Canadian Natural Third-Quarter Profit Declines 57%
(Corrects gas volumes in the fourth paragraph.)
Canadian Natural Resources Ltd. (CNQ), the nation’s third-largest oil and natural-gas producer, said quarterly profit declined 57 percent as fossil fuel prices fell. The shares dropped the most in more than four months.
Net income dropped to C$360 million ($360.9 million), or 33 cents a share, in the third quarter from C$836 million, or 76 cents, a year earlier, the Calgary-based company said today in a statement. Excluding a gain from derivatives contracts and other one-time items, per-share profit was 18 cents less than the 50- cent average of 18 analyst estimates compiled by Bloomberg. Sales rose 7 percent to $3.53 billion.
The “disappointing” results “were largely due to lower realized pricing for North American liquids production,” Randy Ollenberger, an analyst at BMO Capital Markets Ltd. in Calgary, said in a note today.
Canadian Natural is among producers that have cut spending and shut gas wells after prices in New York dropped to a 10-year low in April. Gas production fell 5 percent to 1.3 billion cubic feet a day from the year earlier after the company shut in 40 million cubic feet a day because of low prices, according to the statement.
Gas prices averaged $2.893 per million British thermal units on the New York Mercantile Exchange in the quarter, down 29 percent from a year earlier.
The company lowered its capital budget for 2012 by 10 percent to C$6.7 billion in August, and reduced annual spending by an additional C$230 million in the quarter, it said in the statement.
Canadian Natural produced the equivalent of 667,616 barrels of oil a day in the quarter, an increase of 9 percent from a year earlier. It cut the mid-point of its full-year production guidance by 1 percent, lowering estimated production for 2012 from its Horizon upgrader in Alberta to 87,000 to 89,000 barrels a day.
The company will proceed with the 50,000 barrel a day North West Redwater upgrader and refinery, which will reduce its reliance on heavy crude oil prices, Steve Laut, Canadian Natural’s president, said in the release. Construction of the C$5.7 billion facility is expected to begin in 2013.
Canadian Natural fell 3.6 percent to C$28.02 at the close in Toronto. Earlier it declined 5.2 percent, the most intraday since June 21. The shares have fallen 27 percent this year.
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