Canadian Natural Resources Limited · TSX:CNQ
Canadian Natural Resources — Investor Presentation (December 2020)
51 slides from Canadian Natural Resources's investor presentation, Dec 9, 2020
Slide 1: Investor Presentation & 2021 Budget
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural 30 Years of Premium Value INVESTOR PRESENTATION & 2021 BUDGET December 9, 2020 Advisory Special Note Regarding Forward-Looking Statements Certain statements relating to Canadian Natural Resources Limited (the "C
Slide 2: Reporting Disclosures
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Reporting Disclosures Special Note Regarding non-GAAP Financial Measures This presentation includes references to financial measures commonly used in the crude oil and natural gas industry, such as: adjusted net earnings (loss)
Slide 3: Environmental, Social & Governance
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Environmental, Social & Governance The World Needs More Canadian Energy (Aggregate ESG Score) 300 Environment(1) Social(2) 250 Governance(3) 200 Average 150 100 50 0 (1) 2020 Yale Environment Protection Index (EPI). (2) 2020 Soc
Slide 4: The Strength of Canadian Natural's Business Model
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget The Strength of Canadian Natural’s Business Model • Leaders in ESG performance • Advantaged assets for downside scenarios • Leverage technology, innovation and continuous improvement ‒ Delivered game changing environmental perfo
Slide 5: Continuous Improvement in GHG Emissions
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Continuous Improvement in GHG Emissions North America E&P Methane Emissions (MtCO2e) 4.70 ~15% REDUCTION IN ABSOLUTE VENT 4.20 VOLUMES SINCE 2016 3.70 2016 2017 2018 2019 Note: Represents North America E&P methane emissions. STR
Slide 6: Leading Canadian Oil Sands Intensity
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Leading Canadian Oil Sands Intensity GHG Emissions Intensity (kgCO2/bbl) 80 70 60 ~35% LOWER THAN TOTAL PEER UPSTREAM SCOPE 1 AVERAGE 50 40 30 Total Peer Oil Sands Note: Represents Oil Sands emissions intensity in Canada (mining
Slide 7: Technology & Innovation: Journey to Net Zero
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Technology & Innovation Journey to Net Zero Near-Term Actions Medium-Term Actions Long-Term Actions • IPEP pilot • IPEP commercialization • Carbon capture and conversion (carbon fibers, asphalts, plastics) • Solvent EOR pilots •
Slide 8: Safety Performance and Governance
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Industry Leading Safety Performance (Per 200,000 Hours) 1.0 ~62% TRIF REDUCTION VS 2014 ~20% 0.5 TRIF REDUCTION VS 2018 ~30% TRIF REDUCTION FOR CONTRACTORS VS 2018 0.0 2014 2015 2016 2017 2018 2019 Total Recordable Injury Freque
Slide 9: Canadian Natural Advantage
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Advantage Our Strategy • Flexible capital allocation to maximize value • Strong Balance Sheet to support investment grade credit ratings • Defined growth/value enhancement plans by product/basin • Diverse, balan
Slide 10: Canadian Natural Advantages
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Advantages Large, Long Life Low Decline Asset Base Diversified Asset Base & Product Mix Flexible Capital Allocation / Effective & Efficient Operations Low Maintenance Capital Leading Free Cash Flow Generation SU
Slide 11: Robust Through All Cycles
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural’s Assets are Unique Robust Through All Cycles • Long life low decline assets provide sustainable production and free cash flow even in lower price environment • Ability to ramp up production faster with improvin
Slide 12: 2019 1P Reserve Valuations
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Oil Sands Companies 2019 1P Reserve Valuations ($ billion) $120 108 (Net Present Value 10% Btax) $100 Long Life, no decline SCO is majority of reserves $80 Minimizes heavy crude oil/bitumen price differential risk 84 66
Slide 13: Balanced, Diverse Portfolio
