Form 6-K - Report of foreign issuer [Rules 13a-16 and 15d-16]

Share Name	Share Symbol	Market	Type
Canadian Natural Resources Ltd	NYSE:CNQ	NYSE	Common Stock

	Price Change	% Change	Share Price	High Price	Low Price	Open Price	Shares Traded	Last Trade
	-0.01	-0.03%	30.24	30.44	30.03	30.31	956,931	18:44:46

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of the

Securities Exchange Act of 1934

Dated: August 1, 2024

Commission File Number: 333-12138

CANADIAN NATURAL RESOURCES LIMITED

(Exact name of registrant as specified in its charter)

2100, 855 - 2ND Street S. W., Calgary, Alberta T2P 4J8

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ____ Form 40-F X

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant's "home country"), or under the rules of the home country exchange on which the registrant's securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant's security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

Exhibits 99.1, 99.2 and 99.3 to this report, filed on Form 6-K, shall be incorporated by reference as exhibits to the registrant's Registration Statements under the Securities Act of 1933 on Form F-10 (File Nos. 333-219366 and 333-219367).


Exhibit Number			Description

99.1			Press Release dated August 1, 2024

			Canadian Natural Resources Limited Announces 2024 Second Quarter Results

99.2			Management’s Discussion and Analysis for the three and six months ended June 30, 2024

99.3			Unaudited Interim Consolidated Financial Statements for the three and six months ended June 30, 2024 and 2023

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	Canadian Natural Resources Limited (Registrant)


Date: August 1, 2024	By:	/s/ Stephanie A. Graham
		Stephanie A. Graham
		Corporate Secretary & Associate General Counsel, Canada

CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES

2024 SECOND QUARTER RESULTS

CALGARY, ALBERTA – AUGUST 1, 2024 – FOR IMMEDIATE RELEASE

Canadian Natural's President, Scott Stauth, commented on the Company's second quarter results, "The strength of our well-balanced and diverse portfolio, combined with Canadian Natural's ability to execute safe, effective and efficient operations, delivered an excellent second quarter. Canadian Natural strategically managed turnaround activities and optimized production resulting in strong Q2/24 volumes of approximately 934,000 bbl/d of liquids and 2.1 Bcf/d of natural gas, totaling 1,286,000 BOE/d, an increase of 8% from Q2/23 levels of 1,194,000 BOE/d. In Q2/24, we delivered strong thermal production of approximately 268,000 bbl/d primarily due to better than expected performance from new pads as well as the early completion of planned turnarounds. At Horizon, we successfully completed the final tie-ins related to the reliability enhancement project as well as planned turnaround activities. Through optimization efforts, we completed the turnaround at Horizon in 28 days, two days earlier than budgeted.

Subsequent to quarter end we achieved a significant milestone at Horizon in July 2024 with production of the one billionth barrel of bitumen since operations began in 2009. Supporting this milestone is the Company's significant total proved SCO reserves at approximately 6.9 billion barrels with a Reserve Life Index ("RLI") of approximately 44 years as at year end 2023. Also during the month of July 2024, Synthetic Crude Oil ("SCO") production of approximately 500,000 bbl/d was achieved, partially due to strong production at Horizon which is benefiting from the final tie-ins and commissioning of the reliability enhancement project.

The efficient commissioning of the Trans Mountain Expansion ("TMX") pipeline during Q2/24 and the positive impact this incremental egress has on the Canadian economy represents a significant achievement for all Canadians. The impact on the energy industry has been positive with narrowing of heavy oil differentials, improved realized pricing along with the development of a more diverse market for western Canadian crude oil. TMX is a significant accomplishment for Canada, adding much-needed egress capacity and increasing exposure to global market pricing for crude oil products.

Our strong execution, effective and efficient operations, combined with stronger realized prices, drove significant free cash flow during the quarter despite planned turnarounds.

In June 2024, the Canadian Government amended the Competition Act and due to uncertainty on how this new legislation will be interpreted and applied we are unable to provide an environment and climate update at this time. This legislation does not change our commitment to the environment and to ensuring safe, reliable operations, only the way in which we are publicly communicating these important aspects of our business."

Canadian Natural's Chief Financial Officer, Mark Stainthorpe, also added "In Q2/24, we delivered strong financial results, including adjusted net earnings of approximately $1.9 billion and adjusted funds flow of $3.6 billion, which drove significant returns to shareholders totaling $1.9 billion in the quarter. Our capital program for 2024 remains on target and as per our free cash flow allocation policy, we are returning 100% of free cash flow to shareholders in 2024 and we will continue to manage this allocation on a forward looking annual basis.

Year-to-date up to and including July 31, 2024, we have distributed significant value to shareholders, totaling approximately $4.9 billion, inclusive of our sustainable and growing dividend and share repurchases.

At Canadian Natural, our culture of continuous improvement and employee ownership alignment with shareholders drives our teams to create significant value across all areas of the Company. Our safe, effective and efficient operations combined with flexible capital allocation maximizes value for our shareholders."

HIGHLIGHTS


		Three Months Ended						Six Months Ended
($ millions, except per common share amounts)		Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Net earnings		$	1,715	$	987	$	1,463	$	2,702	$	3,262
Per common share (1)	– basic	$	0.80	$	0.46	$	0.67	$	1.26	$	1.49
	– diluted	$	0.80	$	0.46	$	0.66	$	1.25	$	1.47
Adjusted net earnings from operations (2)		$	1,892	$	1,474	$	1,256	$	3,366	$	3,137
Per common share(1)	– basic (3)	$	0.89	$	0.69	$	0.57	$	1.57	$	1.43
	– diluted (3)	$	0.88	$	0.68	$	0.57	$	1.56	$	1.41
Cash flows from operating activities		$	4,084	$	2,868	$	2,745	$	6,952	$	4,040
Adjusted funds flow (2)		$	3,614	$	3,138	$	2,742	$	6,752	$	6,171
Per common share(1)	– basic (3)	$	1.69	$	1.47	$	1.25	$	3.16	$	2.81
	– diluted (3)	$	1.68	$	1.45	$	1.24	$	3.13	$	2.78
Cash flows used in investing activities		$	1,015	$	1,392	$	1,560	$	2,407	$	2,713
Net capital expenditures (4)		$	1,621	$	1,113	$	1,569	$	2,734	$	2,826
Abandonment expenditures		$	129	$	162	$	100	$	291	$	237

Daily production, before royalties
Natural gas (MMcf/d)		2,110		2,147		2,085		2,129		2,112
Crude oil and NGLs (bbl/d)		934,066		975,668		846,909		954,866		904,588
Equivalent production (BOE/d) (5)		1,285,798		1,333,502		1,194,326		1,309,649		1,256,513

(1)Per common share and dividend amounts have been updated to reflect the two for one common share split. Further details are disclosed in the Advisory section of the Company's MD&A and in the financial statements for the three and six months ended June 30, 2024 dated July 31, 2024.

(2)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024 dated July 31, 2024.

(3)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024 dated July 31, 2024.

(4)Non-GAAP Financial Measure. The composition of this measure was updated in the fourth quarter of 2023 and has been updated for all periods presented. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024 dated July 31, 2024.

(5)A barrel of oil equivalent ("BOE") is derived by converting six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of crude oil (6 Mcf:1 bbl). This conversion may be misleading, particularly if used in isolation, or to compare the value ratio using current crude oil and natural gas prices since the 6 Mcf:1 bbl ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

▪The strength of Canadian Natural's long life low decline asset base, supported by safe, effective and efficient operations, makes our business unique, robust and sustainable. In Q2/24, the Company generated strong financial results, including:

•Net earnings of approximately $1.7 billion and adjusted net earnings from operations of approximately $1.9 billion.

•Cash flows from operating activities of approximately $4.1 billion.

•Adjusted funds flow of approximately $3.6 billion.

▪Canadian Natural continues to maintain a strong balance sheet and financial flexibility, with approximately $6.4 billion in liquidity(1) as at June 30, 2024.

•In Q2/24, the Company repaid:

◦US$0.5 billion of 3.8% debt securities that were due April 15, 2024.

◦$0.3 billion of 3.55% medium term notes that were due June 3, 2024.

▪Following shareholder approval in May 2024, Canadian Natural's common shares were subdivided on a two for one basis at market close on June 3, 2024. The Company's common shares commenced trading on a split-adjusted basis on June 11, 2024.

▪During the second quarter of 2024, the Company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for $25.65 per common share with net proceeds, after fees and expenses, of $575 million. The proceeds reduce net debt and further strengthen our financial position while maximizing value for shareholders.


Canadian Natural Resources Limited			2			Three and six months ended June 30, 2024

▪Despite the second quarter of each calendar year being a period of high turnaround activity compared to other quarters, Canadian Natural delivered strong quarterly average production in Q2/24 of 1,285,798 BOE/d, an increase of 8% from Q2/23 levels of 1,194,326 BOE/d. Q2/24 consists of total liquids production of 934,066 bbl/d and natural gas production of 2,110 MMcf/d.

•The Company's world class Oil Sands Mining and Upgrading assets delivered average production of 410,518 bbl/d of high value SCO in Q2/24, an increase of 16% from Q2/23 levels. The increase in production reflected planned turnaround activities successfully completed ahead of schedule at Horizon, compared to Q2/23 which included planned turnarounds at both Horizon and the non-operated Scotford Upgrader.

◦During the planned turnaround at Horizon in Q2/24, the Company successfully completed all tie-ins and commissioning of the reliability enhancement project components.

–The reliability enhancement project targets to increase the two year average SCO capacity by approximately 14,000 bbl/d by extending the turnaround schedule to once every two years, with 2025 being the first year of operations without a planned turnaround.

◦Subsequent to quarter end, the Company achieved strong monthly SCO production of approximately 500,000 bbl/d in July 2024. This was primarily a result of high utilization and effective execution of tie-ins and commissioning associated with the Horizon reliability enhancement project completed in June 2024.

◦In July 2024, the Company achieved a milestone at Horizon with the production of the one billionth bitumen barrel since operations began in 2009.

–Supporting this milestone is the Company's significant total proved SCO reserves at approximately 6.9 billion barrels with an RLI of approximately 44 years as at year end 2023.

•Thermal in situ long life low decline production averaged 268,044 bbl/d in Q2/24, an increase of 12% from Q2/23 levels, primarily driven by strong results from Primrose, Kirby and Jackfish pad developments.

◦At Jackfish, the first of two Steam Assisted Gravity Drainage ("SAGD") pads drilled in 2023 reached full production capacity in Q2/24, slightly ahead of schedule. The second pad is currently producing at full production capacity also ahead of schedule, originally budgeted for Q4/24.

◦Planned turnarounds at Jackfish and Kirby North facilities were successfully completed ahead of schedule in Q2/24.

▪Canadian Natural has significant growth opportunities across its asset base, including sustainable production enhancements at its Oil Sands Mining and Upgrading operations.

•Near-term projects include the reliability enhancement project at Horizon, completed in Q2/24. Additionally, at the Scotford Upgrader, a debottlenecking project is targeted to be completed during the planned turnaround and targets to add incremental capacity at the Athabasca Oil Sands Project ("AOSP") of approximately 5,600 bbl/d net to Canadian Natural.

•Medium-term projects include the Naphtha Recovery Unit Tailings Treatment ("NRUTT") project at Horizon, which targets to add incremental production of approximately 6,300 bbl/d of SCO.

•Long-term projects at our Oil Sands operations include combining In-Pit Extraction Process ("IPEP") and Paraffinic Froth Treatment ("PFT") that have the potential to add approximately 195,000 bbl/d of additional annual bitumen production.

▪The Company's 2024 development plan has conventional activity strategically weighted to the second half of 2024 to align with increased market egress and improved crude oil pricing, maximizing value for our shareholders. The completion of construction and start-up of the TMX pipeline provides market optionality for all western Canadian crude oil products.

RETURNS TO SHAREHOLDERS

▪Canadian Natural achieved its $10 billion net debt level at year end 2023 and is returning 100% of free cash flow(1) in 2024 to shareholders, per the Company's free cash flow allocation policy. The Company will manage the allocation of free cash flow on a forward looking annual basis, while managing working capital and cash management as required.

•Returns to shareholders in Q2/24 were strong, totaling approximately $1.9 billion, comprised of $1.1 billion of dividends and $0.8 billion through the repurchase and cancellation of approximately 14.8 million common shares at a weighted average price of $51.66 per share, on a split-adjusted basis.

•In 2024, up to and including July 31, 2024, the Company has returned a total of approximately $4.9 billion directly to shareholders through $3.3 billion in dividends and $1.6 billion through the repurchase and cancellation of approximately 33.9 million common shares.


Canadian Natural Resources Limited			3			Three and six months ended June 30, 2024

▪Subsequent to quarter end, the Company declared a quarterly cash dividend on its common shares of $0.525 per common share. The quarterly dividend will be payable on October 4, 2024 to shareholders of record at the close of business on September 13, 2024.

•The Company has a leading track record of dividend increases, with 2024 being the 24th consecutive year of dividend increases with a compound annual growth rate ("CAGR") of 21% over that time. This demonstrates the confidence that the Board of Directors has in the sustainability of our business model, our strong balance sheet and the strength of our diverse, long life low decline reserves and asset base.

(1)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of this press release and the Company's MD&A for the three and six months ended June 30, 2024 dated July 31, 2024.


Canadian Natural Resources Limited			4			Three and six months ended June 30, 2024

OPERATIONS REVIEW AND CAPITAL ALLOCATION

Canadian Natural has a balanced and diverse portfolio of assets, primarily Canadian-based, with international exposure in the UK section of the North Sea and Offshore Africa. Canadian Natural’s production is well balanced between light crude oil, medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil) and SCO (herein collectively referred to as "crude oil") and natural gas and NGLs. This balance provides optionality for capital investments, maximizing value for the Company’s shareholders.

Underpinning this asset base is the Company's long life low decline production, representing approximately 79% of total budgeted liquids production in 2024, the majority of which is zero decline high value SCO production from the Company's world class Oil Sands Mining and Upgrading assets. The remaining balance of the Company's long life low decline production comes from its top tier thermal in situ oil sands operations and Pelican Lake heavy crude oil assets. The combination of these long life low decline assets, low reserves replacement costs, and effective and efficient operations results in substantial and sustainable adjusted funds flow throughout the commodity price cycle.

In addition, Canadian Natural maintains a substantial inventory of low capital exposure projects within the Company's conventional asset base. These projects can be executed quickly and, in the right economic conditions, provide excellent returns and maximize value for our shareholders. Supporting these projects is the Company’s undeveloped land base which enables large, repeatable drilling programs that can be optimized over time. Additionally, Canadian Natural maximizes long-term value by maintaining high ownership and operatorship of its assets and has an extensive infrastructure network, allowing the Company to control the nature, timing and extent of development. Low capital exposure projects can be stopped or started relatively quickly depending upon success, market conditions or corporate needs.

Canadian Natural’s balanced portfolio, built with both long life low decline assets and low capital exposure assets, enables effective capital allocation, production growth and value creation.


Drilling Activity	Six Months Ended
	Jun 30, 2024		Jun 30, 2023
(number of wells)	Gross	Net	Gross	Net
Crude oil (1)	125	124	141	135
Natural gas	49	40	50	42
Dry	1	1	2	2
Subtotal	175	165	193	179
Stratigraphic test / service wells	457	391	470	409
Total	632	556	663	588
Success rate (excluding stratigraphic test / service wells)		99%		99%

(1)Includes bitumen wells.

▪Canadian Natural drilled a total of 165 net crude oil and natural gas producer wells in the first six months of 2024, consistent with the Company's strategic decision to focus on longer cycle development opportunities in the first half of 2024 and shorter cycle development opportunities in the second half of 2024.


Canadian Natural Resources Limited			5			Three and six months ended June 30, 2024

North America Exploration and Production


Crude oil and NGLs – excluding Thermal In Situ Oil Sands
	Three Months Ended			Six Months Ended
	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Crude oil and NGLs production (bbl/d)	231,592	237,481	226,202	234,537	230,310
Net wells targeting crude oil	33	38	29	71	89
Net successful wells drilled	33	38	29	71	87
Success rate	100%	100%	100%	100%	98%

▪North America E&P liquids production, excluding thermal in situ, averaged 231,592 bbl/d in Q2/24, an increase of 2% compared to Q2/23 levels, primarily reflecting strong heavy crude oil production offset by natural field declines. As previously outlined in the 2024 budget, the Company has strategically allocated capital for its conventional assets to the latter part of 2024 to better align with incremental market egress, driving strong targeted 2024 exit rates.

•Primary heavy crude oil production averaged 79,141 bbl/d in Q2/24, an increase of 3% from Q2/23 levels, reflecting strong results from multilateral wells on the Company's extensive heavy oil landbase in the Mannville and Clearwater fairways, partially offset by natural field declines.

◦Operating costs(1) in the Company's primary heavy crude oil operations averaged $17.59/bbl (US$12.85/bbl) in Q2/24, a decrease of 12% from Q2/23 levels, primarily reflecting lower energy costs.

◦The Company holds the largest heavy oil landbase in Canada. We continue to maximize the value of this premium asset through our multilateral drilling program.

–Through continuous improvement, Canadian Natural has increased the average length by 16% of its multilateral heavy oil wells to approximately 9,900 meters in 2024 compared to an average budgeted well length of approximately 8,500 meters, lowering cost per meter and increasing reservoir capture.

–As a result of optimized longer well designs and the technical expertise of our teams, average initial peak rates of multilaterals onstream in the first half of 2024 have increased 30% to approximately 230 bbl/d per well compared to budget average initial peak rates of 175 bbl/d per well.

•Pelican Lake production averaged 44,839 bbl/d in Q2/24, a decrease of 5% from Q2/23 levels, reflecting low natural field declines from this long life low decline asset.

◦Operating costs at Pelican Lake averaged $8.92/bbl (US$6.52/bbl) in Q2/24, an increase of 4% compared to Q2/23 levels primarily due to lower production volumes partially offset by lower energy costs.

•North America light crude oil and NGLs production averaged 107,612 bbl/d in Q2/24, an increase of 5% from Q2/23 levels. The increase in Q2/24 was a result of strong drilling results and lower Q2/23 production due to wildfires and a third-party pipeline outage.

◦Operating costs in the Company's North America light crude oil and NGLs operations averaged $13.75/bbl (US$10.05/bbl) in Q2/24, a decrease of 24% from Q2/23 levels, reflecting increased production volumes and lower energy costs.


North America Natural Gas
	Three Months Ended			Six Months Ended
	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Natural gas production (MMcf/d)	2,099	2,135	2,072	2,117	2,100
Net wells targeting natural gas	25	16	21	41	42
Net successful wells drilled	24	16	21	40	42
Success rate	96%	100%	100%	98%	100%

▪Canadian Natural's North America natural gas production averaged 2,099 MMcf/d in Q2/24, comparable to Q2/23 production, primarily reflecting strong results from our Montney and Deep Basin wells offset by natural field declines.

(1)Calculated as production expense divided by respective sales volumes. Natural gas and NGLs production volumes approximate sales volumes.


Canadian Natural Resources Limited			6			Three and six months ended June 30, 2024

•North America natural gas operating costs averaged $1.19/Mcf in Q2/24, a decrease of 12% from Q2/23 levels, primarily reflecting lower energy costs.

▪As previously disclosed, certain natural gas development activity in 2024 was shifted to higher-return multilateral heavy oil wells due to low natural gas prices during the first half of 2024. Concurrently approximately 20 wells of the Company’s remaining planned 2024 natural gas wells will be drilled and curtailed.

•The Company will maintain optionality to bring on production from these wells in late 2024 or early 2025, to align with improved natural gas prices, maximizing value for shareholders.

•Canadian Natural's 2024 corporate annual natural gas production guidance of 2,120 MMcf/d to 2,230 MMcf/d remains unchanged.


Thermal In Situ Oil Sands
	Three Months Ended			Six Months Ended
	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Bitumen production (bbl/d)	268,044	268,155	238,941	268,100	240,902
Net wells targeting bitumen	30	23	23	53	48
Net successful wells drilled	30	23	23	53	48
Success rate	100%	100%	100%	100%	100%

▪Thermal in situ long life low decline production averaged 268,044 bbl/d in Q2/24, an increase of 12% from Q2/23 levels, primarily driven by strong results from Primrose, Kirby and Jackfish pad developments.

•Thermal in situ operating costs averaged $10.95/bbl (US$8.00/bbl) in Q2/24, a decrease of 25% from Q2/23 levels, reflecting higher production volumes and lower energy costs.

•Planned turnarounds at Jackfish and Kirby North facilities were successfully completed ahead of schedule in Q2/24.

▪Canadian Natural has decades of strong capital efficient growth opportunities on its long life low decline thermal in situ assets. As per our 2024 budget, we continue to develop these assets in a disciplined manner to deliver safe and reliable thermal in situ production with the following opportunities:

•At Jackfish, the first of two SAGD pads drilled in 2023 reached full production capacity in Q2/24, ahead of schedule. The second pad is currently producing at full production capacity also ahead of schedule, originally budgeted for Q4/24. Additionally, the Company is targeting to drill one SAGD pad at Jackfish in the second half of 2024, with production from this pad targeted to come on in Q3/25.

•At Primrose, the Company finished drilling one Cyclic Steam Stimulation ("CSS") pad which is targeted to come on production ahead of schedule in late Q4/24, originally targeted for Q2/25. The second pad is currently being drilled and is targeted to come on production in Q2/25. At Wolf Lake, the Company recently drilled one SAGD pad which is targeted to come on production in Q1/25.

▪Canadian Natural has been piloting solvent enhanced oil recovery technology on certain thermal in situ assets with an objective to increase bitumen production while reducing the Steam to Oil Ratio ("SOR") and optimizing solvent recovery. This technology has the potential for application throughout the Company's extensive thermal in situ asset base.

•At Kirby North, the Company began solvent injection in late June 2024. Currently all 8 wells at its commercial scale solvent SAGD pad are targeted to increase solvent injection with subsequent reduction in steam injection over the coming months as the project advances and we continue to monitor solvent recoveries and production trends.

•At Primrose, the Company is continuing to use its solvent enhanced oil recovery pilot in the steam flood area to optimize solvent efficiency and to further evaluate this commercial development opportunity.


Canadian Natural Resources Limited			7			Three and six months ended June 30, 2024

North America Oil Sands Mining and Upgrading

Three Months Ended

Six Months Ended

Jun 30
2024

Mar 31
2024

Jun 30
2023

Jun 30
2024

Jun 30
2023

Synthetic crude oil production (bbl/d) (1)(2)

410,518

445,209

355,246

427,863

406,453

(1)SCO production before royalties and excludes production volumes consumed internally as diesel.

(2)Consists of heavy and light synthetic crude oil products.

▪The Company's world class Oil Sands Mining and Upgrading assets delivered average production of 410,518 bbl/d of high value SCO in Q2/24, an increase of 16% from Q2/23 levels. The increase in production reflected planned turnaround activities successfully completed ahead of schedule at Horizon, compared to Q2/23 which included planned turnarounds at both Horizon and the non-operated Scotford Upgrader.

•Oil Sands Mining and Upgrading operating costs are top tier, averaging $25.95/bbl (US$18.96/bbl) in Q2/24, a decrease of 17% from Q2/23 levels, primarily reflecting higher production volumes from reduced planned turnaround activity and lower energy costs.

▪During the planned turnaround at Horizon in June 2024, the Company successfully completed all tie-ins and commissioning of the reliability enhancement project components.

•The reliability enhancement project at Horizon targets to increase the two year average SCO capacity by approximately 14,000 bbl/d by extending the turnaround schedule to once every two years, with 2025 being the first year of operations without a planned turnaround.

▪Subsequent to quarter end, the Company achieved strong monthly SCO production of approximately 500,000 bbl/d in July 2024. This was primarily a result of high utilization and effective execution of tie-ins and commissioning associated with the Horizon reliability enhancement project completed in June 2024.

▪In July 2024, the Company achieved a milestone at Horizon with the production of the one billionth barrel of bitumen since operations began in 2009.

•Supporting this milestone is the Company's significant total proved SCO reserves at approximately 6.9 billion barrels with an RLI of approximately 44 years as at year end 2023.

▪At AOSP, due to schedule optimization at the Scotford Upgrader in Q2/24, the planned September 2024 turnaround is now targeted to last 39 days compared to the previous 49 day schedule. During the turnaround, the Scotford Upgrader is expected to run at reduced rates with the impact to annual production targeted to be approximately 9,000 bbl/d, a 2,000 bbl/d improvement compared to budget.

•At the Scotford Upgrader, a debottlenecking project is targeted to be completed during the planned turnaround and targets to add incremental capacity at AOSP of approximately 5,600 bbl/d net to Canadian Natural.

▪At Horizon, the Company is progressing the NRUTT project which targets to add incremental production of approximately 6,300 bbl/d of SCO following mechanical completion in Q3/27.

International Exploration and Production


	Three Months Ended			Six Months Ended
	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Crude oil production (bbl/d)	23,912	24,823	26,520	24,367	26,923
Natural gas production (MMcf/d)	11	12	13	12	12

▪International E&P crude oil production volumes averaged 23,912 bbl/d in Q2/24, a decrease of 10% from Q2/23 levels, reflecting natural field declines.


Canadian Natural Resources Limited			8			Three and six months ended June 30, 2024

MARKETING


	Three Months Ended						Six Months Ended
	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Benchmark Commodity Prices
WTI benchmark price (US$/bbl) (1)	$	80.55	$	76.97	$	73.75	$	78.76	$	74.92
WCS heavy differential (discount) to WTI (US$/bbl) (1)	$	(13.54)	$	(19.34)	$	(15.07)	$	(16.44)	$	(19.87)
WCS heavy differential as a percentage of WTI (%) (1)	17%		25%		20%		21%		27%
Condensate benchmark price (US$/bbl)	$	77.11	$	72.79	$	72.28	$	74.95	$	76.03
SCO price (US$/bbl) (1)	$	83.33	$	69.43	$	76.67	$	76.38	$	77.42
SCO premium (discount) to WTI (US$/bbl) (1)	$	2.78	$	(7.54)	$	2.92	$	(2.38)	$	2.50
AECO benchmark price (C$/GJ)	$	1.36	$	1.94	$	2.22	$	1.65	$	3.17
Realized Prices
Exploration & Production liquids realized price (C$/bbl) (2)(3)(4)(5)	$	86.64	$	70.01	$	72.06	$	78.43	$	65.58
SCO realized price (C$/bbl) (1)(3)(4)(5)	$	108.81	$	88.84	$	95.08	$	98.18	$	95.64
Natural gas realized price (C$/Mcf) (4)	$	1.59	$	2.55	$	2.53	$	2.07	$	3.41

(1)West Texas Intermediate ("WTI"); Western Canadian Select ("WCS"); Synthetic Crude Oil ("SCO").

(2)Exploration & Production crude oil and NGLs average realized price excludes SCO.

(3)Pricing is net of blending costs.

(4)Excludes risk management activities.

(5)Non-GAAP ratio. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024 dated July 31, 2024.

▪Canadian Natural has a balanced and diverse product mix of natural gas, NGLs, heavy crude oil, light crude oil, bitumen and SCO.

▪WTI prices averaged US$80.55/bbl in Q2/24, an increase of US$6.80/bbl compared to Q2/23, due to continued supply quota management by OPEC+ and geopolitical concerns in the Middle East.

▪SCO pricing averaged US$83.33/bbl in Q2/24, representing a US$2.78/bbl price premium to WTI, compared to a US$2.92/bbl price premium to WTI in Q2/23.

▪The WCS differential to WTI averaged US$13.54/bbl, narrowing by US$1.53/bbl in Q2/24, compared to US$15.07/bbl in Q2/23, primarily reflecting the start-up of TMX in Q2/24 and stronger US Gulf Coast heavy oil pricing.

▪The North West Redwater ("NWR") refinery primarily utilizes bitumen as feedstock, with production of ultra-low sulphur diesel and other refined products averaging 78,272 bbl/d in Q2/24.

▪AECO natural gas prices in Q2/24 were approximately 39% lower compared to Q2/23 reflecting lower NYMEX benchmark pricing, increased production in the WCSB and higher storage inventories resulting from mild winter weather.

•In 2024, the Company is targeting to use the equivalent of approximately 38% of its budgeted natural gas production in its operations, with approximately 25% targeted to be sold at AECO/Station 2 pricing, and approximately 37% targeted to be exported to other North American and international markets capturing higher natural gas prices, maximizing value from its diversified natural gas marketing portfolio.


Canadian Natural Resources Limited			9			Three and six months ended June 30, 2024

SUSTAINABILITY HIGHLIGHTS

Canadian Natural's diverse portfolio is supported by a large amount of long life low decline assets which have low risk, high value reserves that require low maintenance capital. This allows us to remain flexible with our capital allocation and creates an ideal opportunity to pilot and apply technologies. Canadian Natural continues to invest in a range of technologies like solvents for enhanced recovery and Carbon Capture, Utilization and Storage ("CCUS") projects. Our culture of continuous improvement provides a significant advantage to delivering on our strategy of investing in technologies across our assets, which will enhance the Company’s long-term sustainability.

In June 2024, the Canadian Government amended the Competition Act, resulting in changes to the law around environmental communications. As we look to communicate the important work we are doing to protect the environment or helping to address climate change, there is uncertainty on how this new legislation will be interpreted and applied on a go forward basis. We regret that we are unable to provide an environment and climate update at this time. This legislation does not change our commitment to the environment and to ensuring safe, reliable operations, only the way in which we are publicly communicating these aspects of our business. As we receive additional guidance, we intend to resume environmental and climate-related disclosure.

While we wait for clarity on this legislation, we are proud to share Canadian Natural’s performance in governance, workplace and process safety, and our contributions to people, community and partnerships. Today, Canadian Natural released its 2023 Stewardship Report to Stakeholders in conjunction with Q2/24 results, which is now available on the Company's website at www.cnrl.com. This report displays how Canadian Natural continues to focus on safe, reliable, effective and efficient operations while enhancing our world-class assets by innovating and leveraging technology, and driving continuous improvement across our teams. These efforts include building shared value with communities and Indigenous groups in our operating areas.

Highlights from the Company's 2023 report include:

▪50% reduction in total recordable injury frequency ("TRIF") and an 75% reduction in corporate lost time incident frequency ("LTI") from 2019 to 2023.

▪$502 million invested in research, technology development and deployment in 2023.

▪2.7 million tonnes of CO2e per year total carbon capture capacity.

▪$830 million in contracts secured with Indigenous businesses, a 21% increase from 2022.

▪Approximately $9 billion in payments to governments and local communities in 2023 through royalties, corporate taxes, property taxes and surface and mineral land leases.


Canadian Natural Resources Limited			10			Three and six months ended June 30, 2024

ADVISORY

Special Note Regarding Forward-Looking Statements

Certain statements relating to Canadian Natural Resources Limited (the "Company") in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements can be identified by the words "believe", "anticipate", "expect", "plan", "estimate", "target", "focus", "continue", "could", "intend", "may", "potential", "predict", "should", "will", "objective", "project", "forecast", "goal", "guidance", "outlook", "effort", "seeks", "schedule", "proposed", "aspiration" or expressions of a similar nature suggesting future outcome or statements regarding an outlook. Disclosure related to the Company's strategy or strategic focus, capital budget, expected future commodity pricing, forecast or anticipated production volumes, royalties, production expenses, capital expenditures, abandonment expenditures, income tax expenses, and other targets provided throughout this document and the Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of the Company, including the strength of the Company's balance sheet, the sources and adequacy of the Company's liquidity, and the flexibility of the Company's capital structure, constitute forward-looking statements. Disclosure of plans relating to and expected results of existing and future developments, including, without limitation, those in relation to: the Company's assets at Horizon Oil Sands ("Horizon"), the Athabasca Oil Sands Project ("AOSP"), the Primrose thermal oil projects ("Primrose"), the Pelican Lake water and polymer flood projects ("Pelican Lake"), the Kirby thermal oil sands project ("Kirby"), the Jackfish thermal oil sands project ("Jackfish") and the North West Redwater bitumen upgrader and refinery; construction by third parties of new, or expansion of existing, pipeline capacity or other means of transportation of bitumen, crude oil, natural gas, natural gas liquids ("NGLs") or synthetic crude oil ("SCO") that the Company may be reliant upon to transport its products to market; the abandonment and decommissioning of certain assets and the timing thereof; the development and deployment of technology and technological innovations; the financial capacity of the Company to complete its growth projects and responsibly and sustainably grow in the long-term; the materiality of the impact of tax interpretations and litigation on the Company's results, also constitute forward-looking statements. These forward-looking statements are based on annual budgets and multi-year forecasts, and are reviewed and revised throughout the year as necessary in the context of targeted financial ratios, project returns, product pricing expectations and balance in project risk and time horizons. These statements are not guarantees of future performance and are subject to certain risks. The reader should not place undue reliance on these forward-looking statements as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment based on certain estimates and assumptions that the reserves described can be profitably produced in the future. There are numerous uncertainties inherent in estimating quantities of proved and proved plus probable crude oil, natural gas and NGLs reserves and in projecting future rates of production and the timing of development expenditures. The total amount or timing of actual future production may vary significantly from reserves and production estimates.

The forward-looking statements are based on current expectations, estimates and projections about the Company and the industry in which the Company operates, which speak only as of the earlier of the date such statements were made or as of the date of the report or document in which they are contained, and are subject to known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others: general economic and business conditions (including as a result of the actions of the Organization of the Petroleum Exporting Countries Plus ("OPEC+"), the impact of armed conflicts in the Middle East, the impact of the Russian invasion of Ukraine, increased inflation, and the risk of decreased economic activity resulting from a global recession) which may impact, among other things, demand and supply for and market prices of the Company's products, and the availability and cost of resources required by the Company's operations; volatility of and assumptions regarding crude oil, natural gas and NGLs prices; fluctuations in currency and interest rates; assumptions on which the Company's current targets are based; economic conditions in the countries and regions in which the Company conducts business; political uncertainty, including actions of or against terrorists, insurgent groups or other conflict including conflict between states; the ability of the Company to prevent and recover from a cyberattack, other cyber-related crime and other cyber-related incidents; industry capacity; ability of the Company to implement its business strategy, including exploration and development activities; the Company's ability to implement strategies and leverage technologies to meet climate change initiatives and emissions targets on the expected timelines; the impact of competition; the Company's defense of lawsuits; availability and cost of seismic, drilling and other equipment; ability of the Company to complete capital programs; the Company's ability to secure adequate transportation for its products; unexpected disruptions or delays in the mining, extracting or upgrading of the Company's bitumen products; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; ability of the Company to attract the necessary labour required to build, maintain, and operate its thermal and oil sands mining projects; operating hazards and other difficulties inherent in the exploration for and production and sale of crude oil and natural gas and in the mining, extracting or upgrading the Company's bitumen products; availability and cost of financing; the Company's success of exploration and development activities and its ability to replace and expand crude oil and natural gas reserves; the Company's ability to meet its targeted production levels; timing and success of integrating the business and operations of acquired companies and assets; production levels; imprecision of reserves estimates and estimates of recoverable quantities of crude oil, natural gas and NGLs not currently classified as proved; actions by governmental authorities; government regulations and the expenditures required to comply with them (especially safety, competition, environmental laws and regulations and the impact of climate change initiatives on capital expenditures and production expenses); interpretations of applicable tax and competition laws and regulations; asset retirement obligations; the sufficiency of the Company's liquidity to support its growth strategy and to sustain its operations in the short, medium, and long-term; the strength of the Company's balance sheet; the flexibility of the Company's capital structure; the adequacy of the Company's provision for taxes; the impact of legal proceedings to which the Company is party; and other circumstances affecting revenues and expenses.


Canadian Natural Resources Limited			11			Three and six months ended June 30, 2024

respects from those projected in the forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent upon other factors, and the Company's course of action would depend upon its assessment of the future considering all information then available.

Readers are cautioned that the foregoing list of factors is not exhaustive. Unpredictable or unknown factors not discussed in this document or the Company's MD&A could also have adverse effects on forward-looking statements. Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on information available to it on the date such forward-looking statements are made, no assurances can be given as to future results, levels of activity and achievements. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Except as required by applicable law, the Company assumes no obligation to update forward-looking statements in this document or the Company's MD&A, whether as a result of new information, future events or other factors, or the foregoing factors affecting this information, should circumstances or the Company’s estimates or opinions change.

Special Note Regarding Common Share Split and Comparative Figures

At the Company's Annual and Special Meeting held on May 2, 2024, shareholders passed a Special Resolution approving a two for one common share split effective for shareholders of record as of market close on June 3, 2024. On June 10, 2024, shareholders of record received one additional share for every one common share held, with common shares trading on a split-adjusted basis beginning June 11, 2024. Common share, per common share, dividend, and stock option amounts for periods prior to the two for one common share split have been updated to reflect the common share split.

Special Note Regarding Amendments to the Competition Act (Canada)

On June 20, 2024, amendments to the Competition Act (Canada) came into force with the adoption of Bill C-59, An Act to Implement Certain Provisions of the Fall Economic Statement which impact environmental and climate disclosures by businesses. As a result of these amendments, certain public representations by a business regarding the benefits of the work it is doing to protect or restore the environment or mitigate the environmental and ecological causes or effects of climate change may violate the Competition Act's deceptive marketing practices provisions. These amendments include substantial financial penalties and, effective June 20, 2025, a private right of action which will permit private parties to seek an order from the Competition Tribunal under the deceptive marketing practices provisions. Uncertainty surrounding the interpretation and enforcement of this legislation may expose the Company to increased litigation and financial penalties, the outcome and impacts of which can be difficult to assess or quantify and may have a material adverse effect on the Company's business, reputation, financial condition, and results.

Special Note Regarding Currency, Financial Information and Production

This document should be read in conjunction with the Company's unaudited interim consolidated financial statements (the "financial statements") and the Company's MD&A for the three and six months ended June 30, 2024, and audited consolidated financial statements for the year ended December 31, 2023. All dollar amounts are referenced in millions of Canadian dollars, except where noted otherwise. The Company’s financial statements and MD&A for the three and six months ended June 30, 2024 have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

Production volumes and per unit statistics are presented throughout this document on a "before royalties" or "company gross" basis, and realized prices are net of blending and feedstock costs and exclude the effect of risk management activities. In addition, reference is made to crude oil and natural gas in common units called barrel of oil equivalent ("BOE"). A BOE is derived by converting six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of crude oil (6 Mcf:1 bbl). This conversion may be misleading, particularly if used in isolation, since the 6 Mcf:1 bbl ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In comparing the value ratio using current crude oil prices relative to natural gas prices, the 6 Mcf:1 bbl conversion ratio may be misleading as an indication of value. In addition, for the purposes of this document, crude oil is defined to include the following commodities: light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and SCO. Production on an "after royalties" or "company net" basis is also presented for information purposes only.

Additional information relating to the Company, including its Annual Information Form for the year ended December 31, 2023, is available on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov. Information on the Company's website does not form part of and is not incorporated by reference in the Company's MD&A.

Special Note Regarding Non-GAAP and Other Financial Measures

This document includes references to non-GAAP measures, which include non-GAAP and other financial measures as defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure. These financial measures are used by the Company to evaluate its financial performance, financial position or cash flow and include non-GAAP financial measures, non-GAAP ratios, total of segments measures, capital management measures, and supplementary financial measures. These financial measures are not defined by IFRS and therefore are referred to as non-GAAP and other financial measures. The non-GAAP and other financial measures used by the Company may not be comparable to similar measures presented by other companies, and should not be considered an alternative to or more meaningful than the most directly comparable financial measure presented in the Company's financial statements, as applicable, as an indication of the Company's performance. Descriptions of the Company’s non-GAAP and other financial measures included in this document, and reconciliations to the most directly comparable GAAP measure, as applicable, are provided below as well as in the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024, dated July 31, 2024.


Canadian Natural Resources Limited			12			Three and six months ended June 30, 2024

Break-even WTI Price

The break-even WTI price is a supplementary financial measure that represents the equivalent US dollar WTI price per barrel where the Company's adjusted funds flow is equal to the sum of maintenance capital and dividends. The Company considers the break-even WTI price a key measure in evaluating its performance, as it demonstrates the efficiency and profitability of the Company's activities. The break-even WTI price incorporates the non-GAAP financial measure adjusted funds flow as reconciled in the "Non-GAAP and Other Financial Measures" section of the Company's MD&A. Maintenance capital is a supplementary financial measure that represents the capital required to maintain annual production at prior period levels.

Capital Budget

Capital budget is a forward looking non-GAAP financial measure. The capital budget is based on net capital expenditures (Non-GAAP Financial Measure) and excludes net acquisition costs. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for more details on net capital expenditures.

Capital Efficiency

Capital efficiency is a supplementary financial measure that represents the capital spent to add new or incremental production divided by the current rate of the new or incremental production. It is expressed as a dollar amount per flowing volume of a product ($/bbl/d or $/BOE/d). The Company considers capital efficiency a key measure in evaluating its performance, as it demonstrates the efficiency of the Company's capital investments.

Free Cash Flow Policy in 2023 and 2024

Free cash flow is a non-GAAP financial measure. The Company considers free cash flow a key measure in demonstrating the Company’s ability to generate cash flow to fund future growth through capital investment, pay returns to shareholders and to repay or maintain net debt levels, pursuant to the free cash flow allocation policy.

The Company’s free cash flow is used to determine the target amount of shareholder returns after dividends. The calculation in determining free cash flow varies depending on the Company’s net debt position, and as a result of achieving $10 billion in net debt at the end of 2023, the Company's free cash flow calculation has changed in 2024, when compared to 2023 as follows:

▪Allocation of Free Cash Flow in 2024

As net debt of $10 billion was achieved at the end of 2023, commencing in 2024, the Company will target to return 100% of free cash flow to shareholders. Free cash flow is calculated as adjusted funds flow less dividends on common shares, net capital expenditures and abandonment expenditures. The Company targets to manage the allocation of free cash flow on a forward looking annual basis, while managing working capital and cash management as required.

The Company's free cash flow for the three and six months ended June 30, 2024 is shown below:


	Three Months Ended				Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2024
Adjusted funds flow (1)	$	3,614	$	3,138	$	6,752
Less: Dividends on common shares	1,125			1,076	2,201
Net capital expenditures (2)		1,621		1,113		2,734
Abandonment expenditures		129		162	291
Free cash flow	$	739	$	787	$	1,526

(1)Refer to the descriptions and reconciliations to the most directly comparable GAAP measure, which are provided in the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024, dated July 31, 2024.

(2)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of the Company's MD&A for the three and six months ended June 30, 2024, dated July 31, 2024.

▪Allocation of Free Cash Flow in 2023

When net debt was between $10 billion and $15 billion, as was the case in 2023, approximately 50% of free cash flow was allocated to shareholder returns and 50% was allocated to the balance sheet, less strategic growth/acquisition opportunities. In 2023, free cash flow of $6.9 billion was calculated as adjusted funds flow of $15.3 billion less dividends on common shares of $3.9 billion, base capital expenditures of $4.0 million and abandonment expenditures of $0.5 billion.

Long-term Debt, net

Long-term debt, net (also referred to as net debt) is a capital management measure that is calculated as current and long-term debt less cash and cash equivalents.


($ millions)	Jun 30 2024		Mar 31 2024		Dec 31 2023		Jun 30 2023
Long-term debt	$	10,149	$	11,040	$	10,799	$	12,155
Less: cash and cash equivalents	915		767		877		122
Long-term debt, net	$	9,234	$	10,273	$	9,922	$	12,033


Canadian Natural Resources Limited			13			Three and six months ended June 30, 2024

CONFERENCE CALL

Canadian Natural Resources Limited (TSX-CNQ / NYSE-CNQ) will be issuing its 2024 Second Quarter Earnings Results on Thursday, August 1, 2024 before market open.

A conference call will be held at 9:00 a.m. MDT / 11:00 a.m. EDT on Thursday, August 1, 2024.

Dial-in to the live event:

North America 1-800-717-1738 / International 001-289-514-5100.

Listen to the audio webcast:

Access the audio webcast on the home page of our website, www.cnrl.com.

Conference call playback:

North America 1-888-660-6264 / International 001-289-819-1325 (Passcode: 22190#)

Canadian Natural is a senior crude oil and natural gas production company, with continuing operations in its core areas located in Western Canada, the U.K. portion of the North Sea and Offshore Africa.


CANADIAN NATURAL RESOURCES LIMITED T (403) 517-6700 F (403) 517-7350 E ir@cnrl.com 2100, 855 - 2 Street S.W. Calgary, Alberta, T2P 4J8 www.cnrl.com


SCOTT G. STAUTH President MARK A. STAINTHORPE Chief Financial Officer LANCE J. CASSON Manager, Investor Relations Trading Symbol - CNQ Toronto Stock Exchange New York Stock Exchange


Canadian Natural Resources Limited			14			Three and six months ended June 30, 2024

CANADIAN NATURAL RESOURCES LIMITED


MANAGEMENT'S DISCUSSION & ANALYSIS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024
JULY 31, 2024

MANAGEMENT'S DISCUSSION AND ANALYSIS

ADVISORY

Special Note Regarding Forward-Looking Statements

Certain statements relating to Canadian Natural Resources Limited (the "Company") in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectively referred to herein as "forward-looking statements") within the meaning of applicable securities legislation. Forward-looking statements can be identified by the words "believe", "anticipate", "expect", "plan", "estimate", "target", "focus", "continue", "could", "intend", "may", "potential", "predict", "should", "will", "objective", "project", "forecast", "goal", "guidance", "outlook", "effort", "seeks", "schedule", "proposed", "aspiration" or expressions of a similar nature suggesting future outcome or statements regarding an outlook. Disclosure related to the Company's strategy or strategic focus, capital budget, expected future commodity pricing, forecast or anticipated production volumes, royalties, production expenses, capital expenditures, abandonment expenditures, income tax expenses, and other targets provided throughout this Management's Discussion and Analysis ("MD&A") of the financial condition and results of operations of the Company, including the strength of the Company's balance sheet, the sources and adequacy of the Company's liquidity, and the flexibility of the Company's capital structure, constitute forward-looking statements. Disclosure of plans relating to and expected results of existing and future developments, including, without limitation, those in relation to: the Company's assets at Horizon Oil Sands ("Horizon"), the Athabasca Oil Sands Project ("AOSP"), the Primrose thermal oil projects ("Primrose"), the Pelican Lake water and polymer flood projects ("Pelican Lake"), the Kirby thermal oil sands project ("Kirby"), the Jackfish thermal oil sands project ("Jackfish") and the North West Redwater bitumen upgrader and refinery; construction by third parties of new, or expansion of existing, pipeline capacity or other means of transportation of bitumen, crude oil, natural gas, natural gas liquids ("NGLs") or synthetic crude oil ("SCO") that the Company may be reliant upon to transport its products to market; the abandonment and decommissioning of certain assets and the timing thereof; the development and deployment of technology and technological innovations; the financial capacity of the Company to complete its growth projects and responsibly and sustainably grow in the long-term; the materiality of the impact of tax interpretations and litigation on the Company's results, also constitute forward-looking statements. These forward-looking statements are based on annual budgets and multi-year forecasts, and are reviewed and revised throughout the year as necessary in the context of targeted financial ratios, project returns, product pricing expectations and balance in project risk and time horizons. These statements are not guarantees of future performance and are subject to certain risks. The reader should not place undue reliance on these forward-looking statements as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur. In addition, statements relating to "reserves" are deemed to be forward-looking statements as they involve the implied assessment based on certain estimates and assumptions that the reserves described can be profitably produced in the future. There are numerous uncertainties inherent in estimating quantities of proved and proved plus probable crude oil, natural gas and NGLs reserves and in projecting future rates of production and the timing of development expenditures. The total amount or timing of actual future production may vary significantly from reserves and production estimates.

The forward-looking statements are based on current expectations, estimates and projections about the Company and the industry in which the Company operates, which speak only as of the earlier of the date such statements were made or as of the date of the report or document in which they are contained, and are subject to known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others: general economic and business conditions (including as a result of the actions of the Organization of the Petroleum Exporting Countries Plus ("OPEC+"), the impact of armed conflicts in the Middle East, the impact of the Russian invasion of Ukraine, increased inflation, and the risk of decreased economic activity resulting from a global recession) which may impact, among other things, demand and supply for and market prices of the Company's products, and the availability and cost of resources required by the Company's operations; volatility of and assumptions regarding crude oil, natural gas and NGLs prices; fluctuations in currency and interest rates; assumptions on which the Company's current targets are based; economic conditions in the countries and regions in which the Company conducts business; political uncertainty, including actions of or against terrorists, insurgent groups or other conflict including conflict between states; the ability of the Company to prevent and recover from a cyberattack, other cyber-related crime and other cyber-related incidents; industry capacity; ability of the Company to implement its business strategy, including exploration and development activities; the Company's ability to implement strategies and leverage technologies to meet climate change initiatives and emissions targets on the expected timelines; the impact of competition; the Company's defense of lawsuits; availability and cost of seismic, drilling and other equipment; ability of the Company to complete capital programs; the Company's ability to secure adequate transportation for its products; unexpected disruptions or delays in the mining, extracting or upgrading of the Company's bitumen products; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; ability of the Company to attract the necessary labour required to build, maintain, and operate its thermal and oil sands mining projects; operating hazards and other difficulties inherent in the exploration for and production and sale of crude oil and natural gas and in the mining, extracting or upgrading the Company's bitumen products; availability and cost of financing; the Company's success of exploration and development activities and its ability to replace and expand crude oil and natural gas reserves; the Company's ability to meet its targeted production levels; timing and success of integrating the business and operations of acquired companies and assets; production levels; imprecision of reserves estimates and estimates of recoverable quantities of crude oil, natural gas and NGLs not currently classified as proved; actions by governmental authorities; government regulations and the expenditures required to comply with them (especially safety, competition, environmental laws and regulations, and the impact of climate change initiatives on capital expenditures and production expenses); interpretations of applicable tax and competition laws and regulations; asset retirement obligations; the sufficiency of the Company's liquidity to support its growth strategy and to sustain its operations in the short, medium, and long-term; the strength of the Company's balance sheet; the flexibility of the Company's capital structure; the adequacy of the Company's provision for taxes; the impact of legal proceedings to which the Company is party; and other circumstances affecting revenues and expenses.


Canadian Natural Resources Limited			1			Three and six months ended June 30, 2024

The Company's operations have been, and in the future may be, affected by political developments and by national, federal, provincial, state and local laws and regulations such as restrictions on production, changes in taxes, royalties and other amounts payable to governments or governmental agencies, price or gathering rate controls and environmental protection regulations. Should one or more of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent upon other factors, and the Company's course of action would depend upon its assessment of the future considering all information then available.

Readers are cautioned that the foregoing list of factors is not exhaustive. Unpredictable or unknown factors not discussed in this MD&A could also have adverse effects on forward-looking statements. Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on information available to it on the date such forward-looking statements are made, no assurances can be given as to future results, levels of activity and achievements. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Except as required by applicable law, the Company assumes no obligation to update forward-looking statements in this MD&A, whether as a result of new information, future events or other factors, or the foregoing factors affecting this information, should circumstances or the Company's estimates or opinions change.

Special Note Regarding Non-GAAP and Other Financial Measures

This MD&A includes references to non-GAAP measures, which include non-GAAP and other financial measures as defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure ("NI 52-112"). Non-GAAP measures are used by the Company to evaluate its financial performance, financial position or cash flow. Descriptions of the Company's non-GAAP and other financial measures included in this MD&A, and reconciliations to the most directly comparable GAAP measure, as applicable, are provided in the "Non-GAAP and Other Financial Measures" section of this MD&A.

Special Note Regarding Common Share Split and Comparative Figures

Special Note Regarding Amendments to the Competition Act (Canada)

Special Note Regarding Currency, Financial Information and Production

This MD&A should be read in conjunction with the Company's unaudited interim consolidated financial statements (the "financial statements") for the three and six months ended June 30, 2024, and the Company's MD&A and audited consolidated financial statements for the year ended December 31, 2023. All dollar amounts are referenced in millions of Canadian dollars, except where noted otherwise. The Company's financial statements for the three and six months ended June 30, 2024 and this MD&A have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB").

Production volumes and per unit statistics are presented throughout this MD&A on a "before royalties" or "company gross" basis, and realized prices are net of blending and feedstock costs and exclude the effect of risk management activities. In addition, reference is made to crude oil and natural gas in common units called barrel of oil equivalent ("BOE"). A BOE is derived by converting six thousand cubic feet ("Mcf") of natural gas to one barrel ("bbl") of crude oil (6 Mcf: 1 bbl). This conversion may be misleading, particularly if used in isolation, since the 6 Mcf: 1 bbl ratio is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. In comparing the value ratio using current crude oil prices relative to natural gas prices, the 6 Mcf: 1 bbl conversion ratio may be misleading as an indication of value. In addition, for the purposes of this MD&A, crude oil is defined to include the following commodities: light and medium crude oil, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), and SCO. Production on an "after royalties" or "company net" basis is also presented for information purposes only.

The following discussion and analysis refers primarily to the Company's financial results for the three and six months ended June 30, 2024 in relation to the comparable periods in 2023 and the first quarter of 2024. The accompanying tables form an integral part of this MD&A. Additional information relating to the Company, including its Annual Information Form for the year ended December 31, 2023, is available on SEDAR+ at www.sedarplus.ca, and on EDGAR at www.sec.gov. Information on the Company's website does not form part of and is not incorporated by reference in this MD&A. This MD&A is dated July 31, 2024.


Canadian Natural Resources Limited			2			Three and six months ended June 30, 2024

FINANCIAL HIGHLIGHTS(1)


		Three Months Ended						Six Months Ended
($ millions, except per common share amounts)		Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Product sales (1)		$	10,622	$	9,422	$	8,846	$	20,044	$	18,394
Crude oil and NGLs		$	10,084	$	8,676	$	8,115	$	18,760	$	16,527
Natural gas		$	331	$	529	$	522	$	860	$	1,373

Net earnings		$	1,715	$	987	$	1,463	$	2,702	$	3,262
Per common share	– basic	$	0.80	$	0.46	$	0.67	$	1.26	$	1.49
	– diluted	$	0.80	$	0.46	$	0.66	$	1.25	$	1.47
Adjusted net earnings from operations (2)		$	1,892	$	1,474	$	1,256	$	3,366	$	3,137
Per common share	– basic (3)	$	0.89	$	0.69	$	0.57	$	1.57	$	1.43
	– diluted (3)	$	0.88	$	0.68	$	0.57	$	1.56	$	1.41
Cash flows from operating activities		$	4,084	$	2,868	$	2,745	$	6,952	$	4,040
Adjusted funds flow (2)		$	3,614	$	3,138	$	2,742	$	6,752	$	6,171
Per common share	– basic (3)	$	1.69	$	1.47	$	1.25	$	3.16	$	2.81
	– diluted (3)	$	1.68	$	1.45	$	1.24	$	3.13	$	2.78
Cash flows used in investing activities		$	1,015	$	1,392	$	1,560	$	2,407	$	2,713
Net capital expenditures (4)		$	1,621	$	1,113	$	1,569	$	2,734	$	2,826
Abandonment expenditures		$	129	$	162	$	100	$	291	$	237

(1)Further details related to product sales are disclosed in note 18 to the financial statements.

(2)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(3)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

SUMMARY OF FINANCIAL HIGHLIGHTS

Consolidated Net Earnings and Adjusted Net Earnings from Operations

Net earnings for the six months ended June 30, 2024 were $2,702 million compared with $3,262 million for the six months ended June 30, 2023. Net earnings for the six months ended June 30, 2024 included non-operating losses, net of tax, of $664 million compared with non-operating income of $125 million for the six months ended June 30, 2023 related to the effects of share-based compensation, risk management activities, fluctuations in foreign exchange rates, realized foreign exchange on the repayment of US dollar debt securities, the gain from investments, and a recoverability charge related to the notice to withdraw from Block 11B/12B in South Africa. Excluding these items, adjusted net earnings from operations for the six months ended June 30, 2024 were $3,366 million compared with $3,137 million for the six months ended June 30, 2023.

Net earnings for the second quarter of 2024 were $1,715 million compared with $1,463 million for the second quarter of 2023 and $987 million for the first quarter of 2024. Net earnings for the second quarter of 2024 included non-operating losses, net of tax, of $177 million compared with non-operating income of $207 million for the second quarter of 2023 and non-operating losses of $487 million for the first quarter of 2024 related to the effects of share-based compensation, risk management activities, fluctuations in foreign exchange rates, realized foreign exchange on the repayment of US dollar debt securities, the loss (gain) from investments, and a recoverability charge related to the notice to withdraw from Block 11B/12B in South Africa. Excluding these items, adjusted net earnings from operations for the second quarter of 2024 were $1,892 million compared with $1,256 million for the second quarter of 2023 and $1,474 million for the first quarter of 2024.

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split. Further details are disclosed in the Advisory section of this MD&A and in note 1 of the financial statements.


Canadian Natural Resources Limited			3			Three and six months ended June 30, 2024

The movements in net earnings and adjusted net earnings from operations for the three and six months ended June 30, 2024 from the three and six months ended June 30, 2023 primarily reflected:

▪higher crude oil and NGLs sales volumes and netbacks(1) in the North America Exploration and Production segment; and

▪higher realized SCO pricing(1) and sales volumes in the Oil Sands Mining and Upgrading segment;

partially offset by:

▪lower natural gas pricing in the North America Exploration and Production segment.

The increase in net earnings and adjusted net earnings from operations for the second quarter of 2024 from the first quarter of 2024 primarily reflected:

▪higher crude oil and NGLs pricing in the North America Exploration and Production segment; and

▪higher realized SCO sales pricing in the Oil Sands Mining and Upgrading segment;

partially offset by:

▪lower SCO sales volumes in the Oil Sands Mining and Upgrading segment; and

▪lower natural gas pricing in the North America Exploration and Production segment.

The impacts of share-based compensation, risk management activities, foreign exchange loss (gain), and the loss (gain) from investment also contributed to the movements in net earnings. These items are discussed in detail in the relevant sections of this MD&A.

Cash Flows from Operating Activities and Adjusted Funds Flow

Cash flows from operating activities for the six months ended June 30, 2024 were $6,952 million compared with $4,040 million for the six months ended June 30, 2023. Cash flows from operating activities for the second quarter of 2024 were $4,084 million compared with $2,745 million for the second quarter of 2023 and $2,868 million for the first quarter of 2024. The increase in cash flows from operating activities from the comparable periods were primarily due to the factors previously noted related to the fluctuations in adjusted net earnings from operations, together with the impact of net changes in non-cash working capital.

Adjusted funds flow for the six months ended June 30, 2024 was $6,752 million compared with $6,171 million for the six months ended June 30, 2023. Adjusted funds flow for the second quarter of 2024 was $3,614 million compared with $2,742 million for the second quarter of 2023 and $3,138 million for the first quarter of 2024. The increase in adjusted funds flow from the comparable periods was primarily due to the factors noted above related to the fluctuations in cash flows from operating activities, excluding the impact of the net change in non-cash working capital, abandonment expenditures, and movements in other long-term assets, including the unamortized cost of the share bonus program, accrued interest on the deferred Petroleum Revenue Tax ("PRT") recovery, and prepaid cost of service tolls.

Production Volumes

Crude oil and NGLs production before royalties for the second quarter of 2024 of 934,066 bbl/d increased 10% from 846,909 bbl/d for the second quarter of 2023, and decreased 4% from 975,668 bbl/d for the first quarter of 2024. Natural gas production before royalties for the second quarter of 2024 of 2,110 MMcf/d was comparable with 2,085 MMcf/d for the second quarter of 2023 and 2,147 MMcf/d for the first quarter of 2024. Total production before royalties for the second quarter of 2024 of 1,285,798 BOE/d increased 8% from 1,194,326 BOE/d for the second quarter of 2023, and decreased 4% from 1,333,502 BOE/d for the first quarter of 2024. Crude oil and NGLs and natural gas production volumes are discussed in detail in the "Daily Production, before royalties" section of this MD&A.

(1)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.


Canadian Natural Resources Limited			4			Three and six months ended June 30, 2024

Product Prices

In the Company's Exploration and Production segments, realized crude oil and NGLs prices(1) averaged $86.64 per bbl for the second quarter of 2024, an increase of 20% from $72.06 per bbl for the second quarter of 2023, and an increase of 24% from $70.01 per bbl for the first quarter of 2024. The realized natural gas price decreased 37% to average $1.59 per Mcf for the second quarter of 2024 from $2.53 per Mcf for the second quarter of 2023, and decreased 38% from $2.55 per Mcf for the first quarter of 2024. In the Oil Sands Mining and Upgrading segment, the Company's realized SCO sales price increased 14% to average $108.81 per bbl for the second quarter of 2024 from $95.08 per bbl for the second quarter of 2023, and increased 22% from $88.84 per bbl for the first quarter of 2024. The Company's realized pricing reflected prevailing benchmark pricing. Crude oil and NGLs and natural gas prices are discussed in detail in the "Business Environment", "Realized Product Prices – Exploration and Production", and the "Oil Sands Mining and Upgrading" sections of this MD&A.

Production Expense

In the Company's Exploration and Production segments, crude oil and NGLs production expense(2) averaged $14.54 per bbl for the second quarter of 2024, a decrease of 21% from $18.38 per bbl for the second quarter of 2023, and a decrease of 13% from $16.66 per bbl for the first quarter of 2024. Natural gas production expense(2) averaged $1.21 per Mcf for the second quarter of 2024, a decrease of 12% from $1.37 per Mcf for the second quarter of 2023, and a decrease of 7% from $1.30 per Mcf for the first quarter of 2024. In the Oil Sands Mining and Upgrading segment, production expense(2) averaged $25.95 per bbl for the second quarter of 2024, a decrease of 17% from $31.28 per bbl for the second quarter of 2023, and an increase of 4% from $24.85 per bbl for the first quarter of 2024. Crude oil and NGLs and natural gas production expense is discussed in detail in the "Production Expense – Exploration and Production" and the "Oil Sands Mining and Upgrading" sections of this MD&A.

SUMMARY OF QUARTERLY FINANCIAL RESULTS

The following is a summary of the Company's quarterly financial results for the eight most recently completed quarters:



($ millions, except per common share amounts)	Jun 30 2024		Mar 31 2024		Dec 31 2023		Sep 30 2023
Product sales (1)	$	10,622	$	9,422	$	10,679	$	11,762
Crude oil and NGLs	$	10,084	$	8,676	$	9,829	$	10,944
Natural gas	$	331	$	529	$	603	$	599
Net earnings	$	1,715	$	987	$	2,627	$	2,344
Net earnings per common share (2)
– basic	$	0.80	$	0.46	$	1.22	$	1.08
– diluted	$	0.80	$	0.46	$	1.21	$	1.06

($ millions, except per common share amounts)	Jun 30 2023		Mar 31 2023		Dec 31 2022		Sep 30 2022
Product sales (1)	$	8,846	$	9,548	$	11,012	$	12,574
Crude oil and NGLs	$	8,115	$	8,412	$	9,508	$	11,001
Natural gas	$	522	$	851	$	1,287	$	1,342
Net earnings	$	1,463	$	1,799	$	1,520	$	2,814
Net earnings per common share (2)
– basic	$	0.67	$	0.82	$	0.69	$	1.26
– diluted	$	0.66	$	0.81	$	0.68	$	1.24

(1)Further details related to product sales for the three months ended June 30, 2024 and 2023 are disclosed in note 18 to the financial statements.

(2)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split. Further details are disclosed in the Advisory section of this MD&A and in note 1 of the financial statements.

(1)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(2)Calculated as respective production expense divided by respective sales volumes.


Canadian Natural Resources Limited			5			Three and six months ended June 30, 2024

Volatility in the quarterly net earnings over the eight most recently completed quarters was primarily due to:

▪Crude oil pricing – Fluctuations in global supply/demand including crude oil production levels from OPEC+ and its impact on world supply, the impact of geopolitical and market uncertainties (including those due to the Russian invasion of Ukraine and conflict in the Middle East) on worldwide benchmark pricing, the impact of shale oil production in North America, the impact of the start-up of the Trans Mountain Expansion ("TMX") pipeline, the impact of the Western Canadian Select ("WCS") Heavy Differential from the West Texas Intermediate reference location at Cushing, Oklahoma ("WTI") in North America, and the impact of the differential between WTI and Dated Brent ("Brent") benchmark pricing in the International segments.

▪Natural gas pricing – Fluctuations in both the demand for natural gas and inventory storage levels, the impact of third-party pipeline maintenance and outages, the impact of geopolitical and market uncertainties, the impact of seasonal conditions, and the impact of shale gas production in the US.

▪Crude oil and NGLs sales volumes – Fluctuations in production from the Kirby and Jackfish thermal oil sands projects, fluctuations in production due to the cyclic nature of the Primrose thermal oil projects, fluctuations in the Company's drilling program in the North America Exploration and Production segment, natural field decline rates, the impact of turnarounds and pitstops in the Oil Sands Mining and Upgrading segment, wildfires and a third-party pipeline outage in 2023 in the North America Exploration and Production segment. Sales volumes also reflected fluctuations due to timing of liftings and maintenance activities in the International segments.

▪Natural gas sales volumes – Fluctuations in production due to the Company's drilling program in the North America Exploration and Production segment, natural field decline rates, the impact of seasonal conditions, wildfires and a third-party pipeline outage in 2023 in the North America Exploration and Production segment.

▪Production expense – Fluctuations primarily due to the impacts of the demand and cost for services, fluctuations in product mix and production volumes, seasonal conditions, increased carbon tax, fluctuating energy costs, inflationary cost pressures, cost optimizations across all segments, turnarounds and pitstops in the Oil Sands Mining and Upgrading segment, and maintenance activities in the International segments.

▪Depletion, depreciation and amortization expense – Fluctuations due to changes in sales volumes, proved reserves, asset retirement obligations, finding and development costs associated with crude oil and natural gas exploration, estimated future costs to develop the Company's proved undeveloped reserves, fluctuations in International sales volumes subject to higher depletion rates, the impact of turnarounds and pitstops in the Oil Sands Mining and Upgrading segment, a recoverability charge related to the notice to withdraw from Block 11B/12B in South Africa, a recoverability charge at December 31, 2023 relating to the increase in estimate of future abandonment costs for the planned decommissioning activities at the Ninian field in the North Sea, and a recoverability charge at December 31, 2022 relating to the de-booking of reserves at the Ninian field in the North Sea.

▪Share-based compensation – Fluctuations due to the measurement of fair market value of the Company's share-based compensation liability.

▪Risk management – Fluctuations due to the recognition of gains and losses from the mark-to-market and subsequent settlement of the Company's risk management activities.

▪Interest expense – Fluctuations due to changing long-term debt levels, and the impact of movements in benchmark interest rates on outstanding floating rate long-term debt and accrued interest on the deferred PRT recovery.

▪Foreign exchange – Fluctuations in the Canadian dollar relative to the US dollar, which impact the realized price the Company receives for its crude oil and natural gas sales, as sales prices are based predominantly on US dollar denominated benchmarks. Realized and unrealized foreign exchange gains and losses are also recorded with respect to US dollar denominated debt, partially offset by the impact of any cross currency swap hedges outstanding.

▪Loss (gain) from investment – Fluctuations due to the loss (gain) from the investment in PrairieSky Royalty Ltd. shares.

