Canadian Natural (CNQ) Posts Loss In Q3; Revenues Fall Y/Y
Zacks Investment Research | Nov 07, 2016 08:07PM ET
On Nov 3, Canadian Natural Resources Limited (TO:CNQ) reported third-quarter loss of 24 U.S. cents, which compared unfavorably with the year-earlier profit of 14 U.S. cents. Lower production and reduced oil and gas price realizations led to the underperformance.
This independent explorer and producer’s quarterly revenues of C$2,335 million were substantially lower than the year-ago figure of C$3,114 million.
Canadian Natural’s third-quarter cash flow from operations – a key metric to gauge its capability to fund new projects and drilling – was C$1,021 million. The reported figure came in significantly below the third-quarter 2015 level of C$1,533 million.
Production
Canadian Natural’s quarterly production of 735,212 barrels of oil equivalent per day (BOE/d) was down 13% from the prior-year quarter level.
Natural gas production remained essentially flat at 1,645 million cubic feet per day (MMcf/d). However, oil and natural gas liquids (NGLs) production came in at 460,986 barrels per day (Bbl/d), well below the prior-year quarter figure of 573,135 Bbl/d.
Realized Prices
As reported, average realized liquid price (before hedging) was C$39.66 per barrel during the third quarter, down 5% from the corresponding quarter last year. Moreover, average realized natural gas price (excluding hedging) for the three months ended Sep 30, 2016 was C$2.44 per thousand cubic feet (Mcf) as against the year-ago level of C$3.22 per Mcf.
Total Expenses
Total expenses decreased 9% from C$3,212 million in the year-earlier quarter to C$2,924 million.
Capital Expenditure & Balance Sheet
As of Sep 30, 2016, the company had C$19 million in cash and cash equivalents and long-term debt (including current portion) of C$17,292 million, representing a debt-to-capitalization ratio of approximately 40.3%.
Guidance
The company, which is Canada’s second-largest natural gas producer, anticipates capital expenditure to be approximately $4.4 billion in 2016. Canadian Natural expects fourth-quarter liquid production of 575,000–599,000 Bbl/d and natural gas production in the 1,690–1,720 MMcf/d range.
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