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Balanced, Diverse Portfolio • Balanced, diverse production mix North ‒ Long Life Low Decline production ~81% of liquids Sea North America • International Brent exposure • Vast, balanced resource base to develop • Light crude oil
Slide 14: Capital Discipline and Operational Excellence
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Capital Discipline • Balance and optimize the four pillars of capital allocation ‒ Flexible capital allocation maximizes shareholder value Maximizing • Maintain balance sheet strength Shareholder Value ‒ Maintain investment grad
Slide 15: Low Corporate Decline Rate
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Advantages Large, Long Life Low Decline Asset Base Diversified Asset Base & Product Mix Flexible Capital Allocation / Effective & Efficient Operations Low Maintenance Capital Leading Free Cash Flow Generation SU
Slide 16: 2020F Production Volume Growth/Decline
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget 2020F Production Volume Growth/Decline Production Growth (MBOE/d) 30 Industry leading maintenance capital 20 Majority of production from Long Life Low Decline assets 10 0 -10 -20 -30 -40 -50 -60 Peers Integrated Peers Peers incl
Slide 17: 2020F Free Cash Flow
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget 2020F Free Cash Flow (US$ million) $2,500 $2,000 Leading 2020F free cash flow generation $1,500 $1,000 $500 $- $(500) $(1,000) Peers Integrated Peers ~($4,900) Peers include: APA, COP, CVE, CVX, DVN, EOG, HSE, IMO, OVV, OXY, SU
Slide 18: 2021F Free Cash Flow Yield and Dividend Growth
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget 2021F Free Cash Flow Yield (%) 20% ~20% 18% 16% ~45% greater than peer average 14% ~14% 12% 10% Peers Average Peers include: APA, COP, CVE, CVX, DVN, EOG, HSE, IMO, OVV, OXY, SU and XOM. Source: Goldman Sachs Energy Comp – Novem
Slide 19: Canadian Natural Advantages Summary
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Advantages Summary • Significant, Long Life Low Decline asset base lowers risk profile ‒ Represents ~765,000 bbl/d or ~81% of total liquids production No decline, high value SCO production of ~455,000 bbl/d ‒
Slide 20: World Class Asset Overview: Conventional & Unconventional
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget World Class Asset Overview Conventional & Unconventional Darren Fichter, Chief Operating Officer, Exploration and Production 20
Slide 21: Natural Gas, Light Crude Oil & NGLs
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Natural Gas, Light Crude Oil & NGLs Natural Gas, Light Crude Oil & NGLs Core Area Summary • Large, Canadian, natural gas producer ‒ Q3/20 ~1,340 MMcf/d Q4/20F Over 1,600 MMcf/d ‒ 2P reserves 15.8 Tcf(1) • Significant light cru
Slide 22: Montney
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Natural Gas, Light Crude Oil & NGLs Montney Lean Gas (<10 bbl/MMcf) Liquids Rich Gas (10-100 bbl/MMcf) • Large inventory of defined drilling opportunities Light Oil • Large contiguous Montney land holdings BC AB ‒ ~1.2 million n
Slide 23: BC Montney Drilling & Completion Costs
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Natural Gas, Light Crude Oil & NGLs BC Montney Drilling & Completion Costs ($/metre) ($/tonne) $500 $950 $850 $450 $750 $400 $650 $350 $550 $450 $300 $350 $250 $250 2017 2020F 2017 2020F Drilling Performance Frac Performance CON
Slide 24: Infrastructure Advantage and LEGS
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Natural Gas, Light Crude Oil & NGLs Infrastructure Advantage • Extensive owned and controlled infrastructure Umbach ‒ Drives costs lower West Nig Townsend ‒ Strategic infrastructure proximal to liquids rich land base Graham • Lo
Slide 25: Natural Gas, Light Crude Oil & NGLs Summary
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Natural Gas, Light Crude Oil & NGLs Summary • Leveraging Canadian Natural’s competitive advantages ‒ Large, diverse, balanced asset base ‒ Owned and controlled infrastructure ‒ Flexible capital allocation ~2,500 defined location
Slide 26: Heavy Crude Oil Core Area Summary
