Canadian Natural Resources Limited · TSX:CNQ
Canadian Natural Resources — Investor Presentation (November 2003)
28 slides from Canadian Natural Resources's investor presentation, November 2003
Slide 1: Corporate Presentation
CNQ TSX / NYSE November 2003 Corporate Presentation The Premium Value, Defined Growth Independent
Slide 2: Delivering Value and Growth
Delivering Value and Growth SNAPSHOT (All production and reserve information shown before royalties) (1) Actual Q3/03 2003F 2002 Earnings (Cdn $ millions) 203 1,300 - 1,400 570 Per share - basic 1.51 9.75 – 10.45 4.46 - diluted 1.49 -- 4.31 Cash Flow (Cdn $ millions) 758 3,000 - 3,200 2,254 Per shar
Slide 3: Agenda
Corporate Presentation November 2003 Agenda • Who is Canadian Natural? • Why own Canadian Natural? • Company overview • Strategy • Operations • North America • North Sea • Offshore West Africa • Financials • Investment recap CNQ The Premium Value, TSX/NYSE Defined Growth Independent Who is Canadian
Slide 4: Who is Canadian Natural?
Corporate Presentation November 2003 Who is Canadian Natural? • Canadian based E&P company with international exposure • Canada • North Sea • Offshore West Africa • Significant exposure to North American natural gas Production mix (2003B) • Measured approach to growth North Sea Offshore West Africa
Slide 5: Reserve history; Why Own Canadian Natural?
Corporate Presentation November 2003 Who is Canadian Natural? • Consistent growth in Reserve History reserves over the last (mmboe gross proved, 6:1) decade through 1,600 1,496 • Exploitation 1,400 1,245 1,201 • Exploration 1,200 • Acquisitions 1,000 918 • 90% of reserves subject 800 605 to independ
Slide 6: Why Own Canadian Natural? Balanced Product Mix
Corporate Presentation November 2003 Why Own Canadian Natural? • Balanced product mix • Large independent producer • Significant exposure to North American natural gas • Low cost competitive advantage • Track record of value creation • Proven/committed management • Winning strategy - defined plan CN
Slide 7: Large Independent Producer; Significant Exposure to Natural Gas
Corporate Presentation November 2003 Large Independent Producer • Canadian Natural Net Production - Q2/03 ranks as the 7th (mmboe/d) largest independent 700 E&P company based 615 602 600 on total current 527 production 500 464 429 417 394 400 309 300 271 195 182 200 100 0 DVN ECA APC UCL APA BR CNQ
Slide 8: Natural Gas Exposure Defined; Low-cost Competitive Advantage
Corporate Presentation November 2003 Natural Gas Exposure Defined Q2 2003 Net N.A. Natural Gas Production (cubic feet per day per US $1,000 equity investment) 250 232 200 181 180 163 160 150 148 144 105 99 100 91 75 (US $1,000 investment divided by November 3, 2003 NYSE close price times Q2 2003 ave
Slide 9: Track Record of Value Creation; Shareholder Return
Corporate Presentation November 2003 Track Record of Value Creation • Share price CAGR of 20% Monthly Closing Share Price from 1992 to Oct 2003 (Cdn $) $70 • Market cap. increased from Cdn$1.6 billion in $60 1992 to Cdn$7.5 billion in GR $50 CA 2003 21% $40 • Current annual dividend of Cdn$0.60 $30
Slide 10: Committed Management
Corporate Presentation November 2003 Committed Management • Substantial Management and Directors Stock Ownership management and (US $ millions) director wealth at 300 $268 stake 250 • Strong motivation for management 200 to perform • Delivers alignment 150 with shareholder 100 $79 $75 $66 interests
Slide 11: Objectives Defined; Our Strategy
Corporate Presentation November 2003 Objectives Defined • Value creation on “per share” basis • Production • Reserves • Cash flow • Net asset value • Returns on employed capital • Before future tax • EBITDA CNQ Our Goal is 10% p.a. TSX/NYSE Rolling Average Value Growth Our Strategy • Capital allocat
Slide 12: Overview of Global Operations
Corporate Presentation November 2003 Company Overview: Operations Defined Plan CNQ The Premium Value, TSX/NYSE Defined Growth Independent Overview of Global Operations Canada Liquids Gas BOE % of Total 2003B Production (mboe/d) 175-185 208-214 385-399 84% 2002 Proved Reserves (mmboe) 665 508 1,173 7
Slide 13: North American Overview; Natural Gas Future Plan
Corporate Presentation November 2003 North American Overview • One of North America’s largest BC natural gas producers NE BC AB SK • >3 Tcf of proved natural gas reserves 380 mmcf/d N AB 8 mbbls/d 480 mmcf/d • ~1.3 bcf/d of production 136 mbbls/d • 5% growth p.a. after 2003 • 2 highly prospective re
Slide 14: Natural Gas Growth Prospects
Corporate Presentation November 2003 Natural Gas Growth Prospects Northwest Alberta BC AB SK • 1.4 million acres of net undeveloped land • 24 facilities/1,783 mi pipe • Average decline 25% • 800 expected future locations • New reserve potential • Northern Portion • 0.8 - 1.0 Tcf potential • Southern
