Canadian Natural Resources (NYSE: CNQ), Canada’s largest oil and gas producer, announced a decrease in adjusted net earnings for the third quarter compared to the same period last year. The decline is attributed to a significant drop in natural gas prices in North America, as well as lower international crude oil prices.
On Thursday, the company reported adjusted net earnings from operations of US$1.5 billion (C$2.1 billion) for the third quarter. This represents a decrease from US$2 billion (C$2.85 billion) in the third quarter of 2023.
The company indicated that the earnings drop was driven by lower sales volumes and netbacks for crude oil and natural gas liquids (NGLs) in North America. Additionally, the realized prices for synthetic crude from oil sands production fell. Management noted that high storage levels in 2024 continued to push natural gas prices down in both Canada and the United States.
In the third quarter, Canadian Natural’s natural gas production fell by 5% year-over-year. The realized natural gas price dropped sharply by 56%. Crude oil and NGL prices decreased by 10%, while prices for oil sands production declined by 7% compared to a year earlier.
The company stated, “Although inflationary pressures are easing, we have faced and may continue to face inflationary challenges in our operating and capital expenditures, along with higher fluctuations in commodity prices and interest rates.”
In response to the low natural gas prices, Canadian Natural now plans to drill 74 net natural gas wells in 2024, which is 17 fewer wells than initially outlined in its original budget for the year.
Following the end of the third quarter, Canadian Natural announced an agreement in early October to acquire oil sands and shale assets in Canada from U.S. energy giant Chevron for $6.5 billion in cash.
Related Topics: