May 5, 2011 / 9:45 PM / 7 years ago

UPDATE 2-Canadian Natural profit skids on Horizon outage

* Q1 EPS C$0.04 vs. C$0.67

* Cash flow C$0.97/shr vs. C$1.38/shr

* Half Horizon output to restart weeks after mid-June (Adds details, comment)

CALGARY, Alberta, May 5 (Reuters) - Canadian Natural Resources Ltd’s (CNQ.TO) first-quarter profit sank 94 percent as a fire halted production at its oil sands project and a tax increase hit its North Sea operations, the country’s largest independent oil explorer said on Thursday.

Canadian Natural, whose Horizon oil sands project has been shut since an early January blaze at the upgrading plant, earned C$46 million ($47 million), or 4 Canadian cents a share, down from C$735 million, or 67 Canadian cents, a year earlier.

The results included unusual expenses of C$182 million from the rise in British taxes, stock-based compensation charges and hedging losses.

Excluding one-time items, earnings tumbled to C$228 million, or 21 Canadian cents a share, down 64 percent from C$639, or 58 Canadian cents.

That lagged an average estimate of 33 Canadian cents a share among analysts surveyed by Thomson Reuters I/B/E/S.

Cash flow, a glimpse into the company’s ability to fund projects, fell 29 percent to C$1.07 billion, or 97 Canadian cents a share, from C$1.5 billion, or C$1.38.

Canadian Natural said the outage of the 110,000 barrel a day Horizon oil sands plant in northern Alberta hampered results, as revenues were chopped but operating costs continued.

Horizon production is expected to resume to about half its normal capacity “several weeks” after two of the coker drum units are due to be repaired in mid-June, the company said. That represents some delay from the last estimate of restarting 50 percent of the output in the second quarter.

Steve Laut, the company’s president, told reporters that mechanical repairs to the cokers should be completed in June but the amount of time needed to commission the units isn’t certain.

“It could take anywhere from one to three weeks to start up,” he said.

The other two cokers are scheduled to be back in service in the third quarter.

Repair costs are estimated at C$350 million to C$450 million, up from an earlier C$300 million to C$400 million as cold weather caused more damage to the upgrading plant than anticipated following the January fire.

The bulk of the costs will be covered by insurance.

Overall output averaged 566,231 barrels of oil equivalent a day in the first quarter, up 7.3 percent from the same period a year earlier.

Canadian Natural shares closed down C$1.10, or 2.6 percent, at C$41.24 on the Toronto Stock Exchange.

The company released the results after the market closed, on a day when energy stocks tumbled due to a more than 10 percent skid in oil prices. [ID:nL3E7G50LS]

$1=$0.97 Canadian Reporting by Jeffrey Jones; editing by Rob Wilson

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