Commenting on the Company’s 2019 budget, Steve Laut, Executive Vice-Chairman of Canadian Natural stated, 
“Canadian Natural’s large, diverse, balanced and flexible asset base provides a unique opportunity for the Company to allocate capital to the highest return projects to maximize shareholder value. Canadian Natural’s robust, long life low decline assets allow us to target for the foreseeable future, a long-term production per share growth rate of 7% to 8% with a normalized capital program in the $4.7 billion to $5.0 billion range.

Canadian Natural's asset base is unique compared to a typical Exploration and Production company. The mix of long life low decline assets provides a stable base of production that generates free cash flow in low commodity price environments and the net present value of these long life assets is not materially impacted by periods of low commodity prices. Our production mix is complemented by low capital exposure assets, which provide the Company flexibility to allocate capital or not, depending on market conditions. Canadian Natural's asset base, coupled with our effective and efficient operations, drives our ability to create value in all cycles.

Currently, the lack of market access and a dysfunctional pipeline nomination process are creating industry challenges, as a result, the Company is targeting a 2019 base capital program of $3.7 billion, approximately $1.0 billion less than our normalized capital program. The 2019 base capital program includes approximately $3.1 billion of sustaining capital to keep production flat and approximately $600 million towards long-term growth projects, demonstrating our capital flexibility.

The curtailment program recently announced by the Government of Alberta has resulted in the January index prices for crude oil to strengthen significantly. Canadian Natural will monitor the impact over time of curtailment on prices as well as the progress of the two export pipelines (Keystone XL and Trans Mountain Expansion) in the final stages of approval. Dependent on the outcome of these two factors, Canadian Natural has the capability to adjust our 2019 capital spending budget closer to normalized levels.”

Canadian Natural’s President, Tim McKay, added, 
“The Company will continue to focus on its defined growth and value enhancement plan by product and basin, and managing time lines of development. Safe, reliable, effective and efficient operations will continue to be a focus for the Company, as cost control and reliability across all assets will maximize value for shareholders in 2019. Completion at our Kirby North Steam Assisted Gravity Drainage ("SAGD") project is targeted for Q3/19, when facility commissioning and steam circulation will begin, followed by targeted first oil in Q4/19. The Kirby North SAGD project will ramp up throughout 2020 with targeted production capability of 40,000 bbl/d in the first half of 2021. Additionally, highly economic pad additions drilled at Primrose in 2018 will be brought on production later in 2019 and are targeted to add approximately 26,000 bbl/d in their first 12 months of production. Production volumes from both thermal projects are strategically targeted to align with improved market access.”

Canadian Natural’s Chief Financial Officer, Corey Bieber, continued, 
“In 2019, our commitment to maintaining a strong financial position is supported by a highly flexible and disciplined capital program, ample liquidity, and effective and efficient operations. In accordance with Canadian Natural's free cash flow allocation policy, the Company will target to allocate its free cash flow equally between share purchases and strengthening the balance sheet. Our financial strength gives us the flexibility to deliver on our plan and continue to drive long-term shareholder value creation through commodity price cycles. The flexibility of our 2019 budget is a very good example of how the Company can be nimble in response to a volatile commodity market."

HIGHLIGHTS OF THE 2019 BASE BUDGET

• Canadian Natural’s 2019 base capital budget is targeted to be approximately $3.7 billion, approximately $1.0 billion less than the 2018 forecast as the Company demonstrates its ability to exercise capital flexibility. The Company targets maintenance capital at approximately $3.1 billion, demonstrating a key benefit of a long life low decline asset base.
• If pricing differentials and market access improve throughout 2019, the Company has the flexibility to invest additional capital up to approximately $700 million in 2019, which will add production in 2020 and beyond.
• Overall, production in 2019 is targeted to be between 1,030,000 BOE/d and 1,119,000 BOE/d, with a product mix of approximately 76% crude oil and NGLs and 24% natural gas.
• Light crude oil, NGLs and Synthetic Crude Oil ("SCO") production in 2019 is targeted to be approximately 53% of total corporate BOE production.
• Overall, 2019 crude oil and NGL production is targeted to be in line with 2018 levels, ranging from 782,000 bbl/d to 861,000 bbl/d.
• Liquids production mix is targeted to be approximately 74% from long life low decline assets and approximately 26% from low capital exposure assets.
• The drilling program in the 2019 base budget is targeted to be modest and demonstrates Canadian Natural's ability to be flexible and disciplined, as the Company strategically manages through the commodity price cycle and current temporary market access challenges. The 2019 drilling program in the base budget is targeting 97 net producer wells, a decrease of 419 wells from 2018 targeted levels. 

North America – Exploration & Production

North America crude oil and NGL production provides significant capital flexibility as the Company’s large asset base encompasses light crude oil, primary heavy crude oil and Pelican Lake heavy crude oil. The Company’s strong asset base is complemented by an extensive network of owned and operated infrastructure and is supported by a deep inventory of low capital exposure, high return on capital projects that can deliver significant production and value growth opportunities, provided adequate market access is available. 

