CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd (CNQ.TO), the country’s largest independent petroleum producer, swung to a loss in the second quarter as low global oil prices continued to bite and the Canadian province of Alberta raised its corporate tax rate.
The company, which operates in Western Canada, the North Sea and offshore West Africa, also said on Thursday it has made further cuts to 2015 spending plans to help cope with the nearly 60 percent plunge in crude prices in the past year.
CNRL reduced its latest capital budget by C$245 million ($186.11 million) to C$5.5 billion. The company has now slashed its original 2015 budget of C$8.6 billion four times since it was announced last November.
The Calgary-based producer joins a slew of other Canadian companies that have been forced to clamp down on spending and defer new projects as low crude prices persist.
CNRL reported a net loss of C$405 million, or 37 Canadian cents per share, for the quarter, compared with a profit of C$1.07 billion, or 97 Canadian cents, a year earlier.
It said the loss was primarily due to a C$579 million charge related to Alberta’s increased corporate tax rate, and warned higher taxes could dampen investment going forward.
“This charge effectively translates into lower future cash flows and therefore, lowers reinvestment in the business,” said Corey Bieber, CNRL’s chief financial officer.
However Alberta Premier Rachel Notley, whose left-leaning NDP government introduced the higher rate earlier this summer, said increased corporate taxes were not as significant a factor as the recent drop in oil prices.
“I think we can all assume that it is the latter that is driving some of the challenges that the oil and gas sector is dealing with,” Notley told reporters at a news conference when asked specifically about CNRL’s results.
The company reported stronger-than-expected adjusted profit of 16 Canadian cents per share as a result of reduced operating expenses.
Second-quarter production averaged 805,500 barrels of oil equivalent per day, down marginally from the 817,471 boepd produced in the same quarter a year earlier.
CNRL Chief Executive Steve Laut said around 4,000 bpd of conventional heavy crude production in the Lloydminster, Saskatchewan, region have been shut in because the wells were uneconomic at current prices, but the company did not anticipate further shutdowns this year.
CNRL shares were last up 24 cents at C$32.58 on the Toronto Stock Exchange.
Additional reporting by Amrutha Gayathri in Bengaluru; Editing by Don Sebastian and Peter Galloway