Canadian Natural Resources today announced second quarter 2020 financial and operating results.

Commenting on the Company's second quarter 2020 results, Tim McKay, President of Canadian Natural, stated,
"Canadian Natural is in a strong position as a result of our capital flexibility and continued focus on cost control, which maximizes margins in a volatile commodity price environment. The effectiveness of our strategies and our ability to execute on those strategies allows us to react quickly to changing markets and commodity price volatility.

In Q2/20, we delivered top tier operational results, producing approximately 1,165 MBOE/d, including liquids production of approximately 922 Mbbl/d, as our teams worked effectively to bring the majority of the voluntary curtailed volumes back on production in June 2020. Importantly, in our Oil Sands Mining and Upgrading assets, we achieved record quarterly production of high value Synthetic Crude Oil ("SCO") of approximately 464,300 bbl/d, inclusive of planned maintenance at Horizon in May. As well, we achieved record low Oil Sands Mining and Upgrading operating costs of $17.74/bbl (US$12.80/bbl) in Q2/20, a 15% decrease from Q1/20 levels, by continuing to focus on cost control.

In response to COVID-19, the Company implemented comprehensive precautions to ensure the health and safety of our workers while maintaining safe, reliable operations. We continue to focus on our environmental, social and governance ("ESG") performance throughout this volatility. ESG performance remains a top priority within the Company and there has been no change to our environmental targets set in December 2019, nor our environmental focused investments, which help reduce our environmental footprint and our GHG emissions, despite the economic impacts of COVID-19."

Canadian Natural's Chief Financial Officer, Mark Stainthorpe, added 
"The Company maintains a flexible and disciplined capital allocation strategy, with a focus on maintaining a strong financial position throughout the commodity price cycle. We have been proactive in managing our balance sheet and executing on our capital flexibility, with our targeted 2020 capital program on track at approximately $2.7 billion, while maintaining strong production levels throughout the year.

We generated adjusted funds flow of $415 million in Q2/20, reflecting the strength of the Company's long life low decline asset base, effective and efficient operations and our ability to maximize netbacks. Maximizing value for our shareholders, the Company elected to store as inventory at quarter end, a higher portion than normal of our SCO and International light crude oil production in the low commodity price quarter. If these barrels had been sold during the second quarter of 2020, based on June 2020 commodity prices, the Company would have generated approximately $60 million in additional cash flows from operating activities and adjusted funds flow in the quarter.

Our long life low decline assets continue to have industry leading low breakeven prices required to cover our low sustaining capital requirements and our current dividend, of approximately US$30 to US$31 WTI per barrel, reflecting our effective and efficient operations and our low to no reservoir risk, a distinct advantage in a volatile price environment. As a result, a small percentage of our total proved reserves are produced during challenging commodity price periods, resulting in very little impact to the Company's net asset value, thereby preserving long-term value for our shareholders and creditors.

At June 30, 2020, liquidity was strong at approximately $4.1 billion. As previously announced, in June we successfully completed the issue of two US dollar denominated bonds raising approximately $1.5 billion (US$1.1 billion). The Company's balance sheet remains resilient through this commodity price cycle, supported by strong investment grade credit ratings. In the second half of 2020, targeted free cash flow generation is significant, supporting a sustainable dividend and at current strip pricing targeted net debt at year end December 31, 2020 to be flat year-over-year."

KeyFacts Energy: Canadian Natural Resources Canada country profile