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Heavy Crude Oil Core Area Summary ~500 km • Largest primary heavy crude oil producer Cliffdale in Canada Pelican Lake ‒ Q3/20 production ~71,000 bbl/d AB SK • Industry leading polymer flood at Pelican Lake Smith ‒ Q3/20 producti
Slide 27: Pelican Lake – Enhanced Oil Recovery Technology
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Heavy Crude Oil Pelican Lake – Enhanced Oil Recovery (EOR) Technology • Industry leading EOR technology • Long Life Low Decline asset • Industry leading heavy crude oil recovery ‒ Primary recovery ~6% ‒ Water flood after primary
Slide 28: Oil Sands
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Heavy Crude Oil Summary • Leveraging Canadian Natural’s competitive advantages ‒ Large, diverse, balanced asset base ‒ Owned and controlled infrastructure ‒ Flexible capital allocation ~3,000 defined locations* ‒ Effective and e
Slide 29: Thermal In Situ Oil Sands
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Thermal In Situ Oil Sands Thermal In Situ Oil Sands Asset Overview CNQ Thermal Producing Properties Birch Mtn. • Long Life Low Decline assets CNQ In Situ Project Inventory Peers ‒ 2P reserves 4.11 billion barrels(1) Ells River ‒
Slide 30: Primrose / Wolf Lake Overview
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Thermal In Situ Oil Sands Primrose / Wolf Lake Overview • Total facility capacity ~140,000 bbl/d ‒ Q3/20 production of ~95,600 bbl/d • Leverage annual unutilized facility capacity of ~60,000 bbl/d Primrose North Primrose East ‒
Slide 31: Solvents – Reducing GHG Emissions
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Technology & Innovation Solvents – Reducing GHG Emissions Through Steam Efficiencies • Co-injecting solvent with steam ‒ Kirby South is currently piloting solvent SAGD • Next steps: ‒ Primrose solvent pilot Targeted for second
Slide 32: Oil Sands Mining & Upgrading
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Oil Sands Mining & Upgrading Oil Sands Mining & Upgrading • Industry leading oil sands mine operator ‒ Net capacity ~475,000 bbl/d of SCO CNQ Operating Oil Sands Mines CNQ Lands • No decline, reservoir risk or reserve replacemen
Slide 33: Plant Capacity Utilization and Operating Costs
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Oil Sands Mining & Upgrading Plant Capacity Utilization (%) 100% 90% 80% 70% 1 year 2 year CNQ Peer Average Note: Sourced from TD research: Mine your own Business reports, includes trailing data as of July 2020. Peers Include: I
Slide 34: Horizon Mid-Term Opportunities and IPEP
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Horizon Oil Sands Mid-Term Opportunities • Opportunities provide incremental economic production ‒ Incremental 35,000 bbl/d - 45,000 bbl/d of SCO • Reliability improvements ‒ Diluent Recovery and Vacuum Distillate Units Potentia
Slide 35: 2021 Budget & Finance
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Oil Sands Mining & Upgrading Summary • Long Life, no decline assets ‒ ~475,000 bbl/d net capacity • Capturing synergies through technology and innovation ‒ Reliability and capacity increases ‒ In-Pit Extraction Process Targeting
Slide 36: Balancing the Four Pillars
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget 2021 Budget Balancing the Four Pillars • Balance Sheet Strength ‒ Balance Sheet strengthens with free cash flow generation Maximizing Shareholder Value • Returns to Shareholders ‒ Growing, sustainable dividends ‒ Potential for s
Slide 37: 2021 Execution Priorities and Budget
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural 2021 Execution Priorities • Disciplined 2021 capital budget of ~$3.2 billion focused on free cash flow generation ‒ Allocate to highest return projects and maximize value • Continue to strengthen the Balance She
Slide 38: Leading Operating Free Cash Flow
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Leading Operating Free Cash Flow – Conventional & Unconventional ($ million) $2,500 ~US$57 WTI ~US$39 WTI ~US$45 WTI $2,000 $1,500 $1,000 $500 $0 2019* 2020F* 2021B Operating Free Cash Flow *Excludes net acquisi
