Canadian Natural Resources Limited · TSX:CNQ
Canadian Natural Resources — Investor Presentation (September 2024)
74 slides from Canadian Natural Resources's investor presentation, September 2024
Slide 1: Corporate Presentation September 2024
CORPORATE PRESENTATION SEPTEMBER 2024
Slide 2: The Canadian Natural Advantage
The Canadian Natural Advantage Large, Low Risk, Lower Capital Diversified, Flexible Effective & High Value Reinvestment Balanced Capital Efficient Reserves Requirements Asset Base Allocation Operations PREMIUM VALUE CREATION MATERIAL FREE CASH FLOW GENERATION & STRONG RETURN ON CAPITAL 2
Slide 3: Corporate Overview: Strategy: Premium Value Creation
Corporate Overview Strategy: Premium Value Creation Driving material free cash flow & maximizing returns to shareholders • Strong Balance Sheet supporting investment grade credit ratings • Defined growth/value enhancement plans by product/basin and opportunistic acquisitions • Diverse, balanced asse
Slide 4: Balancing the Four Pillars
Canadian Natural Balancing the Four Pillars Disciplined capital allocation, focused on value creation Balance Sheet Strength Balance Sheet remains strong with Maximizing free cash flow generation Shareholder Value Returns to Shareholders Growing, sustainable dividends & Balance Returns to Resource O
Slide 5: Leading Total Proved & Proved Developed Reserves
Leading Total Proved & Proved Developed Reserves Canadian peers ~56% of reserves are high value SCO, light crude oil & NGLs ~33 year total proved Reserve Life Index(1) Peer average Largest crude oil reserves total proved & Largest natural gas Reserve Life Index reserves in Canada(2) ~17 years(3) Tot
Slide 6: Total Proved Reserves vs Global Peers
Total Proved Reserves Global peers Second largest reserves when compared to supermajors Only Canadian company with >5 billion BOE Total Proved 0 5,000 10,000 15,000 20,000 (MMBOE) Peers include: BP, COP, CVX, SHEL, TTE and XOM. Source: 2023 net proved reserves, based on SEC constant prices and costs
Slide 7: Typical Shale Well vs Oil Sands Mining & Upgrading
Typical Shale Well vs Oil Sands Mining & Upgrading Unique, Sustainable & Robust Typical Shale Well Oil Sands Mining & Upgrading High decline ~70% in year one No decline More reservoir risk No reservoir risk More reserve replacement risk No reserve replacement risk Shorter reserve life of ~10 year
Slide 8: Shale Well Example vs Oil Sands Mining & Upgrading
Shale Well Example vs Oil Sands Mining & Upgrading Annual capital required to maintain ~460,000 bbl/d Shale Well Example Oil Sands Mining & Upgrading • ~1,000 wells required initially No reservoir risk • ~400 wells required annually to maintain production Low maintenance capital requirements of
Slide 9: Canadian Natural's Assets are Unique
Canadian Natural’s Assets are Unique Robust through all cycles Long life low decline assets provide sustainable production & free cash flow even in lower price environment Ability to ramp up Exercising capital flexibility by production with reducing spend on low capital exposure assets improving pri
Slide 10: Low corporate decline rate lowers capital reinvestment
Canadian Natural’s Advantage Low corporate decline rate results in lower capital reinvestment requirements 2024B ~58% Production Mix(1) Long Life Low Decline production Oil Sands Mining & Upgrading ~11% Pelican & ~0% Decline Thermal Corporate ~13% Decline Decline Rate Conventional E&P ~19% Decline ~
Slide 11: Balanced, diverse asset portfolio
Canadian Natural Balanced, diverse asset portfolio 2024B North Sea Production Mix(1) North America 2.12 - 2.23 Bcf/d of natural gas Natural Gas ~27% 2nd largest natural gas producer in Canada Offshore Africa Heavy Oil ~28% 977 - 1,008 Mbbl/d of total liquids Light Oil & Largest crude oil • Vast, bal
Slide 12: Top Tier Conventional E&P, Thermal In Situ and Oil Sands Mining & Upgrading Assets
