Canadian Natural posts smaller loss, says Horizon plan on track

Thu Aug 4, 2016 5:20pm EDT
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(Reuters) - Oil and natural gas producer Canadian Natural Resources Ltd CNQ.TO CNQ.N reported a smaller quarterly loss on Thursday as lower expenses helped offset a slump in crude prices.

The Calgary-based company also said it is on track to start up the second phase of its Horizon oil sands project, located north of Fort McMurray, in October, ramping up to full production in November.

The third phase of the project is scheduled to start in the fourth quarter of 2017, Canadian Natural said in June.

Once the Horizon project is complete, the company's capital spending is expected to drop significantly. That will mean more flexibility to improve cash flow, invest in resource development and consider "opportunistic" deals.

"We don't see any gaps in our portfolio, so we don't see any need to do acquisitions," said President Steve Laut on a call with analysts, adding the company does look at all core opportunities and could act if something good showed up.

Canadian Natural, which produces almost all of its natural gas and natural gas liquids from fields in Alberta, British Columbia and Saskatchewan, said cash flow from operations fell nearly 38 percent to C$938 million ($717.5 million) in the second quarter ended June 30.

The company's net loss narrowed to C$339 million, or 31 Canadian cents per share, from C$405 million, or 37 Canadian cents per share, a year ago.

Adjusted to remove one-time items, the company's net loss from operations was C$210 million, or 19 Canadian cents per share, compared with a profit of C$178 million, or 16 Canadian cents per share, in the previous year.

Oil and natural gas production fell 2.7 percent to 783,988 barrels of oil equivalent per day (boepd) in the quarter from a year earlier. The company said it expects 2016 production levels to average between 798,000-852,000 boepd.   Continued...

Pipelines at Canadian Natural Resources Limited's (CNRL) Primrose Lake oil sands project are seen near Cold Lake, Alberta August 8, 2013.   REUTERS/Dan Riedlhuber