Canadian Natural Resources Ltd. (CNQ), the nation’s largest heavy-oil producer, said second-quarter production surged after it completed the purchase of Devon Energy Corp. assets and the Horizon oil-sands mine reached record output.
Production climbed to the equivalent of 817,500 barrels of oil a day, from 623,315 a year earlier, when Horizon was shut for maintenance, Canadian Natural said in a statement on Marketwired today. The Calgary-based company was expected to produce about 807,000 barrels, the average of eight analysts’ estimates compiled by Bloomberg.
Canadian Natural closed on the C$3.13 billion ($2.86 billion) purchase of Devon’s conventional assets in Western Canada in April, boosting the amount of natural gas it produces. Horizon, which underwent its first full maintenance overhaul in May 2013, is producing at a record as the price for Canadian oil reached its highest quarterly average in three years.
The company’s costs at Horizon are C$36.50 a barrel, Greg Pardy, an analyst for RBC Capital Markets in Toronto, wrote in an Aug. 1 note to clients. Spot prices for Western Canadian Select heavy oil rose 8.1 percent from a year earlier to average $83.78 a barrel in the second quarter, according to data compiled by Bloomberg.
Canadian Natural’s Primrose oil-sands project is operating under restrictions from regulators, who are investigating bitumen releases from the site.
The Alberta Energy Regulator last month said an independent technical review showed the company’s strategy of injecting large volumes of steam under pressure in closely spaced wells was a fundamental cause of the leaks.
Canadian Natural’s net income rose to C$1.07 billion, or 98 cents a share, from C$476 million, or 44 cents, a year earlier. Excluding one-time items, per-share profit exceeded the 98-cent average of 16 analysts’ estimates compiled by Bloomberg.
Canadian Natural released the results before the start of regular trading on North American markets. The shares, which have gained 28 percent this year, closed at C$45.85 yesterday in Toronto. The stock has 23 buy and four hold recommendations from analysts.
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