Top Tier Conventional E&P, Thermal In Situ and Oil Sands Mining & Upgrading Assets
Slide 13: Top tier plays throughout the asset base
Conventional E&P Top tier plays throughout the asset base Clearwater Marten Hills Clearwater Nipisi Frobisher Dual Leg Montney Gas (average) Top North American plays Deep Basin Hinton Canadian Natural has a significant Montney Dawson High Liquids SW Marcellus - Liquids Rich Deep Basin Resthaven NE M
Slide 14: Top tier WTI breakeven price: Thermal In Situ
Thermal In Situ Oil Sands Top tier WTI breakeven price (US$/bbl) $60 Effective & efficient operations support a low WTI breakeven price, delivering superior returns $50 Peer Average $40 $30 Canadian Peers Peers include: ATH, CVE, IMO, MEG and SU. Source: Peters & Co. North American Crude Oil Update;
Slide 15: World Class Oil Sands Mining Assets
World Class Oil Sands Mining Assets Top tier WTI breakeven price (US$/bbl) $70 Canadian Natural’s world class assets deliver top tier results on ~480,000 bbl/d of high value SCO capacity in 2023 $60 $50 Peer Average $40 Bitumen Bitumen $30 SCO SCO $20 SCO SCO $10 $0 Canadian Peers Peers include: IMO
Slide 16: Total development potential
Canadian Natural Total development potential Natural Gas Liquids (Bcf/d) (bbl/d) 4.5 3,000,000 4.0 2,500,000 3.5 3.0 2,000,000 Total corporate future growth potential of 2.5 1,500,000 ~1,900,000 BOE/d(1) 2.0 1.5 1,000,000 ~74% from long life low decline assets 1.0 500,000 0.5 0.0 0 2023 Natural Gas
Slide 17: Leading Free Cash Flow & Returns to Shareholders
Leading Free Cash Flow & Returns to Shareholders
Slide 18: Asset base drives long-term value: 2023
Canadian Natural Asset base drives long-term value: 2023 Low ~4% Increased production Leading Strong dividend twice, maintenance Share growth free cash flow balance sheet capital & totaling ~18% repurchases of generation of with year end disciplined ~7% ~$6.9 billion net debt at with total ~$3.3 bil
Slide 19: Free Cash Flow Allocation Policy
Canadian Natural Free Cash Flow Allocation Policy When net debt is ~$10 billion With net debt of Adjusted Funds Flow ~$9.9 billion Less: Total Capital (1) at year end 2023, Less: Dividends target to return Free Cash Flow 100% of free cash flow to shareholders 100% in 2024 Returns to Shareholders (1)
Slide 20: Significant direct returns to shareholders
2023 Free Cash Flow Allocation Significant direct returns to shareholders ($/share) $8 Direct returns to shareholders of ~$3.30 per share in 2023 via $6 Base Capital ~$1.78 per share of dividends & ~$1.52 per share of share repurchases $4 Dividends 3 year (1) returns to shareholders Share totaled ~$
Slide 21: Leading history of returns to shareholders growth
Canadian Natural Leading history of returns to shareholders growth ($ millions) 12,000 24 consecutive years of dividend increases 10,000 ~21% CAGR since inception Share Repurchases 8,000 6,000 Horizon Special Dividend 4,000 Phase 3 PSK complete distribution 2,000 Horizon Phase 1 build years 0 2008 2
Slide 22: Long-Term Dividend Growth vs. Global Peers
Long-Term Dividend Growth vs. Global Peers 10 year CAGR: 2024 (CAGR) Leading long-term dividend growth 20% Sustainable dividend; was maintained & increased in low commodity price periods while others cut 15% ~$1.42 per share of base dividends & an additional $0.75 per share special dividend pa
Slide 23: Free Cash Flow Sensitivity
Free Cash Flow Sensitivity Adjusted funds flow less capital Free cash flow ($/share) per share is (yield)(1) $10 ~40% higher at 16% Diverse, balanced asset base underpinned US$95 WTI vs. by long life low decline production US$80 WTI 12% Effective & efficient operations combined with execution excell
Slide 24: 2024 Budget
Canadian Natural 2024 Budget
Slide 25: 2024 Budget: Strategy
