- Horizon oil-sands project operating cost falls to record low
- Shows low-cost nature of company's business: Morgan Stanley
Canadian Natural Resources Ltd., the nation’s largest heavy-oil producer, reported a narrower first-quarter loss as production volumes met forecasts and costs dropped.
The net loss shrank to C$105 million ($81.9 million), or 10 cents a share, from C$252 million, or 23 cents, a year earlier, the Calgary-based company said Thursday in a statement. Excluding one-time items, the per-share loss from operations was 50 cents, beating the 58-cent loss expected by analysts, according to the average of 15 estimates compiled by Bloomberg.
Canadian Natural has lowered costs, slowed drilling and reduced salaries as it seeks to avoid job cuts in the slump, and remains focused on completing expansions of the Horizon oil-sands mining project this year and next. The company turned off some unprofitable natural-gas supplies in the first quarter and reduced heavy-oil volumes as it conducted repairs at its Kirby and Primrose East projects.
“Overall a solid quarter in our view with record low Horizon opcost and improved cost outlook in International operations,” Benny Wong, an analyst with Morgan Stanley in New York, wrote in a note on Thursday. The record low operating cost at Horizon of C$25.50 a barrel for production in the quarter is below Morgan Stanley’s C$28.50 a barrel estimate, Wong said, and lower than Canadian Natural’s full-year estimate of C$27 to C$30 a barrel, including the impact of a maintenance turnaround.
Production fell to the equivalent of 844,531 barrels a day in the quarter from 898,053 barrels a day a year earlier, according to the statement. West Texas Intermediate crude averaged $33.63 a barrel, down 31 percent from the same period last year.
Canadian Natural reported the results before the start of regular trading on North American markets. The stock, which has 18 buy and eight hold recommendations from analysts, rose 0.9 percent to C$36.26 at 10:44 a.m. in Toronto.