million, or 50 Canadian cents a share.
Adjusted earnings from operations, excluding hedging costs and foreign
exchange losses, jumped 40% to C$872 million, or C$1.61 a share, from C$621
million, or C$1.15 a share.
The operating result handily beat the C$1.18 per share average profit forecast
by analysts polled by Reuters Estimates.
Canadian Natural's cash flow, an indicator of its ability to fund new
projects, rose 6% to C$1.7 billion, or C$3.19 a share, from C$1.6 billion,
or C$3.01 a share, in the first quarter of 2007.
Revenue was C$4 billion, up 27%.
Canadian Natural and its rivals have benefited from oil prices that averaged a
record $97.82 in the quarter, up more than two-thirds from the year before.
Crude has climbed even higher since, recently topping $124 a barrel.
The company has further benefited from a smaller discount for heavy-grade
crude, which accounts for much of its Canadian output, as well as strong
natural gas prices, it said.
Canadian Natural's oil and gas production fell 5% to 583,488 barrels of oil
equivalent per day.
It blamed the drop on the timing of injecting steam and polymers into northern
Alberta's oil sands and heavy crude reservoirs, and lower natural gas output
as the company shifted spending to higher-return oil projects.
Canadian Natural last year cut its gas exploration budget because of low
prices and worries that changes to the provincial royalty system in Alberta
would cut profits.
Despite a recent run-up in natural gas prices to 28-month highs, Steve Laut,
the company's chief operating officer, said Canadian Natural was not yet
ready to commit more funds to boosting natural gas output beyond the 1.54
billion cubic feet a day it averaged in the quarter.
Even with Canadian spot gas prices at a recent C$9.67 per gigajoule, up by a
third over last year, Laut said the rise was still not enough to spark more
drilling because of the increased government take in Alberta.
"We need prices probably north of C$12 before we start to get incentive to
drill more," Laut said at the company's annual meeting yesterday.
The company posted a loss of C$76 million from its hedging program in the
quarter, down from a loss of C$362 million in the year-prior period.
Canadian Natural shares jumped C$4.19, or nearly 5%, to C$96 on the Toronto
Stock Exchange yesterday, and they have gained more than a third so far this
year. The company released its results after the market closed.
09 May 2008 00:25 GMT
| last updated:
09 May 2008 00:25 GMT
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