BUSINESS ENVIRONMENT

Global crude oil benchmark pricing gained momentum in the second quarter of 2024 as a result of supply quota management by OPEC+ and continued geopolitical tensions in the Middle East. The start-up of TMX in the second quarter of 2024 also contributed to a narrowing of the WCS differential with corresponding benefits to realized pricing. Although inflationary pressures are easing, the Company has experienced and may continue to experience inflationary pressures on its operating and capital expenditures in addition to higher than normal fluctuations in commodity prices and interest rates.


Canadian Natural Resources Limited			6			Three and six months ended June 30, 2024

Liquidity

The Company remains committed to maintaining a strong balance sheet, adequate available liquidity, and a flexible capital structure. Refer to the "Liquidity and Capital Resources" section of this MD&A for further details.

Benchmark Commodity Prices


	Three Months Ended						Six Months Ended
(Average for the period)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
WTI benchmark price (US$/bbl)	$	80.55	$	76.97	$	73.75	$	78.76	$	74.92
Dated Brent benchmark price (US$/bbl)	$	84.90	$	83.23	$	78.37	$	84.07	$	79.79
WCS Heavy Differential from WTI (US$/bbl)	$	13.54	$	19.34	$	15.07	$	16.44	$	19.87
SCO price (US$/bbl)	$	83.33	$	69.43	$	76.67	$	76.38	$	77.42
Condensate benchmark price (US$/bbl)	$	77.11	$	72.79	$	72.28	$	74.95	$	76.03

NYMEX benchmark price (US$/MMBtu)	$	1.89	$	2.24	$	2.10	$	2.06	$	2.76
AECO benchmark price (C$/GJ)	$	1.36	$	1.94	$	2.22	$	1.65	$	3.17
US/Canadian dollar average exchange rate (US$)	$	0.7308	$	0.7415	$	0.7447	$	0.7360	$	0.7420

Substantially all of the Company's production is sold based on US dollar benchmark pricing. Specifically, crude oil is marketed based on WTI and Brent indices. Canadian natural gas pricing is primarily based on AECO reference pricing, which is derived from the NYMEX reference pricing and adjusted for its basis or location differential to the NYMEX delivery point at Henry Hub. The Company’s realized prices are directly impacted by fluctuations in foreign exchange rates resulting in product revenues being impacted by changes in Canadian dollar sales prices relative to the US dollar benchmark prices.

Crude oil sales contracts in North America are typically based on WTI benchmark pricing. WTI averaged US$78.76 per bbl for the six months ended June 30, 2024, an increase of 5% from US$74.92 per bbl for the six months ended June 30, 2023. WTI averaged US$80.55 per bbl for the second quarter of 2024, an increase of 9% from US$73.75 per bbl for the second quarter of 2023, and an increase of 5% from US$76.97 per bbl for the first quarter of 2024.

Crude oil sales contracts for the Company's International segments are typically based on Brent pricing, which is representative of international markets and overall global supply and demand. Brent averaged US$84.07 per bbl for the six months ended June 30, 2024, an increase of 5% from US$79.79 per bbl for the six months ended June 30, 2023. Brent averaged US$84.90 per bbl for the second quarter of 2024, an increase of 8% from US$78.37 per bbl for the second quarter of 2023, and comparable with US$83.23 per bbl for the first quarter of 2024.

The increase in WTI and Brent benchmark pricing for the three and six months ended June 30, 2024 from the comparable periods in 2023 reflected continued supply quota management by OPEC+ and geopolitical concerns in the Middle East. The increase in WTI benchmark pricing for the second quarter of 2024 from the first quarter of 2024 reflected stronger seasonal demand outlooks.

The WCS Heavy Differential averaged US$16.44 per bbl for the six months ended June 30, 2024, compared with US$19.87 per bbl for the six months ended June 30, 2023. The WCS Heavy Differential averaged US$13.54 per bbl for the second quarter of 2024, compared with US$15.07 per bbl for the second quarter of 2023, and US$19.34 per bbl for the first quarter of 2024. The narrowing of the WCS Heavy Differential for the three and six months ended June 30, 2024 from the comparable periods in 2023 reflected the start-up of the TMX pipeline in the second quarter of 2024, combined with stronger US Gulf Coast heavy oil pricing. The narrowing of the WCS Heavy Differential for the second quarter of 2024 from the first quarter of 2024 reflected the start-up of the TMX pipeline as well as maintenance activities in the Western Canada Sedimentary Basin ("WCSB").

The SCO price averaged US$76.38 per bbl for the six months ended June 30, 2024, comparable with US$77.42 per bbl for the six months ended June 30, 2023. The SCO price averaged US$83.33 per bbl for the second quarter of 2024, an increase of 9% from US$76.67 per bbl for the second quarter of 2023, and an increase of 20% from US$69.43 per bbl for the first quarter of 2024. The increase in SCO pricing for the second quarter of 2024 from the second quarter of 2023 primarily reflected increased WTI benchmark pricing. The increase in SCO pricing for the second quarter of 2024 from the first quarter of 2024 reflected the SCO differential strengthening as a result of upgrader maintenance in the WCSB and the start-up of the TMX pipeline.

(1)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.


Canadian Natural Resources Limited			7			Three and six months ended June 30, 2024

NYMEX natural gas prices averaged US$2.06 per MMBtu for the six months ended June 30, 2024, a decrease of 25% from US$2.76 per MMBtu for the six months ended June 30, 2023. NYMEX natural gas prices averaged US$1.89 per MMBtu for the second quarter of 2024, a decrease of 10% from US$2.10 per MMBtu for the second quarter of 2023, and a decrease of 16% from US$2.24 per MMBtu for the first quarter of 2024. The decrease in NYMEX natural gas prices for three and six months ended June 30, 2024 from the comparable periods reflected mild winter weather that reduced heating demand and drove North American and European inventory levels above the five year average. Additionally, reduced Liquefied Natural Gas ("LNG") exports from the US Gulf Coast, as a result of maintenance, contributed to downward pressure on prices.

AECO natural gas prices averaged $1.65 per GJ for the six months ended June 30, 2024, a decrease of 48% from $3.17 per GJ for the six months ended June 30, 2023. AECO natural gas prices averaged $1.36 per GJ for the second quarter of 2024, a decrease of 39% from $2.22 per GJ for the second quarter of 2023, and a decrease of 30% from $1.94 per GJ for the first quarter of 2024. The decrease in AECO natural gas prices for three and six months ended June 30, 2024 from the comparable periods reflected decreased NYMEX benchmark pricing, increased production in the WCSB, and higher storage inventories resulting from mild winter weather in 2024.

DAILY PRODUCTION, before royalties


	Three Months Ended			Six Months Ended
	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Crude oil and NGLs (bbl/d)
North America – Exploration and Production	499,636	505,636	465,143	502,636	471,212
North America – Oil Sands Mining and Upgrading (1)	410,518	445,209	355,246	427,863	406,453
International – Exploration and Production
North Sea	11,295	12,433	12,699	11,864	12,968
Offshore Africa	12,617	12,390	13,821	12,503	13,955
Total International (2)	23,912	24,823	26,520	24,367	26,923
Total crude oil and NGLs	934,066	975,668	846,909	954,866	904,588
Natural gas (MMcf/d) (3)
North America	2,099	2,135	2,072	2,117	2,100
International
North Sea	2	1	2	2	2
Offshore Africa	9	11	11	10	10
Total International	11	12	13	12	12
Total Natural gas	2,110	2,147	2,085	2,129	2,112
Total Barrels of oil equivalent (BOE/d)	1,285,798	1,333,502	1,194,326	1,309,649	1,256,513
Product mix
Light and medium crude oil and NGLs	10%	11%	11%	10%	11%
Pelican Lake heavy crude oil	4%	3%	4%	3%	4%
Primary heavy crude oil	6%	6%	6%	6%	6%
Bitumen (thermal oil)	21%	20%	20%	21%	19%
Synthetic crude oil (1)	32%	33%	30%	33%	32%
Natural gas	27%	27%	29%	27%	28%
Percentage of product sales (1) (4) (5)
Crude oil and NGLs	97%	94%	93%	95%	91%
Natural gas	3%	6%	7%	5%	9%

(1)SCO production before royalties excludes SCO consumed internally as diesel.

(2)"International" includes North Sea and Offshore Africa Exploration and Production segments in all instances used in this MD&A.

(3)Natural gas production volumes approximate sales volumes.

(4)Net of blending and feedstock costs and excluding risk management activities.

(5)Excluding Midstream and Refining revenue.


Canadian Natural Resources Limited			8			Three and six months ended June 30, 2024

DAILY PRODUCTION, net of royalties


	Three Months Ended			Six Months Ended
	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Crude oil and NGLs (bbl/d)
North America – Exploration and Production	394,025	413,752	388,670	403,888	392,555
North America – Oil Sands Mining and Upgrading (1)	332,272	370,837	301,239	351,554	356,033
International – Exploration and Production
North Sea	11,270	12,406	12,654	11,838	12,945
Offshore Africa	12,057	11,755	12,343	11,906	12,540
Total International	23,327	24,161	24,997	23,744	25,485
Total Crude oil and NGLs	749,624	808,750	714,906	779,186	774,073
Natural gas (MMcf/d)
North America	2,077	2,049	2,014	2,063	2,001
International
North Sea	2	1	2	2	2
Offshore Africa	9	11	10	10	10
Total International	11	12	12	12	12
Total Natural gas	2,088	2,061	2,026	2,075	2,013
Total Barrels of oil equivalent (BOE/d)	1,097,693	1,152,258	1,052,602	1,124,974	1,109,635

(1)SCO production net of royalties excludes SCO consumed internally as diesel.

The Company's business approach is to maintain large project inventories and production diversification among each of the commodities it produces; namely light and medium crude oil and NGLs, primary heavy crude oil, Pelican Lake heavy crude oil, bitumen (thermal oil), SCO, and natural gas.

Crude oil and NGLs production before royalties for the six months ended June 30, 2024 averaged 954,866 bbl/d, an increase of 6% from 904,588 bbl/d for the six months ended June 30, 2023. Crude oil and NGLs production before royalties for the second quarter of 2024 averaged 934,066 bbl/d, an increase of 10% from 846,909 bbl/d for the second quarter of 2023, and a decrease of 4% from 975,668 bbl/d for the first quarter of 2024. The increase in crude oil and NGLs production for the three and six months ended June 30, 2024 from the comparable periods in 2023 reflected higher thermal oil production due to the cyclical nature of Primrose as well as pad additions in the North America Exploration and Production segment, partially offset by the planned turnaround at Horizon successfully completed in the second quarter of 2024 in the Oil Sands Mining and Upgrading segment. The increase in crude oil and NGLs production for the second quarter of 2024 from the second quarter of 2023 also reflected turnarounds at both Horizon and the non-operated Scotford Upgrader ("Scotford") in the second quarter of 2023. The decrease in crude oil and NGLs production for the second quarter of 2024 from the first quarter of 2024 primarily reflected lower production in the Oil Sands Mining and Upgrading segment due to the planned turnaround at Horizon.

Annual crude oil and NGLs production for 2024 is targeted to average between 977,000 bbl/d and 1,008,000 bbl/d. Production targets constitute forward-looking statements. Refer to the "Advisory" section of this MD&A for further details on forward-looking statements.

Natural gas production before royalties for the six months ended June 30, 2024 averaged 2,129 MMcf/d, comparable with 2,112 MMcf/d for the six months ended June 30, 2023. Natural gas production before royalties for the second quarter of 2024 averaged 2,110 MMcf/d, comparable with 2,085 MMcf/d for the second quarter of 2023 and 2,147 MMcf/d for the first quarter of 2024. Natural gas production for the three and six months ended June 30, 2024 from the comparable periods in 2023 reflected the planned drilling program together with natural field declines in 2024, and the impact of wildfires and a third party pipeline outage in 2023.

Annual natural gas production for 2024 is targeted to average between 2,120 MMcf/d and 2,230 MMcf/d. Production targets constitute forward-looking statements. Refer to the "Advisory" section of this MD&A for further details on forward-looking statements.


Canadian Natural Resources Limited			9			Three and six months ended June 30, 2024

North America – Exploration and Production

North America crude oil and NGLs production before royalties for the six months ended June 30, 2024 averaged 502,636 bbl/d, an increase of 7% from 471,212 bbl/d for the six months ended June 30, 2023. North America crude oil and NGLs production before royalties for the second quarter of 2024 of 499,636 bbl/d increased 7% from 465,143 bbl/d for the second quarter of 2023 and was comparable with 505,636 bbl/d for the first quarter of 2024. The increase in North America crude oil and NGLs production for the six months ended June 30, 2024 from the comparable period in 2023 primarily reflected pad additions in thermal in situ, partially offset by natural field declines. The increase in North America crude oil and NGLs production for the second quarter of 2024 from the second quarter of 2023 also reflected higher thermal oil production due to the cyclical nature of Primrose, and the impact of wildfires and a third party pipeline outage in the second quarter of 2023, partially offset by the planned turnarounds at Kirby and Jackfish successfully completed in the second quarter of 2024.

The Company's thermal in situ assets continued to demonstrate long life low decline production before royalties, averaging 268,044 bbl/d for the second quarter of 2024, an increase of 12% from 238,941 bbl/d for the second quarter of 2023, and comparable with 268,155 bbl/d for the first quarter of 2024. The increase in thermal in situ production in the second quarter of 2024 from the second quarter of 2023 primarily reflected higher production due to the cyclical nature of Primrose as well as pad additions, partially offset by the planned turnarounds at Kirby and Jackfish completed in the second quarter of 2024.

Pelican Lake heavy crude oil production before royalties for the second quarter of 2024 averaged 44,839 bbl/d, a decrease of 5% from 47,151 bbl/d for the second quarter of 2023, and comparable with 45,145 bbl/d for the first quarter of 2024, demonstrating Pelican Lake's long life low decline production.

North America natural gas production before royalties for the six months ended June 30, 2024 averaged 2,117 MMcf/d, comparable with 2,100 MMcf/d for the six months ended June 30, 2023. Natural gas production before royalties averaged 2,099 MMcf/d for the second quarter of 2024, comparable with 2,072 MMcf/d for the second quarter of 2023 and 2,135 MMcf/d for the first quarter of 2024. Natural gas production for the three and six months ended June 30, 2024 from the comparable periods in 2023 reflected the planned drilling program together with natural field declines in 2024, and the impact of wildfires and a third party pipeline outage in 2023.

North America – Oil Sands Mining and Upgrading

SCO production before royalties for the six months ended June 30, 2024 averaged 427,863 bbl/d, an increase of 5% from 406,453 bbl/d for the six months ended June 30, 2023. SCO production before royalties for the second quarter of 2024 averaged 410,518 bbl/d, an increase of 16% from 355,246 bbl/d for the second quarter of 2023, and a decrease of 8% from 445,209 bbl/d for the first quarter of 2024. SCO production for the three and six months ended June 30, 2024 reflected the successful completion of the planned turnaround at Horizon in the second quarter of 2024, as well as turnaround activities at both Horizon and Scotford in the second quarter of 2023.

International – Exploration and Production

International crude oil and NGLs production before royalties for the six months ended June 30, 2024 averaged 24,367 bbl/d, a decrease of 9% from 26,923 bbl/d for the six months ended June 30, 2023. International crude oil and NGLs production before royalties for the second quarter of 2024 averaged 23,912 bbl/d, a decrease of 10% from 26,520 bbl/d for the second quarter of 2023, and a decrease of 4% from 24,823 bbl/d for the first quarter of 2024. The decrease in International crude oil and NGLs production for the three and six months ended June 30, 2024 from the comparable periods primarily reflected natural field declines combined with the impact of maintenance activities in both comparable periods.

International Crude Oil Inventory Volumes

The Company recognizes revenue on its crude oil production when control of the product passes to the customer and delivery has taken place. Revenue has not been recognized in the International segments on crude oil production held in various storage facilities or floating production storage and offloading vessels ("FPSOs"), as follows:


(bbl)	Jun 30 2024	Mar 31 2024	Jun 30 2023


International	1,145,760	833,654	816,475


Canadian Natural Resources Limited			10			Three and six months ended June 30, 2024

OPERATING HIGHLIGHTS – EXPLORATION AND PRODUCTION


	Three Months Ended						Six Months Ended
	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Crude oil and NGLs ($/bbl) (1)
Realized price (2)	$	86.64	$	70.01	$	72.06	$	78.43	$	65.58
Transportation (2)	5.98		4.63		4.57		5.31		4.54
Realized price, net of transportation (2)	80.66		65.38		67.49		73.12		61.04
Royalties (3)	17.45		12.09		11.09		14.80		10.60
Production expense (4)	14.54		16.66		18.38		15.59		17.67
Netback (2)	$	48.67	$	36.63	$	38.02	$	42.73	$	32.77
Natural gas ($/Mcf) (1)
Realized price (5)	$	1.59	$	2.55	$	2.53	$	2.07	$	3.41
Transportation (6)	0.63		0.64		0.58		0.63		0.57
Realized price, net of transportation	0.96		1.91		1.95		1.44		2.84
Royalties (3)	0.02		0.10		0.07		0.06		0.17
Production expense (4)	1.21		1.30		1.37		1.26		1.42
Netback	$	(0.27)	$	0.51	$	0.51	$	0.12	$	1.25
Barrels of oil equivalent ($/BOE) (1)
Realized price (2)	$	55.84	$	47.60	$	48.94	$	51.74	$	46.98
Transportation (2)	5.09		4.31		4.11		4.71		4.08
Realized price, net of transportation (2)	50.75		43.29		44.83		47.03		42.90
Royalties (3)	10.53		7.39		6.75		8.97		6.65
Production expense (4)	11.64		13.03		14.24		12.33		13.88
Netback (2)	$	28.58	$	22.87	$	23.84	$	25.73	$	22.37

(1)For crude oil and NGLs and BOE sales volumes, refer to the "Non-GAAP and Other Financial Measures" section of this MD&A. For natural gas sales volumes, refer to the "Daily Production, before royalties" section of this MD&A.

(2)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(3)Calculated as royalties divided by respective sales volumes.

(4)Calculated as production expense divided by respective sales volumes.

(5)Calculated as natural gas sales divided by natural gas sales volumes.

(6)Calculated as natural gas transportation expense divided by natural gas sales volumes.


Canadian Natural Resources Limited			11			Three and six months ended June 30, 2024

REALIZED PRODUCT PRICES – EXPLORATION AND PRODUCTION


	Three Months Ended						Six Months Ended
	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Crude oil and NGLs ($/bbl) (1)
North America (2)	$	85.49	$	68.14	$	69.44	$	76.94	$	63.66
International average (3)	$	115.27	$	112.94	$	103.64	$	114.08	$	102.58
North Sea (3)	$	115.02	$	113.75	$	106.39	$	114.37	$	106.39
Offshore Africa (3)	$	115.67	$	111.59	$	100.68	$	113.59	$	99.94
Crude oil and NGLs average (2)	$	86.64	$	70.01	$	72.06	$	78.43	$	65.58

Natural gas ($/Mcf) (1) (3)
North America	$	1.53	$	2.50	$	2.47	$	2.02	$	3.35
International average	$	11.87	$	12.13	$	13.16	$	12.01	$	13.45
North Sea	$	9.79	$	11.48	$	9.48	$	10.58	$	10.88
Offshore Africa	$	12.24	$	12.22	$	13.71	$	12.23	$	13.97
Natural gas average	$	1.59	$	2.55	$	2.53	$	2.07	$	3.41

Average ($/BOE) (1) (2)	$	55.84	$	47.60	$	48.94	$	51.74	$	46.98

(2)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(3)Calculated as crude oil and NGLs sales and natural gas sales divided by respective sales volumes.

North America

North America realized crude oil and NGLs prices increased 21% to average $76.94 per bbl for the six months ended June 30, 2024 from $63.66 per bbl for the six months ended June 30, 2023. North America realized crude oil and NGLs prices averaged $85.49 per bbl for the second quarter of 2024, an increase of 23% from $69.44 per bbl for the second quarter of 2023, and an increase of 25% from $68.14 per bbl for the first quarter of 2024. The increase for the three and six months ended June 30, 2024 from the comparable periods primarily reflected the narrowing of the WCS Heavy Differential due to the start-up of the TMX pipeline and stronger US Gulf Coast heavy oil pricing. The Company continues to focus on its crude oil blending marketing strategy and in the second quarter of 2024 contributed approximately 222,000 bbl/d of heavy crude oil blends to the WCS stream.

North America realized natural gas prices decreased 40% to average $2.02 per Mcf for the six months ended June 30, 2024 from $3.35 per Mcf for the six months ended June 30, 2023. North America realized natural gas prices decreased 38% to average $1.53 per Mcf for the second quarter of 2024 from $2.47 per Mcf for the second quarter of 2023, and decreased 39% from $2.50 per Mcf for the first quarter of 2024. The decrease in North America realized natural gas prices for the three and six months ended June 30, 2024 from the comparable periods primarily reflected lower AECO benchmark and export pricing.

Comparisons of the prices received in North America Exploration and Production by product type were as follows:


	Three Months Ended
(Quarterly average)	Jun 30 2024		Mar 31 2024		Jun 30 2023
Wellhead Price (1)
Light and medium crude oil and NGLs ($/bbl)	$	74.90	$	66.68	$	68.11
Pelican Lake heavy crude oil ($/bbl)	$	92.42	$	74.69	$	76.66
Primary heavy crude oil ($/bbl)	$	91.27	$	74.37	$	76.20
Bitumen (thermal oil) ($/bbl)	$	86.84	$	65.83	$	66.51
Natural gas ($/Mcf)	$	1.53	$	2.50	$	2.47

(1)Amounts expressed on a per unit basis are based on sales volumes of the respective product type.


Canadian Natural Resources Limited			12			Three and six months ended June 30, 2024

International

International realized crude oil and NGLs prices increased 11% to average $114.08 per bbl for the six months ended June 30, 2024 from $102.58 per bbl for the six months ended June 30, 2023. International realized crude oil and NGLs prices increased 11% to average $115.27 per bbl for the second quarter of 2024 from $103.64 per bbl for the second quarter of 2023, and was comparable with $112.94 per bbl for the first quarter of 2024. Realized crude oil and NGLs prices per bbl in any particular period are dependent on the terms of the various sales contracts, the frequency and timing of liftings from each field, and prevailing crude oil prices and foreign exchange rates at the time of lifting. The increase in realized crude oil and NGLs prices for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected prevailing Brent benchmark pricing at the time of liftings, together with the impact of movements in the Canadian dollar.

ROYALTIES – EXPLORATION AND PRODUCTION


	Three Months Ended						Six Months Ended
	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Crude oil and NGLs ($/bbl) (1)
North America	$	18.06	$	12.52	$	11.56	$	15.33	$	10.83
International average	$	2.11	$	2.29	$	5.38	$	2.20	$	6.24
North Sea	$	0.24	$	0.24	$	0.36	$	0.24	$	0.36
Offshore Africa	$	5.14	$	5.72	$	10.77	$	5.43	$	10.30
Crude oil and NGLs average	$	17.45	$	12.09	$	11.09	$	14.80	$	10.60

Natural gas ($/Mcf) (1)
North America	$	0.02	$	0.10	$	0.07	$	0.06	$	0.17
Offshore Africa	$	0.56	$	0.56	$	0.65	$	0.56	$	0.67
Natural gas average	$	0.02	$	0.10	$	0.07	$	0.06	$	0.17

Average ($/BOE) (1)	$	10.53	$	7.39	$	6.75	$	8.97	$	6.65

(1)Calculated as royalties divided by respective sales volumes. For crude oil and NGLs and BOE sales volumes, refer to the "Non-GAAP and Other Financial Measures" section of this MD&A. For natural gas sales volumes, refer to the "Daily Production, before royalties" section of this MD&A.

North America

North America crude oil and NGLs and natural gas royalties for the three and six months ended June 30, 2024 and the comparable periods reflected movements in benchmark commodity prices, fluctuations in the WCS Heavy Differential and the impact of sliding scale royalty rates.

Crude oil and NGLs royalty rates(1) averaged approximately 20% of product sales for the six months ended June 30, 2024 compared with 17% of product sales for the six months ended June 30, 2023. Crude oil and NGLs royalty rates averaged approximately 21% of product sales for the second quarter of 2024 compared with 17% for the second quarter of 2023, and 18% for the first quarter of 2024. The increase in royalty rates for the three and six months ended June 30, 2024 from the comparable periods was primarily due to prevailing benchmark pricing and fluctuations in the WCS differential.

Natural gas royalty rates averaged approximately 3% of product sales for the six months ended June 30, 2024 compared with 5% of product sales for the six months ended June 30, 2023. Natural gas royalty rates averaged approximately 1% of product sales for the second quarter of 2024 compared with 3% for the second quarter of 2023, and 4% for the first quarter of 2024. The decrease in royalty rates for the three and six months ended June 30, 2024 from the comparable periods was primarily due to lower benchmark prices.

(1)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.


Canadian Natural Resources Limited			13			Three and six months ended June 30, 2024

Offshore Africa

Under the terms of the various Production Sharing Contracts, royalty rates fluctuate based on realized commodity pricing, capital expenditures and production expenses, the status of payouts, and the timing of liftings from each field.

Royalty rates as a percentage of product sales averaged approximately 5% for the six months ended June 30, 2024 compared with 10% of product sales for the six months ended June 30, 2023. Royalty rates as a percentage of product sales averaged approximately 4% for the second quarter of 2024 compared with 10% of product sales for the second quarter of 2023, and 5% for the first quarter of 2024. Royalty rates as a percentage of product sales reflected the timing of liftings and the status of payout in the various fields.

PRODUCTION EXPENSE – EXPLORATION AND PRODUCTION


	Three Months Ended						Six Months Ended
	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Crude oil and NGLs ($/bbl) (1)
North America	$	12.44	$	14.72	$	15.64	$	13.56	$	16.23
International average	$	66.83	$	61.32	$	51.50	$	64.00	$	45.27
North Sea	$	96.07	$	85.58	$	81.32	$	90.67	$	81.32
Offshore Africa	$	19.28	$	20.70	$	19.44	$	20.00	$	20.32
Crude oil and NGLs average	$	14.54	$	16.66	$	18.38	$	15.59	$	17.67

Natural gas ($/Mcf) (1)
North America	$	1.19	$	1.27	$	1.35	$	1.23	$	1.39
International average	$	6.51	$	5.71	$	4.83	$	6.08	$	6.39
North Sea	$	7.72	$	8.66	$	9.17	$	8.16	$	10.15
Offshore Africa	$	6.30	$	5.33	$	4.17	$	5.77	$	5.63
Natural gas average	$	1.21	$	1.30	$	1.37	$	1.26	$	1.42

Average ($/BOE) (1)	$	11.64	$	13.03	$	14.24	$	12.33	$	13.88

(1)Calculated as production expense divided by respective sales volumes. For crude oil and NGLs and BOE sales volumes, refer to the "Non-GAAP and Other Financial Measures" section of this MD&A. For natural gas sales volumes, refer to the "Daily Production, before royalties" section of this MD&A.

North America

North America crude oil and NGLs production expense for the six months ended June 30, 2024 averaged $13.56 per bbl, a decrease of 16% from $16.23 per bbl for the six months ended June 30, 2023. North America crude oil and NGLs production expense for the second quarter of 2024 of $12.44 per bbl decreased 20% from $15.64 per bbl for the second quarter of 2023, and decreased 15% from $14.72 per bbl for the first quarter of 2024. The decrease in crude oil and NGLs production expense per bbl for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected lower energy costs combined with higher production volumes. The decrease in crude oil and NGLs production expense per bbl for the second quarter of 2024 from the first quarter of 2024 primarily reflected lower energy costs.

North America natural gas production expense for the six months ended June 30, 2024 averaged $1.23 per Mcf, a decrease of 12% from $1.39 per Mcf for the six months ended June 30, 2023. North America natural gas production expense for the second quarter of 2024 of $1.19 per Mcf decreased 12% from $1.35 per Mcf for the second quarter of 2023 and decreased 6% from $1.27 per Mcf for the first quarter of 2024. The decrease in natural gas production expense per Mcf for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected lower energy costs. The decrease for the second quarter of 2024 from the first quarter of 2024 primarily reflected the impact of seasonality.


Canadian Natural Resources Limited			14			Three and six months ended June 30, 2024

International

International crude oil and NGLs production expense for the six months ended June 30, 2024 averaged $64.00 per bbl, an increase of 41% from $45.27 per bbl for the six months ended June 30, 2023. International crude oil and NGLs production expense for the second quarter of 2024 of $66.83 per bbl increased 30% from $51.50 per bbl for the second quarter of 2023 and increased 9% from $61.32 per bbl for the first quarter of 2024. The increase in international crude oil and NGLs production expense per bbl for the three and six months ended June 30, 2024 from the comparable periods primarily reflected the timing of liftings from various fields that have different cost structures and fluctuations in foreign currency.

ADJUSTED DEPLETION, DEPRECIATION AND AMORTIZATION – EXPLORATION AND PRODUCTION


	Three Months Ended						Six Months Ended
($ millions, except per BOE amounts)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
North America	$	956	$	941	$	871	$	1,897	$	1,761
North Sea	24		17		15		41		16
Offshore Africa	108		47		65		155		100
Depletion, depreciation and amortization	$	1,088	$	1,005	$	951	$	2,093	$	1,877
Less: Recoverability charge (1)	62		—		—		62		—
Adjusted depletion, depreciation and amortization (2)	$	1,026	$	1,005	$	951	$	2,031	$	1,877
$/BOE (3)	$	12.77	$	12.64	$	12.26	$	12.71	$	12.20

(1)In connection with the Company’s notice of withdrawal from Block 11B/12B in South Africa in the second quarter of 2024, the Company derecognized $62 million of exploration and evaluation assets through depletion, depreciation and amortization expense.

(2)This is a non-GAAP financial measure used to calculate depletion, depreciation and amortization, less the impact of charges that are not related to current period normal course depletion, depreciation and amortization expense such as asset recoverability charges that are not related to current period production. It may not be comparable to similar measures presented by other companies, and should not be considered an alternative to or more meaningful than the most directly comparable financial measure presented in the financial statements (depletion, depreciation and amortization expense), as an indication of the Company's performance.

(3)This is a non-GAAP ratio calculated as adjusted depletion, depreciation and amortization expense divided by sales volumes. For sales volumes, refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

Adjusted depletion, depreciation and amortization expense for the six months ended June 30, 2024 averaged $12.71 per BOE, an increase of 4% from $12.20 per BOE for the six months ended June 30, 2023. Adjusted depletion, depreciation and amortization expense for the second quarter of 2024 averaged $12.77 per BOE, an increase of 4% from $12.26 per BOE for the second quarter of 2023, and comparable with $12.64 per BOE for the first quarter of 2024. The increase in adjusted depletion, depreciation and amortization expense for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected the impact of changes in North America depletion rates due to changes in reserve estimates at December 31, 2023.

Adjusted depletion, depreciation and amortization expense on an absolute and per BOE basis also reflects the impact of the timing of liftings from each field in the North Sea and Offshore Africa.

ASSET RETIREMENT OBLIGATION ACCRETION – EXPLORATION AND PRODUCTION


	Three Months Ended						Six Months Ended
($ millions, except per BOE amounts)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
North America	$	57	$	58	$	58	$	115	$	117
North Sea	16		16		12		32		23
Offshore Africa	2		2		2		4		4
Asset retirement obligation accretion	$	75	$	76	$	72	$	151	$	144
$/BOE (1)	$	0.95	$	0.95	$	0.93	$	0.95	$	0.93

(1)Calculated as asset retirement obligation accretion divided by sales volumes. For sales volumes, refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

Asset retirement obligation accretion expense represents the increase in the carrying amount of the asset retirement obligation due to the passage of time.


Canadian Natural Resources Limited			15			Three and six months ended June 30, 2024

Asset retirement obligation accretion expense for the six months ended June 30, 2024 averaged $0.95 per BOE, comparable with $0.93 per BOE for the six months ended June 30, 2023. Asset retirement obligation accretion expense for the second quarter of 2024 averaged $0.95 per BOE, comparable with $0.93 per BOE for the second quarter of 2023 and $0.95 per BOE for the first quarter of 2024.

OPERATING HIGHLIGHTS – OIL SANDS MINING AND UPGRADING

The Company continues to focus on safe, reliable, and efficient operations, leveraging its technical expertise across the Horizon and AOSP sites. SCO production averaged 410,518 bbl/d in the second quarter of 2024, reflecting the completion of planned turnaround activities at Horizon including all tie-ins and commissioning of the reliability enhancement project components.

The Company incurred production expense of $941 million for the second quarter of 2024, a decrease of 6% from $997 million for the second quarter of 2023, and a decrease of 8% from $1,026 million for the first quarter of 2024. The decrease in production expense for the second quarter of 2024 from the comparable periods primarily reflected lower energy costs. The Company continues to focus on cost control and driving efficiencies across the entire asset base.

REALIZED PRODUCT PRICES, ROYALTIES AND TRANSPORTATION – OIL SANDS MINING AND UPGRADING


	Three Months Ended						Six Months Ended
($/bbl)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Realized SCO sales price (1)	$	108.81	$	88.84	$	95.08	$	98.18	$	95.64
Bitumen value for royalty purposes (2)	$	82.08	$	63.51	$	66.51	$	63.51	$	56.10
Bitumen royalties (3)	$	20.01	$	14.28	$	13.58	$	16.96	$	11.58
Transportation (1)	$	2.81	$	1.67	$	2.03	$	2.21	$	1.74

(1)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(2)Calculated as the quarterly average of the bitumen methodology price.

(3)Calculated as royalties divided by sales volumes.

The realized SCO sales price averaged $98.18 per bbl for the six months ended June 30, 2024, an increase of 3% from $95.64 per bbl for the six months ended June 30, 2023. The realized SCO sales price averaged $108.81 per bbl for the second quarter of 2024, an increase of 14% from $95.08 per bbl for the second quarter of 2023, and an increase of 22% from $88.84 per bbl for the first quarter of 2024. The increase in realized SCO sales price for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected the increase in WTI benchmark pricing. The increase in realized SCO sales price for the second quarter of 2024 from the first quarter of 2024 reflected the SCO differential strengthening as a result of upgrader maintenance in the WCSB and the start-up of the TMX pipeline.

The increase in bitumen royalties per bbl for the three and six months ended June 30, 2024 from the comparable periods primarily reflected higher prevailing bitumen pricing for royalty purposes, combined with the impact of sliding scale royalty rates.

Transportation expense averaged $2.21 per bbl for the six months ended June 30, 2024, an increase of 27% from $1.74 per bbl for the six months ended June 30, 2023. Transportation expense averaged $2.81 per bbl for the second quarter of 2024, an increase of 38% from $2.03 per bbl for the second quarter of 2023, and an increase of 68% from $1.67 per bbl for the first quarter of 2024. The increase in transportation expense per bbl for the three and six months ended June 30, 2024 from the comparable periods primarily reflected higher sales to the US Gulf Coast and new volumes on the TMX pipeline in the second quarter of 2024.

PRODUCTION EXPENSE – OIL SANDS MINING AND UPGRADING


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023



Production expense, excluding natural gas costs	$	917	$	976	$	957	$	1,893	$	1,928
Natural gas costs	24		50		40		74		111
Production expense	$	941	$	1,026	$	997	$	1,967	$	2,039


Canadian Natural Resources Limited			16			Three and six months ended June 30, 2024


	Three Months Ended						Six Months Ended
($/bbl)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023



Production expense, excluding natural gas costs (1)	$	25.29	$	23.64	$	30.03	$	24.41	$	26.25
Natural gas costs (2)	0.66		1.21		1.25		0.95		1.51
Production expense (3)	$	25.95	$	24.85	$	31.28	$	25.36	$	27.76
Sales volumes (bbl/d)	398,528		453,794		350,041		426,161		405,721

(1)Calculated as production expense, excluding natural gas costs divided by sales volumes.

(2)Calculated as natural gas costs divided by sales volumes.

(3)Calculated as production expense divided by sales volumes.

Production expense for the six months ended June 30, 2024 averaged $25.36 per bbl, a decrease of 9% from $27.76 per bbl for the six months ended June 30, 2023. Production expense for the second quarter of 2024 averaged $25.95 per bbl, a decrease of 17% from $31.28 per bbl for the second quarter of 2023, and an increase of 4% from $24.85 per bbl for the first quarter of 2024. The decrease in production expense per bbl for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected higher production volumes and lower energy costs. The increase in production expense per bbl for the second quarter of 2024 from the first quarter of 2024 primarily reflected lower production volumes, partially offset by lower energy costs.

DEPLETION, DEPRECIATION AND AMORTIZATION – OIL SANDS MINING AND UPGRADING


	Three Months Ended						Six Months Ended
($ millions, except per bbl amounts)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Depletion, depreciation and amortization	$	557	$	524	$	442	$	1,081	$	930


$/bbl (1)	$	15.37	$	12.70	$	13.88	$	13.95	$	12.67

(1)Calculated as depletion, depreciation and amortization divided by sales volumes.

Depletion, depreciation and amortization expense for the six months ended June 30, 2024 averaged $13.95 per bbl, an increase of 10% from $12.67 per bbl for the six months ended June 30, 2023. Depletion, depreciation and amortization expense for the second quarter of 2024 of $15.37 per bbl increased 11% from $13.88 per bbl for the second quarter of 2023, and increased 21% from $12.70 per bbl for the first quarter of 2024. The increase in depletion, depreciation and amortization expense per bbl for the three and six months ended June 30, 2024 from the comparable periods primarily reflected the derecognition of certain components related to the turnaround at Horizon in the second quarter of 2024.

ASSET RETIREMENT OBLIGATION ACCRETION – OIL SANDS MINING AND UPGRADING


	Three Months Ended						Six Months Ended
($ millions, except per bbl amounts)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Asset retirement obligation accretion	$	22	$	21	$	19	$	43	$	39
$/bbl (1)	$	0.58	$	0.51	$	0.62	$	0.54	$	0.53

(1)Calculated as asset retirement obligation accretion divided by sales volumes.

Asset retirement obligation accretion expense represents the increase in the carrying amount of the asset retirement obligation due to the passage of time.

Asset retirement obligation accretion expense for the six months ended June 30, 2024 averaged $0.54 per bbl was comparable with $0.53 per bbl for the six months ended June 30, 2023. Asset retirement obligation accretion expense for the second quarter of 2024 of $0.58 per bbl decreased 6% from $0.62 per bbl for the second quarter of 2023, and increased 14% from $0.51 per bbl for the first quarter of 2024. The decrease in asset retirement obligation accretion expense per bbl for the second quarter of 2024 from the second quarter of 2023 primarily reflected higher production volumes, partially offset by the net impact of changes in cost and timing estimates and discount rate estimate revisions at December 31, 2023. The increase in asset retirement obligation accretion expense per bbl for the second quarter of 2024 from the first quarter of 2024 reflected the impact of lower production volumes in the second quarter of 2024.


Canadian Natural Resources Limited			17			Three and six months ended June 30, 2024

MIDSTREAM AND REFINING


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Product sales
Midstream activities	$	21	$	20	$	15	$	41	$	36
NWRP, refined product sales and other	215		214		203		429		453
Segmented revenue	236		234		218		470		489

Less:
NWRP, refining toll	81		74		85		155		155
Midstream activities	7		5		6		12		14
Production expense	88		79		91		167		169
NWRP, transportation and feedstock costs	194		158		162		352		315
Depreciation	4		4		4		8		8


Segmented loss	$	(50)	$	(7)	$	(39)	$	(57)	$	(3)

The Company's Midstream and Refining assets consist of two crude oil pipeline systems, a 50% working interest in an 84-megawatt cogeneration plant at Primrose and the Company's 50% equity investment in North West Redwater Partnership ("NWRP").

NWRP operates a 50,000 bbl/d bitumen upgrader and refinery that processes approximately 12,500 bbl/d of bitumen feedstock for the Company (25% toll payer) and 37,500 bbl/d of bitumen feedstock for the Alberta Petroleum Marketing Commission ("APMC") (75% toll payer), an agent of the Government of Alberta. The Company is unconditionally obligated to pay its 25% pro rata share of the debt component of the monthly fee-for-service toll over the 40-year tolling period until 2058. Sales of diesel and refined products and associated refining tolls are recognized in the Midstream and Refining segment. For the second quarter of 2024, production of ultra-low sulphur diesel and other refined products averaged 78,272 BOE/d (19,568 BOE/d to the Company), (three months ended March 31, 2024 – 78,569 BOE/d; 19,642 BOE/d to the Company; three months ended June 30, 2023 – 79,112 BOE/d; 19,778 BOE/d to the Company), reflecting the 25% toll payer commitment.

During the second quarter of 2024, NWRP issued $700 million of 4.85% series P bonds due June 1, 2034 and $600 million of 5.08% series Q bonds due June 1, 2054. Additionally, NWRP extended its revolving credit facility originally maturing June 2025 to June 2027, and reduced the capacity from $2,175 million to $1,900 million. NWRP also repaid $440 million on its non-revolving credit facility maturing June 2025, reducing the amount outstanding to $500 million.

As at June 30, 2024, the Company's cumulative unrecognized share of the equity loss and partnership distributions from NWRP was $516 million (December 31, 2023 – $555 million). For the three months ended June 30, 2024, the Company's recovery of its share of unrecognized equity losses was $35 million (six months ended June 30, 2024 – recovery of unrecognized equity losses of $39 million; three months ended June 30, 2023 – unrecognized equity loss of $1 million; six months ended June 30, 2023 – unrecognized equity loss of $17 million).

ADMINISTRATION EXPENSE


	Three Months Ended						Six Months Ended
($ millions, except per BOE amounts)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Administration expense	$	124	$	126	$	119	$	250	$	225
$/BOE (1)	$	1.06	$	1.04	$	1.09	$	1.05	$	0.99
Sales volumes (BOE/d) (2)	1,280,416		1,327,762		1,202,336		1,304,089		1,255,841

(1)Calculated as administration expense divided by sales volumes.

(2)Total Company sales volumes.


Canadian Natural Resources Limited			18			Three and six months ended June 30, 2024

Administration expense for the six months ended June 30, 2024 of $1.05 per BOE increased 6% from $0.99 per BOE for the six months ended June 30, 2023. Administration expense for the second quarter of 2024 of $1.06 per BOE decreased 3% from $1.09 per BOE for the second quarter of 2023, and was comparable with $1.04 per BOE for the first quarter of 2024. The increase in administration expense per BOE for the six months ended June 30, 2024 from the six months ended June 30, 2023 primarily reflected higher personnel and corporate costs, partially offset by higher overhead recoveries. The decrease in administration expense per BOE for the second quarter of 2024 from the second quarter of 2023 primarily reflected higher sales volumes, partially offset by higher personnel charges.

SHARE-BASED COMPENSATION


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Share-based compensation (recovery) expense	$	(13)	$	294	$	70	$	281	$	136

The Company's Stock Option Plan provides employees with the right to receive common shares or a cash payment in exchange for stock options surrendered. The Performance Share Unit ("PSU") plan provides certain executive employees of the Company with the right to receive a cash payment; the amount of which is determined with reference to the value of the Company's shares, and by individual employee performance and the extent to which certain other performance measures are met.

The Company recognized $281 million of share-based compensation expense for the six months ended June 30, 2024, primarily as a result of the measurement of the fair value of outstanding stock options related to the impact of normal course graded vesting of stock options granted in prior periods, the impact of vested stock options exercised or surrendered during the period, and changes in the Company's share price.

INTEREST AND OTHER FINANCING EXPENSE


	Three Months Ended						Six Months Ended
($ millions, except effective interest rate)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Interest and other financing expense	$	158	$	138	$	178	$	296	$	332
Less: Interest income and other (1)	7		22		(3)		29		6


Interest expense on long-term debt and lease liabilities (1)	$	165	$	160	$	175	$	325	$	338




Average current and long-term debt (2)	$	11,568	$	11,595	$	12,910	$	11,582	$	12,627
Average lease liabilities (2)	1,525		1,542		1,510		1,533		1,512
Average long-term debt and lease liabilities (2)	$	13,093	$	13,137	$	14,420	$	13,115	$	14,139
Average effective interest rate (3) (4)	4.9%		4.8%		4.8%		4.9%		4.7%

Interest and other financing expense per $/BOE (5)	$	1.35	$	1.15	$	1.63	$	1.25	$	1.46
Sales volumes (BOE/d) (6)	1,280,416		1,327,762		1,202,336		1,304,089		1,255,841

(1)Item is a component of interest and other financing expense.

(2)The average of current and long-term debt and lease liabilities outstanding during the respective period.

(3)This is a non-GAAP ratio and may not be comparable to similar measures presented by other companies, and should not be considered an alternative to or more meaningful than the most directly comparable financial measure presented in the financial statements, as applicable, as an indication of the Company's performance.

(4)Calculated as the average interest expense on long-term debt and lease liabilities divided by the average long-term debt and lease liabilities balance. The Company presents its average effective interest rate for financial statement users to evaluate the Company’s average cost of debt borrowings.

(5)Calculated as interest and other financing expense divided by sales volumes.

(6)Total Company sales volumes.


