CALGARY Alberta (Reuters) - Canadian Natural Resources Ltd (CNQ.TO), Canada’s largest independent oil producer, said on Tuesday it plans to boost capital spending 11 percent next year, raising its output by nearly 90,000 barrels per day despite weak oil prices.
The company, which posted a decline in third-quarter profit but beat expectations, said it will spend C$8.6 billion next year to raise production 9 percent to about 893,000 bpd.
Oil prices touched three-week lows this week after Saudi Arabia cut prices for crude exports to the United States.
But if prices weaken further, Canadian Natural said it can quickly cut its budget if needed.
“We can quickly curtail over C$2 billion in capital spending if we choose,” Steve Laut, the company’s president, said on a conference call. “In a volatile commodity price environment, capital flexibility is important.”
Canadian Natural also said it will keep pushing forward on an expansion of its Horizon oil sands project as it eyes boosting output at the northern Alberta site to 250,000 bpd in 2017 from about 122,000 bpd currently. It expects to spend C$2.45 billion next year and forecast production of synthetic crude at 127,000 bpd for 2105.
Canadian Natural posted an 11 percent fall in third-quarter profit, mainly due to lower realized prices for crude oil.
Net income fell to C$1.04 billion ($912.3 million), or 94 Canadian cents per share, in the third quarter ended Sept. 30, from C$1.17 billion, or C$1.07 per share, a year earlier.
Adjusted profit from operations, which excludes most one-time items, fell 2.5 percent to C$984 million, or 89 Canadian cents per share, but came in well ahead of the average analyst forecast for the measure of 75 Canadian cents per share, according to Thomson Reuters I/B/E/S.
The company said it targets overall 2015 production at between 869,000 barrels of oil equivalent per day (boepd) and 916,000 boepd.
Canadian Natural, which operates in Western Canada, the North Sea and offshore West Africa, said cash flow from operations, a key indicator of its ability to pay for new projects and drilling, fell marginally to C$2.44 billion, or C$2.21 per share.
The company’s total oil and gas production rose 13 percent to 796,931 boepd.
Canadian Natural shares were up 82 Canadian cents, or 2.1 percent, to C$39.08 by midday on the Toronto Stock Exchange.
Reporting by Ashutosh Pandey in Bangalore and Scott Haggett in Calgary; Editing by Maju Samuel and David Gregorio