CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd’s (CNQ.TO) first-quarter profit surged more than ninefold as sales of light and heavy oil rose 5 percent, partly offsetting an unplanned oil sands outage and weaker domestic oil and gas prices, the country’s largest independent energy producer said on Thursday.
Canadian Natural earned C$427 million ($433 million), or 39 Canadian cents a share, up from a year-earlier C$46 million, or 4 Canadian cents a share.
The company’s adjusted earnings, excluding onetime items, were C$300 million, or 27 Canadian cents a share, lagging the average estimate among analysts of 44 Canadian cents a share, according to Thomson Reuters I/B/E/S.
Steve Laut, the company’s president, said that low natural gas prices was one of the factors behind the wide discrepancy between its results and analysts’ expectations for its profit.
He also said that heavily discounted Canadian oil prices, a wide differential between the West Texas Intermediate oil price benchmark and the European Brent standard also cut into profits.
However, the largest impact came from an unplanned, month-long shutdown of the company’s 110,000 barrel per day Horizon oil sands plant in February.
“The (biggest factor) was the Horizon outage,” he told reporters following the company’s annual meeting. “But we think all those things are temporary ... Differentials are coming back, Horizon’s back on and so we think we will have a strong year.”
Cash flow, a glimpse into the company’s ability to fund development, was C$1.3 billion, or C$1.16 a share - up 20 percent from C$1.07 billion, or 97 Canadian cents a share.
Overall production averaged 612,279 barrels of oil equivalent a day, up 8 percent as a result of successful light and heavy oil drilling as well as the addition of some oil sands production compare with the same period last year.
The Horizon oil sands plant went off line in mid-February for an extended outage following what it had initially thought would be minor repairs to a fractionation unit. It was down for almost all of the first quarter of 2011, however, due to a fire.
This year’s outage forced the company to reduce the operation’s annual production forecast to 93,000-103,000 barrels a day from 105,000-115,000.
Before the results, Canadian Natural shares fell 97 Canadian cents, or nearly 3 percent, to C$32.94 on the Toronto Stock Exchange on Thursday. That represents a drop of 24 percent in the past 12 months. ($1=$0.99 Canadian)
Reporting by Jeffrey Jones and Scott Haggett; Editing by Bob Burgdorfer, Gary Hill