Canadian Natural Resources Limited			19			Three and six months ended June 30, 2024

Interest and other financing expense per BOE for the six months ended June 30, 2024 decreased 14% to $1.25 per BOE from $1.46 per BOE for the six months ended June 30, 2023. Interest and other financing expense per BOE for the second quarter of 2024 decreased 17% to $1.35 per BOE from $1.63 per BOE for the second quarter of 2023, and increased 17% from $1.15 per BOE for the first quarter of 2024. The decrease in interest and other financing expense per BOE for the three and six months ended June 30, 2024 from the comparable periods in 2023 primarily reflected lower average debt levels and higher interest income in 2024, combined with higher sales volumes. The increase in interest and other financing expense per BOE for the second quarter of 2024 from the first quarter of 2024 primarily reflected lower sales volumes and interest income.

The Company's average effective interest rate for the three and six months ended June 30, 2024 of 4.9% increased from the comparable periods, primarily reflecting higher prevailing interest rates on floating rate long-term debt held during 2024.

RISK MANAGEMENT ACTIVITIES

The Company utilizes various derivative financial instruments to manage its commodity price, interest rate and foreign currency exposures. These derivative financial instruments are not intended for trading or speculative purposes.


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Foreign currency contracts	$	12	$	26	$	(30)	$	38	$	(32)
Natural gas financial instruments (1) (2)	6		(1)		3		5		6


Net realized loss (gain)	18		25		(27)		43		(26)

Foreign currency contracts	3		9		2		12		5
Natural gas financial instruments (1) (2)	(3)		4		(6)		1		11


Net unrealized loss (gain)	—		13		(4)		13		16
Net loss (gain)	$	18	$	38	$	(31)	$	56	$	(10)

(1)Certain commodity financial instruments were assumed in the acquisition of Painted Pony Energy Ltd. in the fourth quarter of 2020.

(2)In the fourth quarter of 2023, the Company entered into 50,000 MMBtu/d of US$1.82 AECO fixed price financial contracts for the period of January to December 2024.

During the six months ended June 30, 2024 net realized risk management losses were primarily related to the settlement of foreign currency contracts. The Company recorded a net unrealized loss of $13 million ($13 million after-tax of $nil) on its risk management activities for the six months ended June 30, 2024, and $nil for the second quarter of 2024 (three months ended March 31, 2024 – unrealized loss of $13 million ($12 million after tax of $1 million); three months ended June 30, 2023 – unrealized gain of $4 million ($2 million after tax of $2 million); six months ended June 30, 2023 – unrealized loss of $16 million ($14 million after tax of $2 million)).

Further details related to outstanding derivative financial instruments as at June 30, 2024 are disclosed in note 16 to the financial statements.

FOREIGN EXCHANGE


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Net realized loss (gain)	$	118	$	(19)	$	29	$	99	$	18
Net unrealized (gain) loss	(15)		269		(231)		254		(234)
Net loss (gain) (1)	$	103	$	250	$	(202)	$	353	$	(216)

(1)Amounts are reported net of the hedging effect of cross currency swaps.

The net realized foreign exchange loss for the six months ended June 30, 2024 was primarily related to the repayment of US dollar debt, combined with foreign exchange rate fluctuations on the settlement of working capital items denominated in US dollars or UK pounds sterling. The net unrealized foreign exchange loss for the six months ended June 30, 2024 was primarily related to the translation of outstanding US dollar debt, partially offset by the repayment of the US dollar debt. The US/Canadian dollar exchange rate as at June 30, 2024 was US$0.7306 (March 31, 2024 – US$0.7390, June 30, 2023 – US$0.7554).


Canadian Natural Resources Limited			20			Three and six months ended June 30, 2024

INCOME TAXES


	Three Months Ended						Six Months Ended
($ millions, except effective tax rates)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
North America (1)	$	548	$	412	$	299	$	960	$	779
North Sea	(13)		(5)		(4)		(18)		2
Offshore Africa	5		5		20		10		30
Current PRT – North Sea	(6)		(14)		(5)		(20)		(45)
Other taxes	(14)		3		3		(11)		6
Current income tax	520		401		313		921		772
Deferred corporate income tax	14		14		(15)		28		8
Deferred PRT – North Sea	7		6		11		13		18
Deferred income tax	21		20		(4)		41		26
Income tax	$	541	$	421	$	309	$	962	$	798
Earnings before taxes	$	2,256	$	1,408	$	1,772	$	3,664	$	4,060
Effective tax rate on net earnings (2)	24%		30%		17%		26%		20%

	Three Months Ended						Six Months Ended
($ millions, except effective tax rates)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Income tax	$	541	$	421	$	309	$	962	$	798
Tax effect on non-operating items (3)	17		14		2		31		10
Current PRT – North Sea	6		14		5		20		45
Deferred PRT – North Sea	(7)		(6)		(11)		(13)		(18)
Other taxes	14		(3)		(3)		11		(6)
Effective tax on adjusted net earnings	$	571	$	440	$	302	$	1,011	$	829
Adjusted net earnings from operations (4)	$	1,892	$	1,474	$	1,256	$	3,366	$	3,137
Adjusted net earnings from operations, before taxes	$	2,463	$	1,914	$	1,558	$	4,377	$	3,966
Effective tax rate on adjusted net earnings from operations (5) (6)	23%		23%		19%		23%		21%

(1)Includes North America Exploration and Production, Oil Sands Mining and Upgrading, and Midstream and Refining segments.

(2)Calculated as total of current and deferred income tax divided by earnings before taxes.

(3)Includes the net income tax effect on PSUs, certain stock options, unrealized risk management, and a recoverability charge related to the notice to withdraw from Block 11B/12B in South Africa.

(4)Non-GAAP Financial Measure. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(5)This is a non-GAAP ratio and may not be comparable to similar measures presented by other companies, and should not be considered an alternative to or more meaningful than the most directly comparable financial measure presented in the financial statements, as applicable, as an indication of the Company's performance.

(6)Calculated as effective tax on adjusted net earnings divided by adjusted net earnings from operations, before taxes. The Company presents its effective tax rate on adjusted net earnings from operations for financial statement users to evaluate the Company's effective tax rate on its core business activities.

The effective tax rate on net earnings and adjusted net earnings from operations for the three and six months ended June 30, 2024 and the comparable periods included the impact of non-taxable items in North America and the North Sea and the impact of differences in jurisdictional income and tax rates in the countries in which the Company operates, in relation to net earnings.

The current and deferred corporate income tax and the current and deferred PRT in the North Sea for the three and six months ended June 30, 2024 and the comparable periods included the impact of carrybacks of abandonment expenditures related to the decommissioning activities at the Company's platforms in the North Sea.


Canadian Natural Resources Limited			21			Three and six months ended June 30, 2024

The Company files income tax returns in the various jurisdictions in which it operates. These tax returns are subject to periodic examinations in the normal course by the applicable tax authorities. The tax returns as prepared may include filing positions that could be subject to differing interpretations of applicable tax laws and regulations, which may take several years to resolve. The Company does not believe the ultimate resolution of these matters will have a material impact upon the Company's reported results of operations, financial position or liquidity.

NET CAPITAL EXPENDITURES(1) (2)


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Exploration and Production
Exploration and Evaluation Assets
Net expenditures	$	(4)	$	69	$	9	$	65	$	37
Net property dispositions	—		—		(2)		—		(2)
Total Exploration and Evaluation Assets	(4)		69		7		65		35
Property, Plant and Equipment
Net property acquisitions (dispositions)	4		(3)		17		1		17
Well drilling, completion and equipping	478		413		443		891		953
Production and related facilities	353		255		354		608		715
Other	13		12		19		25		30
Total Property, Plant and Equipment	848		677		833		1,525		1,715
Total Exploration and Production	844		746		840		1,590		1,750
Oil Sands Mining and Upgrading
Project costs	123		62		106		185		158
Sustaining capital	526		281		480		807		741
Turnaround costs	114		11		132		125		154

Net property dispositions	—		(2)		—		(2)		—
Other	1		1		1		2		2
Total Oil Sands Mining and Upgrading	764		353		719		1,117		1,055
Midstream and Refining	3		4		2		7		5
Head Office	10		10		8		20		16
Net capital expenditures	$	1,621	$	1,113	$	1,569	$	2,734	$	2,826
Abandonment expenditures	$	129	$	162	$	100	$	291	$	237

By Segment
North America	$	804	$	701	$	778	$	1,505	$	1,662
North Sea	3		4		5		7		8
Offshore Africa	37		41		57		78		80
Oil Sands Mining and Upgrading	764		353		719		1,117		1,055
Midstream and Refining	3		4		2		7		5
Head Office	10		10		8		20		16


Net capital expenditures	$	1,621	$	1,113	$	1,569	$	2,734	$	2,826

(1)Net capital expenditures exclude the impact of lease assets, fair value and revaluation adjustments.

(2)Non-GAAP Financial Measure. The composition of this measure has been updated for all periods presented. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

The Company's strategy is focused on building a diversified asset base that is balanced among various products. In order to facilitate efficient operations, the Company concentrates its activities in core areas. The Company focuses on maintaining its land inventories to enable the continuous exploitation of play types and geological trends, greatly reducing overall exploration risk. By owning associated infrastructure, the Company is able to maximize utilization of its production facilities, thereby increasing control over production expenses.


Canadian Natural Resources Limited			22			Three and six months ended June 30, 2024

Net capital expenditures were $2,734 million for the six months ended June 30, 2024, compared with $2,826 million for the six months ended June 30, 2023. Net capital expenditures were $1,621 million for the second quarter of 2024, compared with $1,569 million for the second quarter of 2023 and $1,113 million for the first quarter of 2024.

In addition, the Company reported abandonment expenditures of $291 million for the six months ended June 30, 2024, compared with $237 million for the six months ended June 30, 2023. Abandonment expenditures were $129 million for the second quarter of 2024, compared with $100 million for the second quarter of 2023 and $162 million for the first quarter of 2024.

2024 Capital Budget

On December 14, 2023, the Company announced its 2024 capital budget targeted at approximately $5,420 million, and targeting to provide near-term production growth in 2024 and mid- and long-term production and capacity growth in 2025 and beyond. Production for 2024 is targeted between 1,330,000 BOE/d and 1,380,000 BOE/d. In addition, the Company targets $635 million in abandonment expenditures for 2024.

The 2024 capital budget constitutes forward-looking statements. Refer to the "Advisory" section of this MD&A for further details on forward-looking statements.

Drilling Activity(1) (2)


	Three Months Ended			Six Months Ended
(number of net wells)	Jun 30 2024	Mar 31 2024	Jun 30 2023	Jun 30 2024	Jun 30 2023
Net successful crude oil wells (3)	63	61	52	124	135
Net successful natural gas wells	24	16	21	40	42
Dry wells	1	—	—	1	2
Total	88	77	73	165	179
Success rate	99%	100%	100%	99%	99%

(1)Includes drilling activity for North America and International segments.

(2)Excludes stratigraphic and service wells.

(3)Includes bitumen wells.

North America

During the second quarter of 2024, the Company drilled 25 net natural gas wells, 14 net primary heavy crude oil wells, 10 net Pelican Lake heavy crude oil wells, 30 net bitumen (thermal oil) wells and 9 net light crude oil wells.

LIQUIDITY AND CAPITAL RESOURCES


($ millions, except ratios)	Jun 30 2024		Mar 31 2024		Dec 31 2023		Jun 30 2023
Adjusted working capital (1)	$	(194)	$	774	$	712	$	(293)
Long-term debt, net (2)	$	9,234	$	10,273	$	9,922	$	12,033
Shareholders' equity	$	39,469	$	39,508	$	39,832	$	38,644

Debt to book capitalization (2)	19.0%		20.6%		19.9%		23.7%
After-tax return on average capital employed (3)	16.1%		15.6%		17.2%		15.8%

(1)Calculated as current assets less current liabilities, excluding the current portion of long-term debt.

(2)Capital Management Measure. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.

(3)Non-GAAP Ratio. Refer to the "Non-GAAP and Other Financial Measures" section of this MD&A.


Canadian Natural Resources Limited			23			Three and six months ended June 30, 2024

As at June 30, 2024, the Company's capital resources consisted primarily of cash flows from operating activities, available bank credit facilities and access to debt capital markets. Cash flows from operating activities and the Company's ability to renew existing bank credit facilities and raise new debt are dependent on factors discussed in the "Business Environment" section of this MD&A and in the "Risks and Uncertainties" section of the Company's annual MD&A for the year ended December 31, 2023. In addition, the Company's ability to renew existing bank credit facilities and raise new debt reflects current credit ratings as determined by independent rating agencies, and market conditions. The Company continues to believe its internally generated cash flows from operating activities supported by its ongoing hedge policy, the flexibility of its capital expenditure programs and multi-year financial plans, its existing bank credit facilities, and its ability to raise new debt on commercially acceptable terms will provide sufficient liquidity to sustain its operations in the short, medium and long-term and support its growth strategy.

On an ongoing basis the Company continues to focus on its balance sheet strength and available liquidity by:

▪Monitoring cash flows from operating activities, which is the primary source of funds;

▪Monitoring exposure to individual customers, contractors, suppliers, and joint venture partners on a regular basis and when appropriate, ensuring parental guarantees or letters of credit are in place, and as applicable, taking other mitigating actions to minimize the impact in the event of a default;

▪Actively managing the allocation of capital to ensure it is expended in a prudent and appropriate manner with flexibility to adjust to market conditions. The Company continues to exercise its capital flexibility to address commodity price volatility and its impact on operating expenditures, capital commitments and long-term debt;

▪Monitoring the Company's ability to fulfill financial obligations as they become due or the ability to monetize assets in a timely manner at a reasonable price;

▪Reviewing bank credit facilities and public debt indentures to ensure they are in compliance with applicable covenant packages; and

▪Reviewing the Company's borrowing capacity:

•Borrowings under the Company's revolving credit facilities may be made by way of pricing referenced to CORRA, SOFR, US base rate or Canadian prime rate.

•The Company's borrowings under its US commercial paper program are authorized up to a maximum of US$2,500 million.

•During the second quarter of 2024, the Company repaid $320 million of 3.55% medium-term notes.

•In July 2023, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to $3,000 million of medium-term notes in Canada, which expires in August 2025. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance.

•During the second quarter of 2024, the Company repaid US$500 million of 3.80% US dollar debt securities.

•In July 2023, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to US$3,000 million of debt securities in the United States, which expires in August 2025. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance.

As at June 30, 2024, the Company had undrawn revolving bank credit facilities of $5,450 million. Including cash and cash equivalents, the Company had approximately $6,365 million in liquidity. The Company also has certain other dedicated credit facilities supporting letters of credit. At June 30, 2024, the Company had no commercial paper drawn under its commercial paper program, and reserves capacity under its revolving bank credit facilities for amounts outstanding under this program.

Long-term debt, net was $9,234 million as at June 30, 2024, resulting in a debt to book capitalization ratio of 19.0% (December 31, 2023 – 19.9%); this ratio was below the 25% to 45% internal range utilized by management. The ratio may fall below or exceed the targeted range depending on the execution of the Company's capital program, commodity price and foreign currency volatility, and the timing of acquisitions. The Company remains committed to maintaining a strong balance sheet, adequate available liquidity and a flexible capital structure. Further details related to the Company's long-term debt as at June 30, 2024 are discussed in note 9 to the financial statements.

During the second quarter of 2024, the Company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for $25.65 per common share with net proceeds, after fees and expenses, of $575 million, contributing to an equivalent decrease in net debt at June 30, 2024.

The Company is subject to a financial covenant that requires debt to book capitalization as defined in its credit facility agreements to not exceed 65%. As at June 30, 2024, the Company was in compliance with this covenant.


Canadian Natural Resources Limited			24			Three and six months ended June 30, 2024

The Company periodically utilizes commodity derivative financial instruments under its commodity hedge policy to reduce the risk of volatility in commodity prices and to support the Company's cash flow for its capital expenditure programs. This policy currently allows for the hedging of up to 60% of the near 12 months budgeted production and up to 40% of the following 13 to 24 months estimated production. For the purpose of this policy, the purchase of put options is in addition to the above parameters.

As at June 30, 2024, the maturity dates of certain financial liabilities, including long-term debt and other long-term liabilities and related interest payments, were as follows:


	Less than 1 year		1 to less than 2 years		2 to less than 5 years		Thereafter


Long-term debt (1)	$	820	$	821	$	2,377	$	6,186
Other long-term liabilities (2)	$	285	$	209	$	412	$	651
Interest and other financing expense (3)	$	565	$	509	$	1,268	$	3,310

(1)Long-term debt represents principal repayments only and does not reflect interest, original issue discounts and premiums or transaction costs.

(2)Lease payments included within other long-term liabilities reflect principal payments only and are as follows; less than one year, $276 million; one to less than two years, $209 million; two to less than five years, $412 million; and thereafter, $651 million.

(3)Includes interest and other financing expense on long-term debt and other long-term liabilities. Payments were estimated based upon applicable interest and foreign exchange rates as at June 30, 2024.

Share Capital(1)

As at June 30, 2024, there were 2,127,639,000 common shares outstanding (December 31, 2023 – 2,144,815,000 common shares) and 52,851,000 stock options outstanding (December 31, 2023 – 52,410,000 stock options). As at July 30, 2024, the Company had 2,122,586,000 common shares outstanding and 52,227,000 stock options outstanding.

On February 28, 2024, the Board of Directors approved a 5% increase in the quarterly dividend to $0.525 per common share, beginning with the dividend paid on April 5, 2024.

On November 1, 2023, the Board of Directors approved an 11% increase in the quarterly dividend to $0.50 per common share. On March 1, 2023, the Board of Directors approved a 6% increase in the quarterly dividend to $0.45 per common share.

On March 8, 2024, the Company's application was approved for a Normal Course Issuer Bid to purchase through the facilities of the Toronto Stock Exchange ("TSX"), alternative Canadian trading platforms, and the New York Stock Exchange, up to 180,462,858 common shares, representing 10% of the public float, over a 12-month period commencing March 13, 2024 and ending March 12, 2025.

For the six months ended June 30, 2024, the Company purchased 28,100,000 common shares at a weighted average price of $48.68 per common share for a total cost, including tax, of $1,385 million. Retained earnings were reduced by $1,241 million, representing the excess of the purchase price of common shares over their average carrying value. Subsequent to June 30, 2024, up to and including July 30, 2024, the Company purchased 5,500,000 common shares at a weighted average price of $48.80 per common share for a total cost, including tax, of $273 million.


Canadian Natural Resources Limited			25			Three and six months ended June 30, 2024

COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company has committed to certain payments. The following table summarizes the Company's commitments as at June 30, 2024:


($ millions)	Remaining 2024		2025		2026		2027		2028		Thereafter
Product transportation and processing (1)	$	890	$	1,736	$	1,585	$	1,503	$	1,386	$	14,017
North West Redwater Partnership service toll (2)	$	74	$	148	$	130	$	115	$	119	$	4,729
Offshore vessels and equipment	$	20	$	35	$	—	$	—	$	—	$	—
Field equipment and power	$	27	$	25	$	23	$	22	$	22	$	193
Other	$	75	$	111	$	111	$	22	$	23	$	285

(1)The Company's commitment for the 20-year product transportation agreement on the Trans Mountain Expansion pipeline reflects interim tolls approved by the Canada Energy Regulator in the fourth quarter of 2023, and is subject to change pending the approval of final tolls.

(2)Pursuant to the processing agreements, the Company pays its 25% pro rata share of the debt component of the monthly fee-for-service toll. Included in the toll is $2,685 million of interest payable over the 40-year tolling period, ending in 2058.

In addition to the commitments disclosed above, the Company has entered into various agreements related to the engineering, procurement and construction of its various development projects. These contracts can be cancelled by the Company upon notice without penalty, subject to the costs incurred up to and in respect of the cancellation.

LEGAL PROCEEDINGS AND OTHER CONTINGENCIES

The Company is defendant and plaintiff in a number of legal actions arising in the normal course of business. In addition, the Company is subject to certain contractor construction claims. The Company believes that any liabilities that might arise pertaining to any such matters would not have a material effect on its consolidated financial position.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements requires the Company to make estimates, assumptions and judgements in the application of IFRS that have a significant impact on the financial results of the Company. Actual results may differ from estimated amounts, and those differences may be material. A comprehensive discussion of the Company's significant accounting estimates is contained in the Company's annual MD&A and audited consolidated financial statements for the year ended December 31, 2023.

CONTROL ENVIRONMENT

There have been no changes to internal control over financial reporting ("ICFR") during the six months ended June 30, 2024 that have materially affected, or are reasonably likely to materially affect the Company's internal control over financial reporting. Due to inherent limitations, disclosure controls and procedures and internal control over financial reporting may not prevent or detect misstatements, and even those controls determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.


Canadian Natural Resources Limited			26			Three and six months ended June 30, 2024

NON-GAAP AND OTHER FINANCIAL MEASURES

This MD&A includes references to non-GAAP and other financial measures as defined in NI 52-112. These financial measures are used by the Company to evaluate its financial performance, financial position and cash flow and include non-GAAP financial measures, non-GAAP ratios, total of segments measures, capital management measures, and supplementary financial measures. These financial measures are not defined by IFRS and therefore are referred to as non-GAAP and other financial measures. The non-GAAP and other financial measures used by the Company may not be comparable to similar measures presented by other companies, and should not be considered an alternative to or more meaningful than the most directly comparable financial measure presented in the financial statements, as applicable, as an indication of the Company's performance. Descriptions of the Company's non-GAAP and other financial measures included in this MD&A, and reconciliations to the most directly comparable GAAP measure, as applicable, are provided below.

Adjusted Net Earnings from Operations

Adjusted net earnings from operations is a non-GAAP financial measure that adjusts net earnings as presented in the Company's consolidated Statements of Earnings, for non-operating items, net of tax impacts. The Company considers adjusted net earnings from operations a key measure in evaluating its performance, as it demonstrates the Company's ability to generate after-tax operating earnings from its core business areas. A reconciliation for adjusted net earnings from operations is presented below.



	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Net earnings	$	1,715	$	987	$	1,463	$	2,702	$	3,262
Share-based compensation, net of tax (1)	(15)		281		66		266		128
Unrealized risk management loss (gain), net of tax (2)	—		12		(2)		12		14
Unrealized foreign exchange (gain) loss, net of tax (3)	(15)		269		(231)		254		(234)
Realized foreign exchange loss on repayment of US dollar debt securities, net of tax (4)	135		—		—		135		—
Loss (gain) from investments, net of tax (5)	25		(75)		(40)		(50)		(33)

Recoverability charge, net of tax (6)	47		—		—		47		—

Non-operating items, net of tax	177		487		(207)		664		(125)
Adjusted net earnings from operations	$	1,892	$	1,474	$	1,256	$	3,366	$	3,137

(1)Share-based compensation includes costs incurred under the Company's Stock Option Plan and PSU plan. The fair value of the share-based compensation is recognized as a liability on the Company's balance sheets and periodic changes in the fair value are recognized in net earnings. Pre-tax share-based compensation for the three months ended June 30, 2024 was a recovery of $13 million (three months ended March 31, 2024 – $294 million expense, three months ended June 30, 2023 – $70 million expense; six months ended June 30, 2024 – $281 million expense; six months ended June 30, 2023 – $136 million expense).