The Company is targeting a base capital program of $1,140 million for North American E&P in 2019, $415 million lower than 2018 targeted levels. Plans for 2019 are summarized as follows:

• North American crude oil and NGL production is targeted to range from 221,000 bbl/d to 241,000 bbl/d, representing a 4% decrease from targeted 2018 production levels.
• Canadian Natural targets to drill approximately 29 net producer wells in its base budget, a 70% decrease from 2018 forecast levels, in its North America light crude oil operations, a significant part of the Company’s balanced portfolio. The Company is targeting high value, drill to fill light crude oil wells, leveraging infrastructure and setting the Company up for future growth potential.
• The Company continues to target strong capital efficiencies and high returns with a disciplined primary heavy crude oil base drilling program of 58 net producer wells, a 77% decrease compared to 2018 targeted levels. The 2019 primary heavy crude oil drilling program is strategically targeting wells in areas that have potential to add significant growth in 2020 and beyond when commodity prices and market access improve.
• At Pelican Lake, Canadian Natural will continue to optimize operations, including polymer flood optimization and targeted facility consolidation.
• Corporate natural gas production is targeted to range from 1,485 MMcf/d to 1,545 MMcf/d, a decrease of 2% from 2018 levels.
• The Company targets a small natural gas base drilling program of 5 net producer wells representing a decrease of 10 net producer wells compared to 2018 targeted levels. The Company targets to continue its focused drill to fill strategy in its high value, liquids rich Septimus property, where the Company owns and operates significant infrastructure.

North America - Thermal in Situ Oil Sands

• Thermal in situ oil sands assets provide a substantial, low risk production profile that can generate long-term, significant and sustainable free cash flow.
• Thermal in situ production is targeted to range from 104,000 bbl/d to 124,000 bbl/d in 2019, an increase of 7% from 2018 targeted levels.
• Total thermal in situ base capital in 2019 is targeted to be $545 million, as the Company targets to bring on stream high value pad additions drilled at Primrose in 2018. Additionally, the Company targets to complete the Kirby North Steam Assisted Gravity Drainage (“SAGD”) project in Q3/19.
• In 2019, production from the 2018 Primrose pad add drilling program is targeted to come on stream in Q4/19, on budget and ahead of schedule, utilizing spare facility capacity and strategically timed to add production volumes in line with targeted improved market access.
• In 2019, Canadian Natural targets to complete its Kirby North SAGD project, which is on budget and ahead of schedule, reflecting the Company's effective and efficient operations. The Company targets to commission facilities in Q3/19 with first production targeted in Q4/19, one quarter earlier than originally planned.
• Overall targeted production capacity at Kirby North is 40,000 bbl/d.

North America – Oil Sands Mining and Upgrading

• Oil Sands Mining and Upgrading production is targeted to increase by 2% in 2019 when compared to 2018 targeted levels. The 2019 production guidance range for Oil Sands Mining and Upgrading is 415,000 bbl/d to 450,000 bbl/d of SCO.
• The 2019 targeted production range includes spring maintenance activities and a 28 day planned turnaround later in the year at the Horizon operations, and planned pit stops at the AOSP in the spring and fall of 2019.
• 2019 Oil Sands Mining and Upgrading targeted base capital includes approximately $505 million for strategic, project development, environmental and technology.
• Base sustaining capital is targeted to be $780 million, while $240 million is targeted for turnarounds, reclamation and other activities.

International – Exploration & Production

• International light crude oil production is targeted to range from 42,000 bbl/d to 46,000 bbl/d, a 2% increase over 2018 targeted production levels, reflecting the Company's drilling program in the North Sea and Cȏte d’Ivoire in 2019.
• 2019 base capital at the Company’s International assets is targeted to be $50 million greater than 2018 forecast levels at approximately $460 million, which includes approximately $45 million for decommissioning activities.
• In 2019, the Company's base budget targets to drill 3.9 net producer wells in the North Sea and 0.6 net producer wells at Baobab in Cȏte d’Ivoire.

Canadian Natural's projects in Cȏte d’Ivoire deliver some of the highest returns in the Company's portfolio and future development plans are as follows:

• At Espoir, the Company targets to commence Phase 4 development in late 2019 with initial production targeted to come on stream in early 2020.
• In Q2/19, Canadian Natural targets to drill an exploration well at Kossipo and if successful, will lead to development drilling with a pipeline tied-back to the Floating Production Storage and Offloading vessel at Baobab, adding significant future value with potential gross production capability of 20,000 bbl/d targeted in 2022.

PRODUCTION AND CAPITAL GUIDANCE

Canadian Natural continues its strategy of maintaining a large diverse portfolio of assets. This enables the Company to maximize shareholder returns through flexible capital allocation. Annual budgets are developed and scrutinized throughout the year and changed if necessary in the context of project returns, product pricing expectations, and the balancing of project risks and time horizons. Canadian Natural maintains a high ownership level and operatorship in its properties and can therefore control the nature, timing and extent of expenditures in each of its project areas.

The forecast capital expenditures for 2018 and the 2019 Budget guidance are as follows:

In the event that pricing differentials improve and the Company has greater clarity around market access, additional capital could potentially be invested.

The above capital expenditures for the 2018 forecast and the 2019 base budget incorporate the following levels of drilling activity: