Canadian Natural Profit Drops 58% on Oil Price, Currency

Canadian Natural Resources Ltd. (CNQ), the nation’s third-largest oil producer by market value, said fourth-quarter profit fell 58 percent as crude prices declined and it reported a foreign-exchange loss.

Net income dropped to C$352 million ($341 million), or 32 cents a share, from C$832 million, or 76 cents, a year earlier, the Calgary-based company said today in a statement. Excluding a foreign-exchange loss and employee stock-option costs, per-share profit missed the 38-cent average of 17 analysts’ estimates compiled by Bloomberg.

The company announced plans today to sell or bring in a partner for some of its Montney holdings in British Columbia. It’s also seeking new markets to boost cash flow as rising supplies depress crude prices. The price of Western Canada Select, an oil-sands benchmark, fell 25 percent from a year earlier to average $61.32 a barrel in the quarter, according to data compiled by Bloomberg.

“They’ve got a huge position in the Montney and this helps realize the value sooner rather than later,” Lanny Pendill, an analyst at Edward Jones & Co. in St. Louis, said in a phone interview today.

Canadian Natural rose 3 percent to C$32.10 at the close in Toronto, the highest price since Sept. 21.

Montney Assets

The company is seeking a buyer or joint-venture partner with liquefied natural gas experience for about 250,000 net acres in the Montney, it said. Canadian Natural has the largest Montney holding, according to the company.

Talisman Energy Inc. (TLM), another Calgary-based energy company, yesterday announced plans to sell or find partners for holdings in the North Duvernay and Montney. Several companies, including Exxon Mobil Corp., are exploring LNG terminals in British Columbia to export gas from the Montney.

Canadian Natural also said today that Vice Chairman John Langille will retire in May after 37 years at the company. Corey Bieber, vice president of finance, will become chief financial officer on March 28, succeeding Douglas Proll, who’ll become an executive vice president. Chief Operating Officer Tim McKay also adds the role of executive vice president, responsible for the producer’s Horizon oil-sands operations.

Revenue Declines

Canadian Natural reported a 75 percent decline in revenues to C$3.7 billion, from C$14.6 billion a year earlier. It produced the equivalent of 658,973 barrels of oil a day during the quarter, up from 657,599 barrels a year earlier.

The company posted a foreign exchange loss of C$210 million, primarily due to repayment of U.S. dollar debt securities in the fourth quarter instead of the third quarter. During the fourth quarter, the company repaid $350 million of 5.45 percent unsecured notes. It repaid $400 million of 6.7 percent unsecured notes during the third quarter of 2011.

Canadian Natural’s Horizon output fell below the company’s guidance, as it carried out maintenance at the project in the fourth quarter, including unplanned work in late December.

“The key catalyst for the stock going forward is going to center on reliability at Horizon,” Pendill said.

Suncor Energy Inc. (SU) and Imperial Oil Ltd. (IMO) are Canada’s largest oil producers.

To contact the reporter on this story: Rebecca Penty in Calgary at rpenty@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net

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