(2)Derivative financial instruments are recognized at fair value on the Company's balance sheets, with changes in the fair value of non-designated hedges recognized in net earnings. The amounts ultimately realized may be materially different than those amounts reflected in the financial statements due to changes in prices of the underlying items hedged, primarily crude oil, natural gas and foreign exchange. Pre-tax unrealized risk management loss (gain) for the three months ended June 30, 2024 was $nil (three months ended March 31, 2024 – $13 million loss, three months ended June 30, 2023 – $4 million gain; six months ended June 30, 2024 – $13 million loss; six months ended June 30, 2023 – $16 million loss).

(3)Unrealized foreign exchange gains and losses result primarily from the translation of US dollar denominated long-term debt to period-end exchange rates and are recognized in net earnings. Pre- and after-tax amounts for these unrealized foreign exchange gains and losses are the same.

(4)During the second quarter of 2024, the Company repaid US$500 million of 3.80% debt securities due April 2024, resulting in a pre- and after-tax foreign exchange loss of $135 million.

(5)The Company's investments have been accounted for at fair value through profit and loss and are measured each period with gains and losses recognized in net earnings. During the second quarter of 2024, the Company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for $25.65 per common share with net proceeds, after fees and expenses, of $575 million. There is $nil net tax impact on the sale as the Company has sufficient capital losses to offset the capital gain on the sale.

(6)In connection with the Company’s notice of withdrawal from Block 11B/12B in South Africa in the second quarter of 2024, the Company derecognized $62 million ($47 million after-tax) of exploration and evaluation assets through depletion, depreciation and amortization expense.


Canadian Natural Resources Limited			27			Three and six months ended June 30, 2024

Adjusted Funds Flow

Adjusted funds flow is a non-GAAP financial measure that represents cash flows from operating activities as presented in the Company's consolidated Statements of Cash Flows, adjusted for the net change in non-cash working capital, abandonment expenditures, and movements in other long-term assets. The Company considers adjusted funds flow a key measure in evaluating its performance, as it demonstrates the Company's ability to generate the cash flow necessary to fund future growth through capital investment, repay debt, and provide returns to shareholders through dividends and share buybacks. A reconciliation for adjusted funds flow, from cash flows from operating activities is presented below.



	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Cash flows from operating activities	$	4,084	$	2,868	$	2,745	$	6,952	$	4,040
Net change in non-cash working capital	(515)		15		(17)		(500)		1,891
Abandonment expenditures	129		162		100		291		237
Movements in other long-term assets (1)	(84)		93		(86)		9		3
Adjusted funds flow	$	3,614	$	3,138	$	2,742	$	6,752	$	6,171

(1)Includes the unamortized cost of the share bonus program, the accrued interest on the deferred PRT recovery, and prepaid cost of service tolls.

Adjusted Net Earnings from Operations and Adjusted Funds Flow, Per Common Share (Basic and Diluted)

Adjusted net earnings from operations and adjusted funds flow, per common share (basic and diluted), are non-GAAP ratios that represent those non-GAAP measures divided by the weighted average number of basic and diluted common shares outstanding for the period, respectively, as presented in note 15 to the financial statements. These non-GAAP measures, disclosed on a per share basis, enable a comparison to the per share amounts disclosed in the Company's financial statements prepared in accordance with IFRS.

Netback

Netback is a non-GAAP ratio that represents net cash flows provided from core activities after the impact of all costs associated with bringing a product to market, on a per unit basis. The Company considers netback a key measure in evaluating its performance, as it demonstrates the efficiency and profitability of the Company's activities. Refer to the "Operating Highlights – Exploration and Production" section of this MD&A for the netback calculations on a per unit basis for crude oil and NGLs and on a total barrels of oil equivalent basis.

The netback calculations include the non-GAAP financial measures: realized price and transportation, reconciled below to their respective line item in note 18 to the financial statements.


Canadian Natural Resources Limited			28			Three and six months ended June 30, 2024

Realized Price ($/bbl and $/BOE) – Exploration and Production

Realized price ($/bbl and $/BOE) is a non-GAAP ratio calculated as realized crude oil and NGLs sales and total realized BOE sales (non-GAAP financial measures) divided by respective sales volumes. Realized crude oil and NGLs sales and total realized BOE sales exclude the impact of blending and feedstock costs and other by-product sales. The Company considers realized price a key measure in evaluating its performance, as it demonstrates the realized pricing per unit the Company obtained on the market for its crude oil and NGLs sales volumes and BOE sales volumes.

Reconciliations for Exploration and Production realized crude oil and NGLs sales and BOE sales and the calculations for realized price are presented below.


	Three Months Ended						Six Months Ended
($ millions, except bbl/d and $/bbl)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Crude oil and NGLs (bbl/d)
North America	509,674		494,621		466,284		502,148		473,623
International
North Sea	12,682		13,468		19,991		13,075		10,051
Offshore Africa	7,800		8,046		18,603		7,923		14,521
Total International	20,482		21,514		38,594		20,998		24,572
Total sales volumes	530,156		516,135		504,878		523,146		498,195

Crude oil and NGLs sales (1)	$	5,484	$	4,505	$	4,405	$	9,989	$	8,246

Less: Blending and feedstock costs (2)	1,303		1,217		1,094		2,520		2,332
Realized crude oil and NGLs sales	$	4,181	$	3,288	$	3,311	$	7,469	$	5,914
Realized price ($/bbl)	$	86.64	$	70.01	$	72.06	$	78.43	$	65.58

(1)Crude oil and NGLs sales in note 18 to the financial statements.

(2)Blending and feedstock costs are a component of transportation, blending and feedstock expense as reconciled below in the "Transportation – Exploration and Production" section.


	Three Months Ended						Six Months Ended
($ millions, except BOE/d and $/BOE)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Barrels of oil equivalent (BOE/d)
North America	859,536		850,336		811,590		854,936		823,500
International
North Sea	12,959		13,709		20,269		13,334		10,399
Offshore Africa	9,393		9,924		20,436		9,658		16,221
Total International	22,352		23,633		40,705		22,992		26,620
Total sales volumes	881,888		873,969		852,295		877,928		850,120

Barrels of oil equivalent sales (1)	$	5,788	$	5,004	$	4,884	$	10,792	$	9,547

Less: Blending and feedstock costs (2)	1,303		1,217		1,094		2,520		2,332
Less: Sulphur expense (income)	3		1		(5)		4		(13)
Realized barrels of oil equivalent sales	$	4,482	$	3,786	$	3,795	$	8,268	$	7,228
Realized price ($/BOE)	$	55.84	$	47.60	$	48.94	$	51.74	$	46.98

(1)Barrels of oil equivalent sales includes crude oil and NGLs sales and natural gas sales in note 18 to the financial statements.

(2)Blending and feedstock costs are a component of transportation, blending and feedstock expense as reconciled below in the "Transportation – Exploration and Production" section.


Canadian Natural Resources Limited			29			Three and six months ended June 30, 2024

Transportation – Exploration and Production

Transportation ($/BOE, $/bbl and $/Mcf) is a non-GAAP ratio calculated as transportation (a non-GAAP financial measure) divided by the respective sales volumes. The Company calculates transportation to demonstrate its cost to deliver products to the market excluding the impact of blending costs. A reconciliation for Exploration and Production transportation and the calculations for transportation on a per unit basis are presented below.


	Three Months Ended						Six Months Ended
($ millions, except $ per unit amounts)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Transportation, blending and feedstock (1)	$	1,712	$	1,560	$	1,413	$	3,272	$	2,959

Less: Blending and feedstock costs	1,303		1,217		1,094		2,520		2,332

Transportation	$	409	$	343	$	319	$	752	$	627
Transportation ($/BOE)	$	5.09	$	4.31	$	4.11	$	4.71	$	4.08

Amounts attributed to crude oil and NGLs	$	289	$	217	$	210	$	506	$	410
Transportation ($/bbl)	$	5.98	$	4.63	$	4.57	$	5.31	$	4.54
Amounts attributed to natural gas	$	120	$	126	$	109	$	246	$	217
Transportation ($/Mcf)	$	0.63	$	0.64	$	0.58	$	0.63	$	0.57

(1)Transportation, blending and feedstock in note 18 to the financial statements.

North America – Realized Product Prices and Royalties

Realized crude oil and NGLs price ($/bbl) is a non-GAAP ratio calculated as realized crude oil and NGLs sales (non-GAAP financial measure) divided by sales volumes. Realized crude oil and NGLs sales exclude the impact of blending costs. The Company considers the realized crude oil and NGLs price a key measure in evaluating its performance, as it demonstrates the realized pricing per unit that the Company obtained on the market for its crude oil and NGLs sales volumes.

Crude oil and NGLs royalty rate is a non-GAAP ratio that is calculated as crude oil and NGLs royalties divided by realized crude oil and NGLs sales. The Company considers crude oil and NGLs royalty rate a key measure in evaluating its performance, as it describes the Company's royalties for crude oil and NGLs sales volumes on a per unit basis.

A reconciliation for North America realized crude oil and NGLs sales and the calculations for realized crude oil and NGLs prices and the royalty rates are presented below.


	Three Months Ended						Six Months Ended
($ millions, except $/bbl and royalty rates)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Crude oil and NGLs sales (1)	$	5,269	$	4,284	$	4,040	$	9,553	$	7,789
Less: Blending and feedstock costs (2)	1,303		1,217		1,094		2,520		2,332
Realized crude oil and NGLs sales	$	3,966	$	3,067	$	2,946	$	7,033	$	5,457
Realized crude oil and NGLs prices ($/bbl)	$	85.49	$	68.14	$	69.44	$	76.94	$	63.66

Crude oil and NGLs royalties (3)	$	838	$	563	$	491	$	1,401	$	928
Crude oil and NGLs royalty rates	21%		18%		17%		20%		17%

(1)Crude oil and NGLs sales in note 18 to the financial statements.

(2)Blending and feedstock costs are a component of transportation, blending and feedstock expense as reconciled above in the "Transportation – Exploration and Production" section.

(3)Item is a component of royalties in note 18 to the financial statements.


Canadian Natural Resources Limited			30			Three and six months ended June 30, 2024

Realized Product Prices and Transportation – Oil Sands Mining and Upgrading

Realized SCO sales price ($/bbl) is a non-GAAP ratio calculated as realized SCO sales (non-GAAP financial measure) excluding the impact of blending and feedstock costs, divided by SCO sales volumes. The Company considers realized SCO sales price a key measure in evaluating its performance, as it demonstrates the realized pricing per unit that the Company obtained on the market for its SCO sales volumes.

Transportation ($/bbl) is a non-GAAP ratio calculated as transportation (a non-GAAP financial measure) divided by SCO sales volumes. The Company calculates transportation to demonstrate its cost to deliver product to the market excluding the impact of blending and feedstock costs.

Reconciliations for Oil Sands Mining and Upgrading realized SCO sales and transportation and the calculations for realized SCO sales price and transportation on a per unit basis are presented below.


	Three Months Ended						Six Months Ended
($ millions, except for bbl/d and $/bbl)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023

SCO sales volumes (bbl/d)	398,528		453,794		350,041		426,161		405,721

Crude oil and NGLs sales (1)	$	4,525	$	4,168	$	3,546	$	8,693	$	8,028

Less: Blending and feedstock costs	579		499		517		1,078		1,004
Realized SCO sales	$	3,946	$	3,669	$	3,029	$	7,615	$	7,024
Realized SCO sales price ($/bbl)	$	108.81	$	88.84	$	95.08	$	98.18	$	95.64

Transportation, blending and feedstock (2)	$	682	$	568	$	582	$	1,250	$	1,132
Less: Blending and feedstock costs	579		499		517		1,078		1,004
Transportation	$	103	$	69	$	65	$	172	$	128
Transportation ($/bbl)	$	2.81	$	1.67	$	2.03	$	2.21	$	1.74

(1)Crude oil and NGLs sales in note 18 to the financial statements.

(2)Transportation, blending and feedstock in note 18 to the financial statements.

Change in Composition of Non-GAAP Financial Measure

During the fourth quarter of 2023, the Company revised the composition of its Net Capital Expenditures non-GAAP financial measure to exclude expenditures related to the Company's abandonment program. The revision was made during Management's assessment of its annual capital budgeting process, and will provide users a better representation of the Company's performance and the composition of its capital budget. The composition of this measure has been updated for all periods presented.

Net Capital Expenditures

Net capital expenditures is a non-GAAP financial measure that represents cash flows used in investing activities as presented in the Company's consolidated Statements of Cash Flows, adjusted for the net change in non-cash working capital, and cash flows from investing activities not included in the Company's capital budget. The Company includes acquisition and disposition capital in net capital expenditures. The Company considers net capital expenditures a key measure in evaluating its performance, as it provides an understanding of the Company's capital spending activities in comparison to the Company's annual capital budget. A reconciliation of net capital expenditures is presented below.


	Three Months Ended						Six Months Ended
($ millions)	Jun 30 2024		Mar 31 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Cash flows used in investing activities	$	1,015	$	1,392	$	1,560	$	2,407	$	2,713
Net proceeds from investment	575		—		—		575		—
Net change in non-cash working capital	31		(279)		9		(248)		113


Net capital expenditures	1,621		1,113		1,569		2,734		2,826
Abandonment expenditures	129		162		100		291		237

Capital and abandonment expenditures	$	1,750	$	1,275	$	1,669	$	3,025	$	3,063


Canadian Natural Resources Limited			31			Three and six months ended June 30, 2024

Liquidity

Liquidity is a non-GAAP financial measure that represents the availability of readily available undrawn bank credit facilities, cash and cash equivalents, and other highly liquid assets to meet short-term funding requirements and to assist in assessing the Company's financial position. The Company's calculation of liquidity is presented below.


($ millions)	Jun 30 2024		Mar 31 2024		Dec 31 2023		Jun 30 2023
Undrawn bank credit facilities	$	5,450	$	5,450	$	5,450	$	4,954
Cash and cash equivalents	915		767		877		122
Investments (1)	—		600		525		524
Liquidity	$	6,365	$	6,817	$	6,852	$	5,600

(1)During the second quarter of 2024, the Company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for $25.65 per common share with net proceeds, after fees and expenses, of $575 million.

Long-term Debt, net

Long-term debt, net, is a capital management measure that represents long-term debt, including the current portion of long-term debt, less cash and cash equivalents, as disclosed in note 14 to the financial statements. A reconciliation of long-term debt, net is presented below.


($ millions)	Jun 30 2024		Mar 31 2024		Dec 31 2023		Jun 30 2023
Long-term debt	$	10,149	$	11,040	$	10,799	$	12,155
Less: cash and cash equivalents	915		767		877		122
Long-term debt, net	$	9,234	$	10,273	$	9,922	$	12,033

Debt to Book Capitalization

Debt to book capitalization is a capital management measure intended to enable financial statement users to evaluate the Company's capital structure, as disclosed in note 14 to the financial statements.

After-Tax Return on Average Capital Employed

After-tax return on average capital employed as defined by the Company is a non-GAAP ratio. The ratio is calculated as net earnings plus after-tax interest and other financing expense for the twelve month trailing period; as a percentage of average capital employed (defined as current and long-term debt plus shareholders' equity) for the twelve month trailing period. The Company considers this ratio a key measure in evaluating the Company's ability to generate profit and the efficiency with which it employs capital. A reconciliation of the Company's after-tax return on average capital employed is presented below.


($ millions, except ratios)	Jun 30 2024		Mar 31 2024		Dec 31 2023		Jun 30 2023
Interest adjusted after-tax return:
Net earnings, 12 months trailing	$	7,673	$	7,421	$	8,233	$	7,596
Interest and other financing expense, net of tax, 12 months trailing (1)	461		477		490		431
Interest adjusted after-tax return	$	8,134	$	7,898	$	8,723	$	8,027

12 months average current portion long-term debt (2)	$	1,506	$	1,541	$	1,259	$	1,274
12 months average long-term debt (2)	9,651		9,992		10,354		10,961
12 months average common shareholders' equity (2)	39,418		39,240		38,974		38,577
12 months average capital employed	$	50,575	$	50,773	$	50,587	$	50,812

After-tax return on average capital employed	16.1%		15.6%		17.2%		15.8%

(1)The blended tax rate on interest was 23% for each of the periods presented.

(2)For the purpose of this non-GAAP ratio, the measurement of average current and long-term debt and common shareholders' equity are determined on a consistent basis, as an average of the opening and quarterly period end values for the 12 month trailing period for each of the periods presented.


Canadian Natural Resources Limited			32			Three and six months ended June 30, 2024

CANADIAN NATURAL RESOURCES LIMITED


UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
JULY 31, 2024

INTERIM CONSOLIDATED FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS


As at	Note	Jun 30 2024		Dec 31 2023
(millions of Canadian dollars, unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	915	$	877
Accounts receivable		3,652		3,189

Inventory		2,483		2,034
Prepaids and other		301		471
Investments	7	—		525
Current portion of other long-term assets	8	79		71
		7,430		7,167
Exploration and evaluation assets	4	2,169		2,208
Property, plant and equipment	5	64,336		64,581
Lease assets	6	1,458		1,458
Other long-term assets	8	551		541
		$	75,944	$	75,955
LIABILITIES
Current liabilities
Accounts payable		$	1,852	$	1,418
Accrued liabilities		4,165		3,534
Current income taxes payable		58		—
Current portion of long-term debt	9	820		980
Current portion of other long-term liabilities	10	1,549		1,503
		8,444		7,435
Long-term debt	9	9,329		9,819
Other long-term liabilities	10	8,505		8,686
Deferred income taxes		10,197		10,183
		36,475		36,123
SHAREHOLDERS' EQUITY
Share capital	12	11,080		10,712
Retained earnings		28,167		28,948
Accumulated other comprehensive income	13	222		172
		39,469		39,832
		$	75,944	$	75,955

Commitments and contingencies (note 17)

Approved by the Board of Directors on July 31, 2024.


Canadian Natural Resources Limited			1			Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF EARNINGS


(millions of Canadian dollars, except per common share amounts, unaudited)		Three Months Ended				Six Months Ended
	Note	Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Product sales	18	$	10,622	$	8,846	$	20,044	$	18,394
Less: royalties		(1,571)		(956)		(2,749)		(1,874)
Revenue		9,051		7,890		17,295		16,520
Expenses
Production		1,979		2,211		4,136		4,375
Transportation, blending and feedstock		2,655		2,330		4,939		4,664
Depletion, depreciation and amortization	4,5,6	1,649		1,397		3,182		2,815
Administration		124		119		250		225
Share-based compensation	10	(13)		70		281		136
Asset retirement obligation accretion	10	97		91		194		183
Interest and other financing expense		158		178		296		332
Risk management loss (gain)	16	18		(31)		56		(10)
Foreign exchange loss (gain)		103		(202)		353		(216)


Loss (gain) from investments	7	25		(45)		(56)		(44)
		6,795		6,118		13,631		12,460
Earnings before taxes		2,256		1,772		3,664		4,060
Current income tax expense	11	520		313		921		772
Deferred income tax expense (recovery)	11	21		(4)		41		26
Net earnings		$	1,715	$	1,463	$	2,702	$	3,262
Net earnings per common share (1)
Basic	15	$	0.80	$	0.67	$	1.26	$	1.49
Diluted	15	$	0.80	$	0.66	$	1.25	$	1.47

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).


Canadian Natural Resources Limited			2			Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME


	Three Months Ended				Six Months Ended
(millions of Canadian dollars, unaudited)	Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Net earnings	$	1,715	$	1,463	$	2,702	$	3,262
Items that may be reclassified subsequently to net earnings
Net change in derivative financial instruments designated as cash flow hedges
Unrealized income during the period, net of taxes of $nil (2023 – $nil) – three months ended; $nil (2023 – $nil) – six months ended	—		1		—		1
Reclassification to net earnings, net of taxes of $nil (2023 – $nil) – three months ended; $nil (2023 – $nil) – six months ended	—		(1)		(1)		(2)
	—		—		(1)		(1)
Foreign currency translation adjustment
Translation of net investment	17		(30)		51		(31)
Other comprehensive income (loss), net of taxes	17		(30)		50		(32)
Comprehensive income	$	1,732	$	1,433	$	2,752	$	3,230


Canadian Natural Resources Limited			3			Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY


		Six Months Ended
(millions of Canadian dollars, unaudited)	Note	Jun 30 2024		Jun 30 2023
Share capital	12
Balance – beginning of period		$	10,712	$	10,294

Issued upon exercise of stock options		227		190
Previously recognized liability on stock options exercised for common shares		285		196

Purchase of common shares under Normal Course Issuer Bid		(144)		(146)
Balance – end of period		11,080		10,534
Retained earnings
Balance – beginning of period		28,948		27,672
Net earnings		2,702		3,262
Dividends on common shares	12	(2,242)		(1,972)
Purchase of common shares under Normal Course Issuer Bid, including tax	12	(1,241)		(1,029)
Balance – end of period		28,167		27,933
Accumulated other comprehensive income	13
Balance – beginning of period		172		209
Other comprehensive income (loss), net of taxes		50		(32)
Balance – end of period		222		177
Shareholders' equity		$	39,469	$	38,644


Canadian Natural Resources Limited			4			Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF CASH FLOWS


		Three Months Ended				Six Months Ended
(millions of Canadian dollars, unaudited)	Note	Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Operating activities
Net earnings		$	1,715	$	1,463	$	2,702	$	3,262
Non-cash items
Depletion, depreciation and amortization	4,5,6	1,649		1,397		3,182		2,815
Share-based compensation		(13)		70		281		136
Asset retirement obligation accretion		97		91		194		183
Unrealized risk management (gain) loss		—		(4)		13		16
Unrealized foreign exchange (gain) loss		(15)		(231)		254		(234)

Loss (gain) from investments	7	25		(40)		(50)		(33)

Deferred income tax expense (recovery)		21		(4)		41		26
Realized foreign exchange loss on repayment of US dollar debt securities		135		—		135		—

Abandonment expenditures	10	(129)		(100)		(291)		(237)
Other		84		86		(9)		(3)
Net change in non-cash working capital		515		17		500		(1,891)
Cash flows from operating activities		4,084		2,745		6,952		4,040
Financing activities
Issue of bank credit facilities and commercial paper, net	9	—		345		—		933
Repayment of medium-term notes	9	(320)		—		(320)		(11)
Repayment of US dollar debt securities	9	(688)		—		(688)		—


Payment of lease liabilities	6	(78)		(68)		(157)		(135)
Issue of common shares on exercise of stock options	12	52		47		227		190
Dividends on common shares		(1,125)		(989)		(2,201)		(1,927)
Purchase of common shares under Normal Course Issuer Bid	12	(762)		(490)		(1,368)		(1,175)

Cash flows used in financing activities		(2,921)		(1,155)		(4,507)		(2,125)
Investing activities
Net proceeds (expenditures) on exploration and evaluation assets	4,18	4		(7)		(65)		(35)
Net expenditures on property, plant and equipment	5,18	(1,625)		(1,562)		(2,669)		(2,791)

Net proceeds from investment	7	575		—		575		—


Net change in non-cash working capital		31		9		(248)		113
Cash flows used in investing activities		(1,015)		(1,560)		(2,407)		(2,713)
Increase (decrease) in cash and cash equivalents		148		30		38		(798)
Cash and cash equivalents – beginning of period		767		92		877		920
Cash and cash equivalents – end of period		$	915	$	122	$	915	$	122
Interest paid on long-term debt, net		$	126	$	135	$	307	$	303
Income taxes paid, net		$	437	$	651	$	635	$	2,207


Canadian Natural Resources Limited			5			Three and six months ended June 30, 2024

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(tabular amounts in millions of Canadian dollars, unless otherwise stated, unaudited)

1. ACCOUNTING POLICIES

Canadian Natural Resources Limited (the "Company") is a senior independent crude oil and natural gas exploration, development and production company. The Company's exploration and production operations are focused in North America, largely in Western Canada; the United Kingdom portion of the North Sea; and Côte d'Ivoire in Offshore Africa.