Slide 15: North American Liquids Future Plan and Resource Base
Corporate Presentation November 2003 North American Liquids Future Plan • Near-Term • Primary heavy oil drilling • Pelican Lake emulsion/waterflood • High pressure steam at Primrose • Work to expand heavy oil markets • Mid/Long-Term • Primrose, Gregoire Lake, and Horizon in-situ projects CNQ TSX/NYS
Slide 16: Horizon Oil Sands Project Overview
Corporate Presentation November 2003 Horizon Oil Sands Project Overview • Reserves • 6 billion bbl recoverable oil (unbooked) • Production CNRL SHELL HORIZON • 2008 110,000 bbl/d SCO SYNCRUDE AURORA • 2010 155,000 bbl/d SCO SHELL MUSKEG SUNCOR • 2012 232,000 bbl/d SCO FIREBAG SYNCRUDE • ROCE 14% to
Slide 17: International Plan Defined; North Sea
Corporate Presentation November 2003 International Plan Defined • Near/Mid/Long-term - North Sea • Exploitation opportunities • Control core assets • Add value via cost reduction • Acquisition opportunities • Near/Mid/Long-term - Offshore West Africa • Continue Espoir development • Develop Baobab fo
Slide 18: Côte d'Ivoire; Angola
Corporate Presentation November 2003 Côte d’Ivoire • Espoir • Perforated upper-east reservoir Côte d’Ivoire • 5,000 bbl/d, net • Drilled Acajou in H1/03 CI-26 CI-102 WI 59% WI 72% • West Espoir potential Espoir • Baobab Acajou Baobab • Estimated 200 mmbbls recoverable CI-400 WI 90% Canadian Natural
Slide 19: Company Overview: Financials; Creating Underlying Value
Corporate Presentation November 2003 Company Overview: Financials CNQ The Premium Value, TSX/NYSE Defined Growth Independent A History of Value Creation Reserves per share (boe) 16 14 12 AGR 21% C 10 8 6 4 2 Includes probable reserve value as described in Annual 0 Report. 1995 1996 1997 1998 1999 20
Slide 20: A History of Value Creation
Corporate Presentation November 2003 A History of Value Creation Daily Production per 1,000 shares (boe/d) 4.0 3.5 3.0 R CAG 2.5 19 % 2.0 1.5 1.0 0.5 0.0 1995 1996 1997 1998 1999 2000 2001 2002 Gas Oil CNQ TSX/NYSE Consistent Production Growth A History of Value Creation Cash Flow per share $24 $20
Slide 21: NAV per share; Guidance
Corporate Presentation November 2003 A History of Value Creation Pretax Net Asset Value per share $100 $80 R CAG 23 % $60 $40 $20 Based upon PV10 pretax reserve value $0 including 50% of probable reserve value as described in Annual Report. Undeveloped 1995 1996 1997 1998 1999 2000 2001 2002 land is
Slide 22: Nine Month Highlights; Sensitivity Analysis
Corporate Presentation November 2003 Nine Month Highlights Nine Months Ended Sept 30, 2003 2002 Daily production Crude oil and natural gas liquids (bbl) 241.8 206.8 Natural gas (mmcf) 1,308 1,188 Net earnings ($MM) 1,156 361 Per share 8.61 2.87 Cash flow ($MM) 2,426 1,477 Per share 18.06 11.73 Debt/
Slide 23: Major Oil and Natural Gas Hedge Summary
Corporate Presentation November 2003 Major Oil Hedge Summary Q4/03 Q1/04 Q2/04 Q3/04 Oil collars (US $ - WTI) Volume (mbbl/d) 125.0 125.0 90.0 30.0 Avg. floor price (US $/bbl) 25.56 25.24 24.67 24.50 Avg. ceiling price (US $/bbl) 31.37 30.86 29.53 29.78 CNQ Protection from Downside for Base Producti
Slide 24: Financial Strength; Low Risk Profile
Corporate Presentation November 2003 Financial Strength • Strong debt ratings (Baa1, BBB+, BBB(high)) • History of balance sheet management • Ratio objectives • Debt to EBITDA (1.0-1.5x) • Debt to Capitalization (40-45%) • Return on Capital Employed (10%+) • Exploitation of recent acquisitions will
Slide 25: Investment Recap; Forward-Looking Statements
Corporate Presentation November 2003 Investment Recap • Balanced product mix • Large independent producer • Significant exposure to North American natural gas • Near/mid/long term growth prospects • Low cost competitive advantage • Track record of value creation • Committed management CNQ The Premiu
Slide 26: Key Historic Data
Key Historic Data 1998 1999 2000 2001 2002 9M 2003 Operational Information Daily Production, before royalties Crude oil and NGLs (mbbl/d) 76 87 174 206 215 241.8 Natural gas (mmcf/d) 673 721 794 918 1,232 1,308 Barrels of oil equivalent (mboe/d) 188 207 306 359 421 460 Daily Production, after royalt
Slide 27: Corporate Guidance
Corporate Guidance November 5, 2003 Fourth Quarter 2003 2003 Forecast 2004 Budget Daily Production Volumes, before royalties Natural Gas (mmcf/d) North America 1,205 - 1,220 1,245 - 1,248 1,290 - 1,350 North Sea 40 - 45 42 - 43 25 - 35 Offshore West Africa 10 - 15 8 - 9 5 - 10 1,255 - 1,280 1,295 -
Slide 28: Contact Information
CONTACT INFORMATION Allan P. Markin John G. Langille Steve W. Laut Chairman President Chief Operating Officer Corey B. Bieber Director, Investor Relations (403) 517-6878 Laura Campbell Investor Relations Analyst (403) 514-7911 CANADIAN NATURAL RESOURCES LIMITED 2500, 855 - 2nd Street S.W., Calgary,
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