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Teachers lowers stake in Canadian Natural Resources

Samantha Nielson

Teachers pension fund: Main position trades in 4Q14 (Part 10 of 11)

(Continued from Part 9)

Teachers and Canadian Natural Resources

The Ontario Teachers’ Pension Plan also known as “Teachers,” lowered its position in Canadian Natural Resources (CNQ) during the quarter that ended in December. The fund currently owns 3,405,540 shares, down from 6,336,114 shares in the third quarter. The position represents 0.80% of the fund’s total fourth-quarter portfolio.

Canadian Natural Resources (CNQ) makes up 1.8% of the iShares North American Natural Resources ETF (IGE). The ETF includes energy heavyweights such as ExxonMobil (XOM), Chevron (CVX), and CNQ’s Canadian peer, Suncor Energy (SU), which respectively make up 7.09%, 6.91%, and 2.43% of the fund.

Company overview

Canadian Natural Resources is one of the largest independent crude oil and natural gas producers in the world. Its exploration and production operations are focused in three regions :

  • North America , largely in   Western Canada
  • the   United Kingdom portion of the   North Sea
  • Cote d’Ivoire ,   Gabon , and   South Africa   in offshore Africa

CNQ’s Canadian properties are mainly in Alberta, British Columbia, Saskatchewan, and Manitoba. Its Horizon Oil Sands Mining and Upgrading segment produces synthetic crude oil through bitumen mining and upgrading operations.

The company also has midstream activities that include pipeline operations, an electricity cogeneration system and an investment in the   North West Redwater Partnership , a general partnership formed in the province of   Alberta .

Canadian Natural Resources trims 2015 capital expenditure plans

In January, lower commodity prices prompted CNQ to slash its 2015 budget to $6.2 billion from a previous projection of $8.6 billion. It said the reduction will lead to a “targeted 7% production growth from the midpoint of 2014 production guidance levels.” It also agreed to “defer capital expenditures of approximately $470 million related to the Kirby North Phase 1 thermal in situ project” until commodity prices stabilized.

The company’s latest 4Q14 earnings release notes, “Strong cost management and prudent financial discipline continue to remain our focus given the volatility in commodity prices.”

A news report also notes that CNQ is considering spinning off royalty assets via a sale or an initial public offering.

Posts robust growth in 4Q14 earnings

In 4Q14, total production before royalties rose 27% to 860,920 barrels of oil equivalent per day, or boepd, from 677,242 boepd in the fourth quarter of 2013, and increased 8% sequentially. CNQ said 4Q14 net earnings surged to 1.20 billion Canadian dollars ($966 million), or 1.09 Canadian dollars a share, up from 413 million Canadian dollars, or 38 Canadian cents in the same quarter a year ago.

The next part of this series will cover the Teachers position update in Republic Services.

Continue to Part 11

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