CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd (CNQ.TO) posted a higher quarterly profit that topped estimates on Thursday, and cut 2017 capital expenditure by about C$180 million after deferring spending at one of its major oil sands projects.
Canada’s largest oil and gas producer will delay spending C$315 million on tailings pond management at its Horizon project expansion until 2018, when it expects to be able to do the work more cheaply, thanks to lessons learned at its newly acquired Athabasca Oil Sands project.
That deferral will be offset by the company extending a planned turnaround at Horizon in the third quarter to 45 days from 24 days, which will cost more than originally planned.
Canadian Natural now expects to spend C$3.9 billion in 2017 and said its 2018 capital budget will be between C$4.3 billion and C$4.7 billion, reflecting the deferred work at Horizon.
U.S rivals like Anadarko Petroleum (APC.N) and Hess Corp (HES.N) have also recently cut capital budgets, although they said the revisions were due to a dip in oil prices, a trend not expected when 2017 budgets were crafted.
Canadian Natural shares were last up 4.3 percent at C$40.26 on the Toronto Stock Exchange, an advance that analysts attributed to the better-than-expected results.
For the quarter ended June 30, the company earned C$1.07 billion ($849.3 million), or 93 Canadian cents per share. Excluding items, it earned 29 Canadian cents per share, above analysts’ average estimate of 26 Canadian cents, according to Thomson Reuters I/B/E/S.
Canadian Natural said oil and natural gas production rose 16.5 percent to 913,171 barrels of oil equivalent per day (boepd) in the quarter from a year earlier, and in June, the company produced a record of more than 1 million boepd.
Stronger-than-forecast synthetic crude production at Horizon was partially offset by lower than expected natural gas production because of outages at a third-party processing facility that management described as “disappointing.”
During the quarter, Canadian Natural became the majority owner of the Athabasca Oil Sands project in northern Alberta after buying billions of dollars of oil sands assets from Royal Dutch Shell (RDSa.L) and Marathon Oil Corp (MRO.N).
Reporting by Anirban Paul in Bengaluru; Editing by Gopakumar Warrier and Bernadette Baum