Canadian Natural Resources Limited Announces 2023 Fourth Quarter and Year End Results
Press Release
EBRUARY 29, 2024
Highlighting a successful 2023, Canadian Natural’s Chief Financial Officer, Mark Stainthorpe, stated “Through the Company’s effective and efficient operations and disciplined capital allocation, we achieved our net debt level of $10 billion in Q4/23, earlier than previously forecasted. As per our free cash flow allocation policy, we will now target to return 100% of free cash flow to shareholders through dividends and share buybacks.”
Canadian Natural’s Vice Chairman, Tim McKay, also commented “In 2023, we delivered on our capital allocation strategy by strengthening our balance sheet, providing significant returns to shareholders and strategically developing our assets. We achieved record annual production while growing our reserves organically on both a total proved and total proved plus probable basis, with reserve replacement ratios of 166% and 194% respectively.
Our strong execution in 2023 sets us up to continue delivering on our four pillars of capital allocation through our disciplined 2024 capital budget of approximately $5.4 billion. This budget is strategically weighted to longer cycle thermal development in the first half of 2024 and shorter cycle growth in the second half of the year, targeting strong exit production levels. As well it provides us with the flexibility to adjust to changing market egress and evolving market conditions, ensuring we are allocating capital effectively and maximizing value for our shareholders.
We are committed to supporting Canada’s and Alberta’s climate goals and continue to reduce our environmental footprint with our robust environmental targets, including net zero greenhouse gas (“GHG”) emissions in the oil sands by 2050. We are uniquely positioned with diverse, long life low decline assets which are ideal to apply technologies, to reduce GHG emissions and provide industry leading environmental performance. It is important to continue working together with the Canadian and the Alberta governments to make the Pathways Alliance a transformative industry collaboration and achieve meaningful GHG reductions in Canada. We believe Canadian energy is one of the most responsibly produced sources of energy in the world and should be the preferred energy choice.”
Canadian Natural’s President, Scott Stauth, also commented “The Company delivered strong operational results in 2023 and achieved multiple production records, including record annual average total production of approximately 1,332 MBOE/d, representing 7% production per share growth as a result of safe, effective and efficient operations and significant share repurchases. We also achieved record quarterly average total production of approximately 1,419 MBOE/d in Q4/23. With our focus on continuous improvement and process optimization, we had high reliability and utilization at our oil sands mining operations, achieving record synthetic crude oil (“SCO”) production of approximately 500 Mbbl/d in Q4/23.
One of Canadian Natural’s advantages is our significant reserves base, with total proved reserves of 13.9 billion BOE and total proved plus probable reserves of 18.5 billion BOE as of year end 2023, which increased 2% and 3% respectively from year end 2022. The increase in our reserves reflects the success of our capital efficient development opportunities across our asset base. With approximately 75% of the Company’s total proved reserves being long life low decline, the strength and depth of our assets is evident and provides us with a total proved reserves life index of 32 years and a total proved plus probable reserves life index of 43 years.”
Mark Stainthorpe also added “In 2023, we successfully executed on our capital program and remained focused on cost control in an inflationary environment. We delivered strong financial results in 2023, including net earnings of approximately $8.2 billion and adjusted funds flow of $15.3 billion, which drove significant returns to shareholders totaling $7.2 billion.
In the past three years, we have reduced our net debt by over $11 billion and delivered approximately $21.5 billion directly to shareholders through $11.0 billion in dividends and $10.5 billion in share repurchases. These impressive results delivered returns to shareholders of approximately $30 per share through debt reductions and shareholder distributions over the three year time period.
Subsequent to quarter end, the Board of Directors approved a 5% increase to our quarterly dividend to $1.05 per common share, up from the previous dividend level of $1.00 per common share, payable on April 5, 2024 to shareholders of record on March 15, 2024. This demonstrates the confidence that the Board has in the sustainability of our business model, our strong balance sheet and the strength of our diverse, long life low decline reserves and asset base. With this increase announced today, we have increased our quarterly dividend 24% through three separate increases over the past year. This year marks the 24th consecutive year of dividend increases, with a compound annual growth rate (“CAGR”) of 21% over that time.
In addition, our Board of Directors approved a resolution to subdivide the Company’s common shares on a two for one basis, subject to shareholder approval and having obtained all regulatory approvals, including TSX approval. The proposal will be voted on at the Company’s Annual and Special Meeting of Shareholders to be held on May 2, 2024. With our disciplined 2024 capital budget, low maintenance capital requirements and a long life low decline asset base, we target to deliver strong returns on capital with robust free cash flow while continuing to provide significant returns to shareholders in 2024.”
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