Canadian Natural 2024 Budget: Strategy Driving material free cash flow & maximizing returns to shareholders • Disciplined capital budget • Low maintenance capital • Top tier execution through flexible capital allocation • Defined growth/value enhancement plan ‒ Focused on returns on capital • Progre
Slide 26: 2024 Budget: Capital
2024 Budget Capital Capital Expenditures ($ millions)(1) 2024B Conventional E&P (excluding Thermal) $2,540 Thermal and Oil Sands Mining & Upgrading $2,880 Total $5,420 The Company’s diversified asset portfolio of short, mid and long cycle projects provides a key competitive advantage providing great
Slide 27: 2024 Budget: Production
2024 Budget Production Targeted Production(1) 2024B Natural Gas (MMcf/d) 2,120 - 2,230 Conventional E&P Crude Oil & NGLs (Mbbl/d) 253 - 265 Thermal and Oil Sands Mining & Upgrading (Mbbl/d) 724 - 743 Total Liquids (Mbbl/d) 977 - 1,008 Total (MBOE/d) 1,330 - 1,380 Our focus on returns to shareholders
Slide 28: Strategic Drilling Program
2024 Budget Strategic Drilling Program • Drilling program timed for incremental market egress • Heavy crude oil program primarily targeting Mannville/Clearwater multilaterals • Light crude oil and natural gas primarily targeting liquids-rich Montney • Flexibility to adjust second half activity depen
Slide 29: Conventional E&P Drilling Program
2024 Budget Conventional E&P Drilling Program (net producer wells) 2024B Natural Gas wells 91 Crude Oil wells ~65% of Primary Heavy 154 total net budgeted Pelican Lake 10 Conventional E&P wells are targeted to be Light 43 drilled in the International – second half of 2024 Total Crude Oil wells 207 T
Slide 30: Thermal In Situ Development Program
2024 Budget Thermal In Situ Development Program • Primrose ‒ Drilling two CSS pads targeted to come on production in Q2/25 Continuing with • Wolf Lake (Primrose) strong capital efficient drill to fill development program & ‒ Drilling one SAGD pad targeted to utilizing existing facility capacity come
Slide 31: Oil Sands Mining & Upgrading
2024 Budget Oil Sands Mining & Upgrading • Horizon ‒ Completed remaining components for the reliability enhancement project during turnaround in Q2/24 Increase capacity of SCO production by shifting planned turnarounds to once every two years from the current annual cycle Targets to increase ann
Slide 32: Production per share growth: 2019 - 2024B
Canadian Natural Production per share growth: 2019 - 2024B (BOE production/share) 0.52 0.48 ~7% CAGR per share 0.44 0.40 0.36 0.32 2019 2020 2021 2022 2023 2024B Targeting production growth of ~40 MBOE/d from 2023 exit to 2024B exit levels of ~1,455 MBOE/d, driving average targeted annual production
Slide 33: Environmental, Social & Governance
Environmental, Social & Governance
Slide 34: The World Needs More Canadian Energy
The World Needs More Canadian Energy Overview Canadian Natural is part of the solution • Canada is the top rated ESG country among the top crude oil exporting nations • Canada has world class CCUS infrastructure ‒ Canadian Natural is the largest owner of carbon capture capacity in Canada • Industry
Slide 35: ESG Performance Among Nations with Largest Crude Oil Reserves
ESG Performance Among Nations with Largest Crude Oil Reserves The world needs more Canadian energy (Aggregate ESG Score) 300 Environment (1) Social (2) 250 Governance (3) 200 Average 150 100 50 0 (1) 2024 Yale Environment Performance Index (EPI). (2) 2024 Social Progress Index (SPI) prepared by Soci
Slide 36: Technology & Innovation: Leading R&D investor
Technology & Innovation One of Canada’s leading R&D investors • Ongoing investment in technology and innovation will ensure the crude oil and natural gas remains sustainable, competitive and productive for years to come • Advancing innovation drives performance ~$502 million invested in technology,
Slide 37: Frontline driven incident prevention
