Canadian Natural Resources (CNQ) Status Update summary

Strategic Overview and Asset Strength

• Maintains a diversified, long-life, low-decline asset base with a focus on disciplined capital allocation, continuous improvement, and operational efficiency.

• Four capital allocation pillars: balance sheet strength, shareholder returns, resource value growth, and opportunistic acquisitions, all aimed at maximizing long-term value.

• Holds the second largest reserves among global peers and the largest crude oil and natural gas reserves in Canada, with a 33-year reserve life index and a high proportion of valuable SCO, light crude, and NGLs.

• Product mix for 2025 targets 47% high-value liquids, 26% heavy oil, and 27% natural gas, reducing exposure to any single commodity.

• Marketing strategy includes diversified sales channels for both gas and liquids, with increased export commitments and strong pricing capture.

2025 Budget, Production, and Capital Allocation

• 2025 capital budget is set at $6.15 billion, with $3.2 billion for conventional E&P and up to $2.815 billion for thermal and oil sands mining/upgrading.

• CAD 90 million allocated to carbon capture projects, mainly for Pathways and related engineering work.

• Production guidance for 2025 is 2,425–2,480 MMcf/d gas and 1,106–1,142 Mbbl/d liquids, targeting 12–16% production per share growth from 2024F to 2025B.

• Drilling program includes 361 net wells across key plays, with a focus on capital efficiency and drill-to-fill opportunities.

• Horizon project shifts to biennial maintenance, targeting $75M capital savings and 28,000 bbl/d SCO production increase, with no planned turnaround in 2025.

Financial Strength, Shareholder Returns, and Acquisitions

• Strong free cash flow generation supports increasing dividends and share buybacks, with 25 consecutive years of dividend growth at a 21% CAGR.

• Free cash flow allocation policy prioritizes shareholder returns and balance sheet strength, with 60–100% of free cash flow to shareholder returns depending on net debt.

• Free cash flow per share is 30% higher at US$85 WTI vs. US$75 WTI.

• Maintenance capital is in the $8–$9/BOE range, with growth capital and acquisition costs included in the 2025 budget.

• North Sea operations are in decommissioning mode, with CAD 265 million ARO spend in 2025, mostly recoverable through tax credits.