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Canadian Natural Resources boosts B.C., Alberta exploration
Don Whiteley Petroleum News Contributing Writer
Calgary-based Canadian Natural Resources Ltd. is boosting its natural gas exploration efforts in Northeast British Columbia and Northwestern Alberta, the company said Nov. 5 in releasing its third quarter results.
British Columbia properties will see 176 wells, well above an original forecast of 108 wells, while Northwest Alberta’s well count will go to 165, up from the 112 originally forecast.
“Northeast British Columbia drilling reflects an increased Helmet drilling program, as well as a shallow natural gas drilling program in the Fort St. John block which benefits from the revised royalty regime for shallow natural gas wells in British Columbia,” the company said in a release.
Canadian Natural said it plans to drill approximately 921 net natural gas wells, 459 net crude oil wells and 321 stratigraphic test/service wells in 2004.
Capital expenditures across the board in 2004 will range from $2.492 billion to $2.892 billion, with most of the uncertainty coming in the company’s Horizon oil sands project. North American natural gas exploration is $928 million, down slightly from an original forecast of $950 million. Record third-quarter performance The company put in a record performance in the third quarter, and in the nine months of 2003. Third quarter cash flow was $758 million ($5.62 per share) compared with $643 million ($4.83 per share) in the third quarter of 2002 and $762 million ($5.68 per share) in the previous quarter.
Third quarter net earnings were $203 million ($1.51 per share) compared with $117 million (88 cents per share) for the third quarter of 2002 and $525 million ($3.91 per share) in the previous quarter. Adjusted net earnings from operations were $215 million ($1.60 per share) compared with $164 million ($1.23 per share) for the third quarter of 2002 and $256 million ($1.91 per share) in the previous quarter.
Nine month net earnings of $1.2 billion ($8.61 per share) compared with $0.4 billion ($2.87 per share) in 2002. Nine month cash flow of $2.4 billion ($18.06 per share) compared with $1.5 billion ($11.73 per share) in 2002. Quarterly production on guidance “This was another quarter of executing our program and delivering results,” said Canadian Natural Chairman Allan Markin. “Our quarterly production was on guidance and when combined with strong commodity prices and lower operating costs, resulted in record cash flow and solid third quarter earnings. Operationally, our Western Canadian and North Sea assets are delivering as expected, and we have made significant progress on our larger, future-growth projects.”
Third quarter natural gas sales held at 1,289 million cubic feet per day. Fourth quarter 2003 sales are expected to average 1,255 to 1,280 million cubic feet per day of natural gas and 240,000 to 250,000 barrels per day of crude oil and natural gas liquids. Annual 2003 production will be approximately 1,295 to 1,300 million cubic feet per day of natural gas (2002 — 1,230 million cubic feet per day) and approximately 241,000 to 245,000 bpd of crude oil and NGLs (2002 — 215,000 bpd).
Despite a successful summer shallow gas drilling program, gas production was impacted by continued steep declines in the once-prolific Ladyfern field in British Columbia.
Production at Ladyfern, one of Canadian Natural’s most prolific performers two years ago, has dropped by 90 million cubic feet per day in the last year, and is expected to drop to only 3 million cubic feet per day by the end of this year.
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