Aerial view of Canadian oil sands. (Source: Shutterstock)
Canadian Natural Resources (CNQ) plans to finish two major upgrades at its oil sands mining facilities this year that will lead to a corresponding production increase of about 33,600 bbl/d.
“The Horizon debottleneck project is nearing its end,” COO Scott Stauth said during CNQ’s Feb. 29 earnings call. “We have one more installation to tie-in during the turnaround in Q2, and that will essentially wrap up that project.”
The Horizon Oil Sands mining facility in Alberta currently produces about 250,000 bbl/d of bitumen, the raw material refined at the site.
“Turnarounds” are maintenance periods that temporarily shut down production to keep oil sands upgraders, which turn bitumen into crude, in working order. The Horizon facility will be shut down for about 30 days before the end of June with a temporary loss in production of about 89,000 bbl/d.
With the new upgrade, however, the facility will be able to skip a turnaround cycle, Stauth said, meaning production at the site next year will increase by about 28,000 bbl/d for all of 2025.
Another debottlenecking project at the AOSP oil sands facility, slated for completion in Alberta by the end of 2024, will add another 5,600 bbl/d in production.
Stauth said both projects would benefit from an operational Trans Mountain Pipeline, which will triple the west-bound capacity of crude from Alberta to the Canadian West Coast to 890,000 bbl/d. Pipeline builders most recently said the pipeline would start flowing sometime in the second quarter of 2024.
Canadian Natural Resources’ bitumen production rose in 2023 and hit an average of 262,000 bbl/d, a 10,000 bbl/d increase over 2022.
Overall for fourth quarter 2023, Canadian Natural reported better-than-expected earnings of CA$2.63 billion (US$1.94) of net earnings and raised its quarterly dividend by 5% to CA$1.05 per common share. Production volumes hit a quarterly record of 1.42 MMboe/d.
The company reached a net-debt goal of CA$10 billion earlier than targeted and plans to increase returns to shareholders. CFO Mark Stainthorpe said that financial stability has been a priority for the company and it’s paying off.
“We've hit our CA$10 billion,” Stainthorpe said. “We're focused on the 100% returns to shareholders through dividends and share repurchases. And it's a pretty big milestone, and … the reason for it has been a very strong, safe, reliable operations over the last couple of years.”
Shares of the company rose with the news, hitting a record high of US$72.81 on March 1 with the release of the earnings report.
Recommended Reading
Quantum Raises $10B for Oil, Gas, Midstream, Energy Transition
2024-10-29 - Quantum Capital Group raised $5.25 billion for its private equity flagship, Quantum Energy Partners VIII. A source told Hart Energy that most of the firm’s capital has gone into oil and gas because it offers the best risk-adjusted returns.
Private Equity Gears Up for Big Opportunities
2024-10-04 - The private equity sector is having a moment in the upstream space.
Quantum’s VanLoh: New ‘Wave’ of Private Equity Investment Unlikely
2024-10-10 - Private equity titan Wil VanLoh, founder of Quantum Capital Group, shares his perspective on the dearth of oil and gas exploration, family office and private equity funding limitations and where M&A is headed next.
EnCap Closes $6.4B for E&P Fund, Including Co-investments
2024-10-21 - EnCap’s Fund XII raised $5.25 billion for work in U.S. oil and gas basins. Coupled with its energy transition and midstream funds, the private equity firm has collectively raised $9 billion this year.
E&P Consolidation Ripples Through Energy Finance Providers
2024-11-29 - Panel: The pool of financial companies catering to oil and gas companies has shrunk along with the number of E&Ps.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.