Social Frontline driven incident prevention Total Recordable Injury Frequency (TRIF) Incidents (per 200,000 exposure hours)(1) Comprehensive frontline driven 0.30 safety management system 50% 98,020 Worksite Safety Observations in 2023 0.25 TRIF reduction since 2019 75% reduction in Lost Time Incide
Slide 38: Working together with communities
Social Working together with communities In 2023 Canadian Natural worked with ~221 Indigenous businesses Awarded ~$830 million in contracts with local Indigenous businesses, a 21% increase from 2022 ~$2.8 million donated to United Way through employee giving & corporate matching ($30+ million over 3
Slide 39: Risk assessment & mitigation
Governance Risk assessment & mitigation • Strong track record of identifying, assessing, adapting, aligning and executing • Board of Directors as well as Board Governance and Risk Committees ‒ Review and hold management accountable to identify and mitigate risks • Strong, effective strategies and pl
Slide 40: Technology & Innovation
Technology & Innovation Current Actions Medium-Term Actions Long-Term Actions • Carbon capture and storage • Leverage CCUS advancements • Expand/develop future ‒ Horizon’s CCUS and learnings into the next CCUS projects ‒ Quest CCS generation of CCUS facilities • Carbon capture and conversion ‒ North
Slide 41: Carbon Capture & Sequestration/Storage Technology
Carbon Capture & Sequestration/Storage Technology Canadian Natural today Capture Capacity (tonnes/year) A global leader in CO2 Horizon ~0.4 million capture & sequestration(1) Quest(2) ~1.1 million Reduced CO2 footprint Quest NWR(3) ~1.2 million Reduced CO2 charges Total ~2.7 million A portion of
Slide 42: Pathways Alliance: Proposed CO2 Transportation Line
Pathways Alliance Proposed CO2 Transportation Line Scope: • Pipeline system consists of 400+ km of a high pressure, 30” main transportation line, including the CO2 storage hub • Also, a number of laterals connect oil sands capture facilities to the transportation line INDUSTRY COLLABORATION 42
Slide 43: Balance Sheet Strength
Canadian Natural Balance Sheet Strength
Slide 44: Robust financial position
Canadian Natural Robust financial position Long-Term Ratings Outlook Short-Term Ratings DBRS A (low) Stable R-1 Standard & Poor’s BBB- Stable A-3 Moody’s Baa1 Stable P-2 • Balance Sheet strength as at June 30, 2024 • Net debt → ~$9.2 billion • Debt to book capitalization → ~19.0% • Debt to adjusted
Slide 45: Balanced credit facility profile
Canadian Natural Balanced credit facility profile Revolving Credit Facilities (C$ millions) June 2025(1) $2,425 Support from 14 banks diversified by location June 2027(1) $2,425 February 2025(1) $500 15+ year relationships with 12 banks Operating demand facility $100 Total $5,450 (1) Financial coven
Slide 46: Debt maturity profile
Canadian Natural Debt maturity profile ($ billions) 3.0 Repurchased ~$235 million of 2.5 bonds outstanding 2.0 1.5 1.0 0.5 0.0 US$ Public C$ Public Repurchased STRATEGICALLY BALANCED MATURITY PROFILE 46
Slide 47: Asset Overview
Canadian Natural Asset Overview
Slide 48: Conventional E&P Overview
Conventional E&P Overview ~593,000 BOE/d of production(1) Largest conventional E&P reserves in Canada ~5.8 billion BOE total proved plus probable, representing ~31% of 2P reserves(2) Significant infrastructure in place for Montney Pelican Lake & drill to fill strategy Clearwater • Natural Gas Bonnyv
Slide 49: Montney & Deep Basin Overview
Natural Gas, NGLs & Light Crude Oil: Montney & Deep Basin Overview Umbach West Nig ~1.5 million net acres of Montney rights Blair/Daiber ~1.8 million net acres of Deep Basin rights Graham Montney Significant high value drill to fill opportunities Stoddart Septimus ~4,000 premium locations(1) Gordond
Slide 50: Montney & Deep Basin: Infrastructure advantage