Slide 39: Operating and Corporate Free Cash Flow
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Leading Operating Free Cash Flow – Oil Sands Mining & Upgrading ($ million) $6,000 ~US$57 WTI ~US$39 WTI ~US$45 WTI $5,000 $4,000 $3,000 $2,000 $1,000 $0 2019 2020F 2021B Operating Free Cash Flow Note: See Advis
Slide 40: Increasing, Sustainable Returns to Shareholders
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Increasing, Sustainable Returns to Shareholders with Significant Upside Canadian Natural Returns to Shareholders • Disciplined allocation of capital delivers ($ million) 6,000 sustainable dividend policy ~$7.8 billion returned t
Slide 41: Dividend Growth
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Unique, Sustainable & Robust Dividend Growth • Only 9 out of TSX60 companies across all sectors in Canada have increased dividends for 20 or more consecutive years • Canadian Natural is the only crude oil and na
Slide 42: Returns to Shareholders – Dividends
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Returns to Shareholders – Dividends ($ million) $2,000 20 years of dividend increases Horizon Phase 3 $1,500 ~20% CAGR since inception complete $1,000 $500 Horizon Phase 1 build years $0 2006 2007 2008 2009 2010
Slide 43: Balance Sheet Strength
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Balance Sheet Strength Canadian Natural Robust Financial Position Long-Term Ratings Outlook Short-Term Ratings DBRS BBB High Negative R-2 Standard & Poor’s BBB Stable A-2 Moody’s Baa2 Stable P-2 • Balance Sheet strength as of Se
Slide 44: Balanced Credit Facility Profile
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Balanced Credit Facility Profile Revolving Credit Facilities (C$ million) Fully Drawn Term Credit Facilities(1) (C$ million) June 2022(1) $2,425 February 2022(2) $1,000 June 2023(1) $2,425 June 2022 $3,088 Opera
Slide 45: Finance Summary
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Finance Summary • Committed to Balance Sheet strength and strong investment grade credit ratings ‒ Absolute debt reduction ‒ Flexibility to manage through changing market conditions Flexible capital programs Optionality in m
Slide 46: Capital Discipline and Operational Excellence
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Capital Discipline • Balance and optimize the four pillars of capital allocation ‒ Flexible capital allocation maximizes shareholder value Maximizing • Maintain balance sheet strength Shareholder Value ‒ Maintain investment grad
Slide 47: Near- & Mid-Term Growth Potential and 2021 Budget Overview
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Canadian Natural Near- & Mid-Term Growth Potential 70,000 bbl/d - 80,000 bbl/d of liquids* Conventional & Unconventional 300 MMcf/d - 350 MMcf/d of natural gas Thermal In Situ Pad Additions 90,000 bbl/d - 100,000 bbl/d of bitume
Slide 48: Questions & Answers
Canadian Natural’s December 9, 2020 Investor Presentation & 2021 Budget Question & Answers PROVEN EFFECTIVE STRATEGY 48
Slide 49: Advisory: Cautionary Statement
Advisory Cautionary Statement Project progress and financial results are dependent upon economic and regulatory conditions, commodity prices, global economic factors, project sanction and capital allocation. Of the approximately 5,500 potential locations quoted in the Conventional and Unconventional
Slide 50: Advisory: Pricing Assumptions and Glossary
Advisory Pricing Assumptions December 9, 2020 December 9, 2020 2019 2020F 2021 Budget Strip US$ WTI/bbl $ 57.04 $ 39.19 $ 45.00 C$ AECO/GJ $ 1.54 $ 2.12 $ 2.50 SCO Diff/(Prem) US$/bbl $ 0.69 $ 3.16 $ 1.00 WCS Differential US$/bbl $ 12.79 $ 12.57 $ 12.82 FX 1.00 US$ = X C$ $ 1.3269 $ 1.3425 $ 1.3000
Slide 51: Advisory: Reserves Notes
Advisory Reserves Notes: 1. Company Gross reserves are working interest share before deduction of royalties and excluding any royalty interests. 2. Information in the reserves data tables may not add due to rounding. BOE values and oil and gas metrics may not calculate exactly due to rounding. 3. Fo
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