Canadian Natural Resources (CNQ) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 production of 1,363,000 BOE/d, including 1,022,000 bbl/d liquids and over 2 Bcf/d natural gas, with record oil sands mining and upgrading results and top-tier operating costs.

• Oil Sands Mining and Upgrading delivered 498,000 bbl/d of SCO, including a record 529,000 bbl/d in August 2024, with operating costs of $20.67/bbl.

• Announced agreements to acquire Chevron's 20% AOSP and 70% Duvernay interests, targeting significant production and free cash flow growth, with closings expected in Q4 2024.

• Distributed $1.9 billion to shareholders in Q3 2024 and $6.7 billion year-to-date through dividends and share repurchases.

• Quarterly dividend increased by 7% to $0.5625/share, marking 25 consecutive years of dividend growth.

Financial highlights

• Q3 2024 net earnings were $2.3 billion; adjusted net earnings from operations were $2.1 billion.

• Adjusted funds flow reached $3.9 billion; cash flows from operating activities were $3.0 billion.

• Quarterly average production decreased 2% year-over-year to 1,363,086 BOE/d.

• Maintained strong liquidity with $6.2 billion as of September 30, 2024.

• Oil Sands Mining and Upgrading production averaged 497,656 bbl/d, up 7,000 bbl/d from Q3 2023.

Outlook and guidance

• Acquisitions of Chevron's AOSP and Duvernay assets expected to close in Q4 2024, adding 62,500 bbl/d SCO and 60,000 BOE/d, respectively, in 2025.

• 2024 corporate annual natural gas guidance remains at 2.12–2.23 BCF, despite reduced dry gas drilling due to low prices.

• No major turnaround at Horizon in 2025 expected to save around CAD 75 million.

• Capital allocation policy updated: 60% of free cash flow to shareholders post-acquisitions until net debt targets are met.

• Focus remains on optimizing production, cost efficiency, and prioritizing high-return projects for 2025.