Natural Gas, NGLs & Light Crude Oil: Montney & Deep Basin Infrastructure advantage Umbach West Nig Significant high value drill to fill Blair/Daiber Montney growth opportunities Graham ~2.8 Bcf/d net facility design capacity Stoddart ~1.1 Bcf/d net available facility capacity Septimus Gordondale Gre
Slide 51: International Light Crude Oil Overview
International Light Crude Oil Overview ~26,100 bbl/d of light crude oil production(1) High return international light crude oil North Sea with exposure to Brent pricing • North Sea ‒ Leveraging expertise to manage costs in a mature basin ‒ Industry leading abandonment and decommissioning results • C
Slide 52: Heavy Crude Oil Overview
Heavy Crude Oil Overview Large land base ~3.2 million net acres Cliffdale ~1,570 defined multilateral locations(1) ~1,600 defined slant locations(1) High value drill to fill opportunities AB SK ~60,000 BOE/d available facility capacity Pelican Lake / Clearwater • Largest primary and polymer flood he
Slide 53: Total Conventional E&P development potential
Total Conventional E&P Near-, mid- & long-term development potential (MBOE/d) 1,200 1,000 Production of ~2.2 Bcf/d & ~260 Mbbl/d 800 in 2023 Potential to leverage 600 available facility capacity Liquids 400 Potential debottleneck & expansion opportunities ~190 MBOE/d 200 Natural Gas ~7,500 defined l
Slide 54: Thermal In Situ Oil Sands Asset overview
Thermal In Situ Oil Sands Asset overview Long life low decline assets producing ~262,000 bbl/d in 2023 Second largest total proved plus probable bitumen reserves in Canada with ~5.2 billion barrels, representing ~28% of 2P reserves(1) Facility capacity of ~340,000 bbl/d(2) with ~80,000 bbl/d of avai
Slide 55: Primrose / Wolf Lake overview
Thermal In Situ Oil Sands Primrose / Wolf Lake overview Total facility capacity ~140,000 bbl/d Leverage available facility capacity of ~55,000 bbl/d Primrose North ~307 net sections of undeveloped land Primrose East ~2,000 locations(1) Primrose South • Low cost, low risk and repeatable CSS pad devel
Slide 56: Kirby / Jackfish / Pike SAGD overview
Thermal In Situ Oil Sands Kirby / Jackfish / Pike SAGD overview Kirby Jackfish Total facility capacity of ~200,000 bbl/d(1) North Leverage available facility capacity of ~25,000 bbl/d Consolidated land base ~432 net sections of undeveloped land ~1,000 locations(2) • Acquired remaining 50% working in
Slide 57: Solvents: SAGD & CSS
Technology & Innovation Solvents: SAGD & CSS Co-injecting solvent with steam Results • Kirby South solvent SAGD pilot was a success to-date ̶ SOR reductions of ~45% ̶ Solvent recovery of ~85% Steam Assisted Gravity Drainage (SAGD) Current • Kirby North commercial scale solvent SAGD pad Progress deve
Slide 58: Thermal In Situ: Near- & mid-term growth potential
Thermal In Situ Oil Sands Near- & mid-term growth potential (bbl/d) Strong capital 400,000 efficiency ~$9,500/bbl/d 350,000 Thermal in situ production of ~262,000 bbl/d in 2023 300,000 Potential to leverage available capacity 250,000 to add ~80,000 bbl/d(1) of production ~3,000 locations 200,000 150
Slide 59: Thermal In Situ: Long-term growth potential
Thermal In Situ Oil Sands Long-term growth potential (bbl/d) 500,000 400,000 Solvents can potentially add more than ~185,000 bbl/d(1) of 300,000 incremental capacity Project expansions(2), when combined 200,000 with solvents, can potentially add an ~300,000 bbl/d(1) of incremental capacity 100,000 0
Slide 60: Oil Sands Mining & Upgrading Asset overview
Oil Sands Mining & Upgrading Asset overview Industry leading oil sands operator Net capacity of ~480,000 bbl/d of high value SCO CNQ Operating Oil Sands Mines No decline, reservoir risk or reserve replacement cost CNQ Lands Total proved plus probable reserves of ~7.5 billion barrels, representing ~4
Slide 61: Top tier utilization
Oil Sands Mining & Upgrading Top tier utilization (Utilization) 95% 90% 85% 80% 1 Year 2 Year Peer Average Peers Include: IMO Kearl, SU Base, SU Fort Hills and Syncrude. Source: TD research: Mine your own Business report – January 29, 2024, includes trailing data as of October 2023. SAFE, RELIABLE O
