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Canadian Natural Resources Limited CNQ reported fourth-quarter 2020 adjusted earnings per share of 12 cents, beating the Zacks Consensus Estimate of 4 cents, attributable to increased production from North America, lower costs and higher natural gas price realizations. However, the bottom line fell from the year-ago figure of 44 cents per share. The year-over-year underperformance was due to weak crude oil and natural gas liquids (NGLs) price realizations.
Total revenues of $3.85 billion surpassed the Zacks Consensus Estimate of $3.83 billion. However, the top line declined from $4.47 billion reported a year ago.
During the quarter under review, the company, which is committed to adding shareholder value, returned C$502 million via dividends.
Canadian Natural declared a quarterly dividend of 47 Canadian cents a share, payable Apr 5, 2021 to its shareholders on record as of Mar 19, 2021.
Production & Prices
Canadian Natural reported quarterly production of 1,201,198 barrels of oil equivalent per day (BOE/d), up 3.9% from the prior-year quarter. Oil and NGLs output (accounting for more than 77.2% of total volumes) increased to 927,190 barrels per day (Bbl/d) from 913,782 Bbl/d a year ago. Crude oil and NGLs production from operations in North America including synthetic crude oil production of 417,089 Bbl/d and bitumen output of 266,179 Bbl/d totaled 683,268 Bbl/d, comparing favorably with the year-ago quarter’s 617,243 Bbl/d owing to a continued focus on effective and efficient operations.
Natural gas volumes recorded a 13% year-over-year rise from 1,455 million cubic feet per day (MMcf/d) to 1,644 MMcf/d in the quarter. Production in North America summed 1,623 MMcf/d compared with 1,411 MMcf/d in the prior year.
Canadian Natural’s realized natural gas price increased 11.4% to C$2.94 per thousand cubic feet from the year-ago level of C$2.64. However, realized oil and NGLs price plummeted 18.2% to C$40.56 per barrel from C$49.6 in the fourth quarter of 2019.
Canadian Natural Resources Limited Price, Consensus and EPS Surprise
Canadian Natural Resources Limited price-consensus-eps-surprise-chart | Canadian Natural Resources Limited Quote
Costs & Capital Expenditure
Total expenses incurred in the quarter were C$4,259 million, lower than C$5,079 million recorded a year ago. Decline in transportation costs and production expenses, along with higher foreign exchange gain, reduced the overall costs. Meanwhile, Canadian Natural’s Oil Sands Mining and Upgrading operating expenses decreased 19% year over year to C$20.20 per barrel.
In the reported quarter, capital expenditure (including net acquisition costs) totaled C$1,176 million.
As of Dec 31, the company had C$184 million in cash and cash equivalents, and a long-term debt of C$20,110 million, representing total debt to total capital of 38.3%.
Further, the company generated free cash flow of C$694 in the fourth quarter.
Canadian Natural’s 2021 free cash flow is expected to be robust at $4.9-$5.4 billion, after spending capital expenses and increased dividend levels.
The company's 2021 capex is estimated around $3.2 billion, indicating a targeted production range of 1,190-1,260 MBOE/d, up 5% at the mid-point from the prior-year levels.
Zacks Rank & Key Picks
Canadian Natural has a Zacks Rank #4 (Sell), currently. Some better-ranked players in the energy space are Matador Resources Company MTDR, Diamondback Energy, Inc. FANG and Denbury Inc. DEN, each presently flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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