Slide 62: Operating cost reductions
Oil Sands Mining & Upgrading Operating cost reductions ($/bbl) $40 ~$13/bbl ~35% reduction reduction since in SCO operating costs $35 2014 (including energy costs) $30 Equates to a ~$2.1 billion $25 savings in annual operating costs in 2023 $20 $15 2014(1) 2014(1) 2023 2023 (C$) (US$) (C$) (US$) Cas
Slide 63: Increasing long-term SCO production
Horizon Oil Sands Increasing long-term SCO production • Naphtha Recovery Unit Tailings Treatment (NRUTT) Project ‒ Increases SCO production by ~6,300 bbl/d ‒ Capital cost: ~$350 million ~$48 million in 2024 budget ‒ Targeted to be operational in Q3/27 ‒ Future reclamation cost avoidance at Horizon
Slide 64: Long-term opportunity: In-Pit Extraction Process (IPEP)
Horizon Oil Sands Long-term opportunity: In-Pit Extraction Process (IPEP) IPEP is a relocatable, modular extraction plant that processes ore and separates bitumen in the mine pit. Results • IPEP pilot was a success and • Produced dry stackable tailings in the mine pit Progress • Front end engineerin
Slide 65: Long-term opportunity: Paraffinic Froth Treatment (PFT)
Horizon Oil Sands Long-term opportunity: Paraffinic Froth Treatment (PFT) • Potential project adds incremental production of ~195,000 bbl/d of bitumen • Engineering and design specification work underway ‒ IPEP opportunities combined with PFT to create additional capacity potential ‒ Utilize excess
Slide 66: Combine & leverage technology: IPEP & PFT
Horizon Oil Sands Combine & leverage technology for cost effective expansion: IPEP & PFT IPEP Combining IPEP with PFT technology targets to increase overall project returns through potential incremental production of ~195,000 bbl/d of bitumen PFT HIGH VALUE LONG-TERM PRODUCTION GROWTH POTENTIAL 66
Slide 67: Oil Sands Mining: development potential
Oil Sands Mining & Upgrading Near-, mid- & long-term development potential (bbl/d) ~1,285,000 bbl/d 750,000 IPEP Production of ~451,000 bbl/d in 2023 + 700,000 PFT Near-term opportunities add 650,000 ~20,000 bbl/d(1)(2) of SCO production capacity 600,000 Reliability Mid-term opportunities add Enhanc
Slide 68: Proven Effective Strategy
PROVEN EFFECTIVE STRATEGY
Slide 69: Advisory
Advisory Special Note Regarding Forward-Looking Statements Certain statements relating to Canadian Natural Resources Limited (the "Company") in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectively referred to herein as "forwar
Slide 70: Advisory
Advisory Special Note Regarding Common Share Split and Comparative Figures At the Company's Annual and Special Meeting held on May 2, 2024, shareholders passed a Special Resolution approving a two for one common share split effective for shareholders of record as of market close on June 3, 2024. On
Slide 71: Advisory: Non-GAAP and Other Financial Measures
Advisory Special Note Regarding Non-GAAP and Other Financial Measures (continued) Capital Efficiency Capital efficiency is a supplementary financial measure that represents the capital spent to add new or incremental production divided by the current rate of the new or incremental production. It is
Slide 72: 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. Thermal In Situ Oil Sands Overview – Clearwater, McMurray, Bluesky, Grand Rapids and Grosmon
Slide 73: Advisory: Pricing Assumptions and Glossary
Advisory Pricing Assumptions Glossary of Terms 2024B(1) 2023 AECO – Alberta Energy Company (benchmark pricing) Strip AOSP – Athabasca Oil Sands Project US$ WTI/bbl $ 75.42 $ 77.61 BOE – barrels of oil equivalent C$ AECO/GJ $ 2.448 $ 2.77 BBL – barrels of oil SCO Diff/(Prem) US$/bbl $ 0.70 $ (2.02) B
Slide 74: 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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