The Oil Sands Mining and Upgrading segment produces synthetic crude oil through bitumen mining and upgrading operations at Horizon Oil Sands ("Horizon") and through the Company's direct and indirect interest in the Athabasca Oil Sands Project ("AOSP").

Within Western Canada in the Midstream and Refining segment, the Company maintains certain activities that include pipeline operations, an electricity co-generation system and an investment in the North West Redwater Partnership ("NWRP"), a general partnership formed to upgrade and refine bitumen in the Province of Alberta.

The Company was incorporated in Alberta, Canada. The address of its registered office is 2100, 855 - 2 Street S.W., Calgary, Alberta, Canada.

These interim consolidated financial statements and the related notes have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34 "Interim Financial Reporting", following the same accounting policies as the audited consolidated financial statements of the Company as at December 31, 2023, except as disclosed in note 2. These interim consolidated financial statements contain disclosures that are supplemental to the Company's annual audited consolidated financial statements. Certain disclosures normally required to be included in the notes to the annual audited consolidated financial statements have been condensed. These interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2023.

Critical Accounting Estimates and Judgements

The Company has made estimates, assumptions, and judgements regarding certain assets, liabilities, revenues and expenses in the preparation of these interim consolidated financial statements, primarily related to unsettled transactions and events as of the date of these interim consolidated financial statements. Accordingly, actual results may differ from estimated amounts, and those differences may be material.

Common Share Split and Comparative Figures

2. CHANGE IN ACCOUNTING POLICIES

In January 2020, the IASB issued amendments to IAS 1 "Presentation of Financial Statements" to clarify that liabilities are classified as either current or non-current, depending on the existence of the substantive right at the end of the reporting period for an entity to defer settlement of the liability for at least twelve months after the reporting period. In October 2022, the IASB issued further amendments to specify that the classification of debt as current or non-current at the reporting date is not affected by covenants to be complied with after the reporting date. The amendments were adopted on January 1, 2024 and had no impact on the Company's interim consolidated financial statements.


Canadian Natural Resources Limited			6			Three and six months ended June 30, 2024

3. ACCOUNTING STANDARDS ISSUED BUT NOT YET APPLIED

In April 2024, the IASB issued IFRS 18 "Presentation and Disclosure in Financial Statements", which provides presentation and disclosure requirements for the primary financial statements and related notes, replacing IAS 1 “Presentation of Financial Statements". IFRS 18 introduces defined categories for income and expenses and requires disclosure of new defined subtotals, including operating profit. The new standard also requires additional notes for management performance measures and disclosure of certain expenses by nature. There are some associated changes to the statement of cash flows, including the starting point for the calculation of cash flows from operating activities and the categorization of interest and dividends. IFRS 18 is effective January 1, 2027, with early adoption permitted. The new standard is required to be adopted retrospectively. The Company is assessing the impact of IFRS 18 on the Company’s consolidated financial statements.

In May 2024, the IASB issued amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" to clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled using an electronic payment system. The amendments also clarify the requirements for assessing whether a financial asset meets the solely payments of principal and interest criterion, and adds disclosure requirements for financial instruments with certain contingent features and for equity investments designated at fair value through other comprehensive income. The amendments are effective January 1, 2026, with early adoption permitted. The amendments are required to be adopted retrospectively by adjusting the opening balance of financial assets, financial liabilities and retained earnings at the date of adoption. The Company is assessing the impact of the amendments on the Company’s consolidated financial statements.

4. EXPLORATION AND EVALUATION ASSETS


	Exploration and Production						Oil Sands Mining and Upgrading		Total
	North America		North Sea		Offshore Africa
Cost
At December 31, 2023	$	2,031	$	—	$	100	$	77	$	2,208
Additions, net	68		—		(3)		—		65
Transfers to property, plant and equipment	(42)		—		—		—		(42)
Derecognitions and other (1)	—		—		(62)		—		(62)

At June 30, 2024	$	2,057	$	—	$	35	$	77	$	2,169


Canadian Natural Resources Limited			7			Three and six months ended June 30, 2024

5. PROPERTY, PLANT AND EQUIPMENT


	Exploration and Production						Oil Sands Mining and Upgrading		Midstream and Refining		Head Office		Total
	North America		North Sea		Offshore Africa
Cost





At December 31, 2023	$	83,483	$	8,606	$	4,409	$	49,375	$	484	$	566	$	146,923
Additions	1,445		7		81		1,117		7		20		2,677

Transfers from exploration & evaluation assets	42		—		—		—		—		—		42

Derecognitions (1)	(309)		—		—		(341)		—		—		(650)

Foreign exchange adjustments and other	—		315		162		—		—		—		477

At June 30, 2024	$	84,661	$	8,928	$	4,652	$	50,151	$	491	$	586	$	149,469
Accumulated depletion and depreciation




At December 31, 2023	$	58,840	$	8,382	$	3,358	$	11,105	$	213	$	444	$	82,342
Expense	1,852		29		71		992		8		13		2,965
Derecognitions (1)	(309)		—		—		(341)		—		—		(650)


Foreign exchange adjustments and other	—		307		158		11		—		—		476
At June 30, 2024	$	60,383	$	8,718	$	3,587	$	11,767	$	221	$	457	$	85,133
Net book value
At June 30, 2024	$	24,278	$	210	$	1,065	$	38,384	$	270	$	129	$	64,336
At December 31, 2023	$	24,643	$	224	$	1,051	$	38,270	$	271	$	122	$	64,581

(1)An asset is derecognized when no future economic benefits are expected to arise from its continued use or disposal.

6. LEASES

Lease assets


	Product transportation and storage		Field equipment and power		Offshore vessels and equipment		Office leases and other		Total
At December 31, 2023	$	840	$	482	$	71	$	65	$	1,458
Additions	5		62		31		53		151
Depreciation	(49)		(71)		(25)		(10)		(155)

Foreign exchange adjustments and other	2		2		2		(2)		4
At June 30, 2024	$	798	$	475	$	79	$	106	$	1,458

Lease liabilities

The Company measures its lease liabilities at the discounted value of its lease payments during the lease term. Lease liabilities as at June 30, 2024 were as follows:


	Jun 30 2024		Dec 31 2023
Lease liabilities	$	1,548	$	1,555
Less: current portion	276		298
	$	1,272	$	1,257


Canadian Natural Resources Limited			8			Three and six months ended June 30, 2024

Total cash outflows for leases for the three months ended June 30, 2024, including payments related to short-term leases not reported as lease assets, were $319 million (three months ended June 30, 2023 – $341 million; six months ended June 30, 2024 – $655 million; six months ended June 30, 2023 – $678 million). Interest expense on leases for the three months ended June 30, 2024 was $18 million (three months ended June 30, 2023 – $16 million; six months ended June 30, 2024 – $35 million; six months ended June 30, 2023 – $32 million).

7. INVESTMENTS


	Jun 30 2024		Dec 31 2023
Investment in PrairieSky Royalty Ltd.	$	—	$	525

The loss (gain) from investment was comprised as follows:


	Three Months Ended				Six Months Ended
	Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023

Loss (gain) from investment	$	25	$	(40)	$	(50)	$	(33)
Dividend income	—		(5)		(6)		(11)
	$	25	$	(45)	$	(56)	$	(44)

8. OTHER LONG-TERM ASSETS


	Jun 30 2024		Dec 31 2023
Long-term prepayments, contracts and other (1)	$	315	$	279
Prepaid cost of service tolls	166		179
Long-term inventory	142		141
Risk management (note 16)	7		13
	630		612
Less: current portion	79		71
	$	551	$	541

(1)Includes physical product sales contracts, accrued interest on the deferred PRT recovery, and the unamortized portion of the Company's share bonus program.

The Company has a 50% equity investment in NWRP. NWRP operates a 50,000 barrels per day bitumen upgrader and refinery that processes approximately 12,500 barrels per day of bitumen feedstock for the Company (25% toll payer) and 37,500 barrels per day of bitumen feedstock for the Alberta Petroleum Marketing Commission ("APMC") (75% toll payer), an agent of the Government of Alberta. The Company is unconditionally obligated to pay its 25% pro rata share of the debt component of the monthly fee-for-service toll over the 40-year tolling period until 2058 (note 17). Sales of diesel and refined products and associated refining tolls are recognized in the Midstream and Refining segment (note 18).

The carrying value of the Company's interest in NWRP is $nil, and as at June 30, 2024, the cumulative unrecognized share of the equity loss and partnership distributions from NWRP was $516 million (December 31, 2023 – $555 million). For the three months ended June 30, 2024, the Company's recovery of its share of unrecognized equity losses was $35 million (six months ended June 30, 2024 – recovery of unrecognized equity losses of $39 million; three months ended June 30, 2023 – unrecognized equity loss of $1 million; six months ended June 30, 2023 – unrecognized equity loss of $17 million).


Canadian Natural Resources Limited			9			Three and six months ended June 30, 2024

9. LONG-TERM DEBT


	Jun 30 2024		Dec 31 2023
Canadian dollar denominated debt, unsecured

Medium-term notes	$	966	$	1,286











US dollar denominated debt, unsecured


US dollar debt securities (June 30, 2024 – US$6,750 million; December 31, 2023 – US$7,250 million)	9,238		9,573


















Long-term debt before transaction costs and original issue discounts, net	10,204		10,859
Less: original issue discounts, net (1)	10		11
transaction costs (1) (2)	45		49
	10,149		10,799

Less: current portion of long-term debt (1) (2)	820		980
	$	9,329	$	9,819

(1)The Company has included unamortized original issue discounts and premiums, and directly attributable transaction costs in the carrying amount of the outstanding debt.

(2)Transaction costs primarily represent underwriting commissions charged as a percentage of the related debt offerings, as well as legal, rating agency and other professional fees.

Bank Credit Facilities and Commercial Paper

As at June 30, 2024, the Company had undrawn revolving bank credit facilities of $5,450 million. Details of these facilities are described below. The Company also has certain other dedicated credit facilities supporting letters of credit.

▪a $100 million demand credit facility;

▪a $500 million revolving credit facility, maturing February 2025;

▪a $2,425 million revolving syndicated credit facility, maturing June 2025; and

▪a $2,425 million revolving syndicated credit facility, maturing June 2027.

Borrowings under the Company's revolving credit facilities may be made by way of pricing referenced to CORRA, SOFR, US base rate or Canadian prime rate.

The Company's borrowings under its US commercial paper program are authorized up to a maximum of US$2,500 million.

The Company's weighted average interest rate on total long-term debt outstanding for the six months ended June 30, 2024 was 4.9% (June 30, 2023 – 4.7%).

As at June 30, 2024, letters of credit and guarantees aggregating to $703 million were outstanding (December 31, 2023 – $446 million).

Medium-Term Notes

During the second quarter of 2024, the Company repaid $320 million of 3.55% medium-term notes.

In July 2023, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to $3,000 million of medium-term notes in Canada, which expires in August 2025. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance.

US Dollar Debt Securities

During the second quarter of 2024, the Company repaid US$500 million of 3.80% US dollar debt securities.

In July 2023, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to US$3,000 million of debt securities in the United States, which expires in August 2025. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance.


Canadian Natural Resources Limited			10			Three and six months ended June 30, 2024

10. OTHER LONG-TERM LIABILITIES


	Jun 30 2024		Dec 31 2023
Asset retirement obligations	$	7,658	$	7,690
Lease liabilities (note 6)	1,548		1,555
Share-based compensation	698		780
Transportation and processing contracts	69		87
Risk management (note 16)	9		4
Other	72		73
	10,054		10,189
Less: current portion	1,549		1,503
	$	8,505	$	8,686

Asset Retirement Obligations

The Company's asset retirement obligations are expected to be settled on an ongoing basis over a period of approximately 60 years and discounted using a weighted average discount rate of 5.2% (December 31, 2023 – 5.2%) and inflation rates of up to 2% (December 31, 2023 – up to 2%). Reconciliations of the discounted asset retirement obligations were as follows:


	Jun 30 2024		Dec 31 2023
Balance – beginning of period	$	7,690	$	6,908
Liabilities incurred	12		25
Liabilities disposed, net	(4)		—
Liabilities settled	(291)		(509)
Asset retirement obligation accretion	194		366
Revision of cost, inflation and timing estimates (1)	—		621

Change in discount rates	—		314
Foreign exchange adjustments	57		(35)
Balance – end of period	7,658		7,690
Less: current portion	702		634
	$	6,956	$	7,056

(1)Includes normal course revisions of cost, inflation and timing estimates, as well as revisions related to cost estimate increases in 2023 on future abandonment of the Ninian field assets in the North Sea.

Share-Based Compensation

The liability for share-based compensation includes costs incurred under the Company's Stock Option Plan and Performance Share Unit ("PSU") plans. The Company's Stock Option Plan provides current employees with the right to elect to receive common shares or a cash payment in exchange for stock options surrendered. The PSU plan provides certain executive employees of the Company with the right to receive a cash payment, the amount of which is determined with reference to the value of the Company's shares, and by individual employee performance and the extent to which certain other performance measures are met.


Canadian Natural Resources Limited			11			Three and six months ended June 30, 2024

The Company recognizes a liability for potential cash settlements under these plans. The current portion of the liability represents the maximum amount of the liability payable within the next twelve month period if all vested stock options and PSUs are settled in cash.


	Jun 30 2024		Dec 31 2023
Balance – beginning of period	$	780	$	832
Share-based compensation expense	281		491
Cash payment for stock options surrendered and PSUs vested	(81)		(110)
Transferred to common shares	(285)		(435)
Other	3		2
Balance – end of period	698		780
Less: current portion	539		538
	$	159	$	242

11. INCOME TAXES

The provision for income tax was as follows:


	Three Months Ended				Six Months Ended
Expense (recovery)	Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Current corporate income tax – North America (1)	$	548	$	299	$	960	$	779
Current corporate income tax – North Sea	(13)		(4)		(18)		2
Current corporate income tax – Offshore Africa	5		20		10		30
Current PRT (2) – North Sea	(6)		(5)		(20)		(45)
Other taxes	(14)		3		(11)		6
Current income tax	520		313		921		772
Deferred corporate income tax	14		(15)		28		8
Deferred PRT (2) – North Sea	7		11		13		18
Deferred income tax	21		(4)		41		26
Income tax	$	541	$	309	$	962	$	798

(1)Includes North America Exploration and Production, Oil Sands Mining and Upgrading, and Midstream and Refining segments.

(2)Petroleum Revenue Tax.

12. SHARE CAPITAL

Authorized

Preferred shares issuable in a series.

Unlimited number of common shares without par value.


	Six Months Ended Jun 30, 2024
Issued Common Shares(1)	Number of shares (thousands)	Amount
Balance – beginning of period	2,144,815	$	10,712
Issued upon exercise of stock options	10,924	227
Previously recognized liability on stock options exercised for common shares	—	285

Purchase of common shares under Normal Course Issuer Bid	(28,100)	(144)
Balance – end of period	2,127,639	$	11,080

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).


Canadian Natural Resources Limited			12			Three and six months ended June 30, 2024

Dividends(1)

The Company has paid regular quarterly dividends in each year since 2001. The dividend policy undergoes periodic review by the Board of Directors and is subject to change.

On February 28, 2024, the Board of Directors approved a 5% increase in the quarterly dividend to $0.525 per common share, beginning with the dividend paid on April 5, 2024.

Normal Course Issuer Bid(1)

Share-Based Compensation – Stock Options(1)

The following table summarizes information relating to stock options outstanding as at June 30, 2024:


	Six Months Ended Jun 30, 2024
	Stock options (thousands)	Weighted average exercise price
Outstanding – beginning of period	52,410	$	26.80
Granted	14,241	$	44.59
Exercised for common shares	(10,924)	$	20.75
Surrendered for cash settlement	(294)	$	22.16
Forfeited	(2,582)	$	28.27
Outstanding – end of period	52,851	$	32.80
Exercisable – end of period	7,539	$	23.85

The Stock Option Plan is a "rolling 7%" plan, whereby the aggregate number of common shares that may be reserved for issuance under the plan shall not exceed 7% of the common shares outstanding from time to time.

13. ACCUMULATED OTHER COMPREHENSIVE INCOME

The components of accumulated other comprehensive income, net of taxes, were as follows:


	Jun 30 2024		Jun 30 2023
Derivative financial instruments designated as cash flow hedges	$	71	$	74
Foreign currency translation adjustment	151		103
	$	222	$	177

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).


Canadian Natural Resources Limited			13			Three and six months ended June 30, 2024

14. CAPITAL DISCLOSURES

The Company has defined its capital to mean its long-term debt and consolidated shareholders' equity, as determined at each reporting date.

The Company's objectives when managing its capital structure are to maintain financial flexibility and balance to enable the Company to access capital markets to sustain its on-going operations and growth strategies. The Company primarily monitors capital on the basis of an internally derived financial measure referred to as its "debt to book capitalization ratio", which is the ratio of current and long-term debt less cash and cash equivalents divided by the sum of the carrying value of shareholders' equity plus current and long-term debt less cash and cash equivalents. The Company's internal targeted range for its debt to book capitalization ratio is 25% to 45%. The ratio may fall below or exceed the targeted range depending on the execution of the Company's capital program, commodity price and foreign currency volatility, and the timing of acquisitions. As at June 30, 2024, the ratio was below the target range at 19.0%.

Readers are cautioned that the debt to book capitalization ratio is not defined by IFRS and this financial measure may not be comparable to similar measures presented by other companies. Further, there are no assurances that the Company will continue to use this measure to monitor capital or will not alter the method of calculation of this measure in the future.


	Jun 30 2024		Dec 31 2023
Long-term debt	$	10,149	$	10,799
Less: cash and cash equivalents	915		877
Long-term debt, net	$	9,234	$	9,922
Total shareholders' equity	$	39,469	$	39,832
Debt to book capitalization	19.0%		19.9%

15. NET EARNINGS PER COMMON SHARE(1)


		Three Months Ended				Six Months Ended
		Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Weighted average common shares outstanding – basic (thousands of shares)		2,133,374		2,190,136		2,137,730		2,195,501
Effect of dilutive stock options (thousands of shares)		16,089		21,028		16,647		22,076
Weighted average common shares outstanding – diluted (thousands of shares)		2,149,463		2,211,164		2,154,377		2,217,577
Net earnings		$	1,715	$	1,463	$	2,702	$	3,262

Net earnings per common share	– basic	$	0.80	$	0.67	$	1.26	$	1.49
	– diluted	$	0.80	$	0.66	$	1.25	$	1.47

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).


Canadian Natural Resources Limited			14			Three and six months ended June 30, 2024

16. FINANCIAL INSTRUMENTS

The Company's financial instruments are comprised of cash and cash equivalents, accounts receivable, investments, risk management assets and liabilities, accounts payable, accrued liabilities, lease liabilities, and long-term debt. These financial instruments, with the exception of investments and risk management assets and liabilities, are classified as financial assets and liabilities at amortized cost. Investments are classified as financial assets at fair value through profit or loss. Risk management assets and liabilities are classified as derivatives held for trading or as cash flow hedges.

The estimated fair values of derivative financial instruments in Level 2 at each measurement date have been determined based on appropriate internal valuation methodologies and/or third party indications, including quoted forward prices for commodities, foreign exchange rates, interest yield curves and other volatility factors.

The changes in estimated fair values of derivative financial instruments included in the risk management asset (liability) were recognized in the financial statements as follows:


Asset (liability)	Jun 30 2024		Dec 31 2023
Balance – beginning of period	$	9	$	6

Net change in fair value of outstanding derivative financial instruments recognized in:
Risk management activities (1) (2)	(11)		3
Foreign exchange	—		—


Balance – end of period	(2)		9
Less: current portion	(4)		8
	$	2	$	1

(1)Risk management assets and liabilities are disclosed in note 8 and note 10, respectively.

(2)In the fourth quarter of 2023, the Company entered into 50,000 MMBtu/d of US$1.82 AECO fixed price financial contracts for the period of January to December 2024.

Net loss (gain) from risk management activities was as follows:


	Three Months Ended				Six Months Ended
	Jun 30 2024		Jun 30 2023		Jun 30 2024		Jun 30 2023
Net realized risk management loss (gain)	$	18	$	(27)	$	43	$	(26)
Net unrealized risk management (gain) loss	—		(4)		13		16
	$	18	$	(31)	$	56	$	(10)

The carrying amounts of the Company's financial instruments approximated their fair value, except for fixed rate long-term debt. The Company's financial instruments are categorized as Level 1 with the exception of risk management assets and liabilities, which are categorized as Level 2. There were no transfers between Level 1, 2, and 3 financial instruments. The fair values of the Company's fixed rate long-term debt is outlined below:


	Jun 30, 2024

	Carrying amount		Level 1 Fair Value



Fixed rate long-term debt (1) (2)	$	10,149	$	9,991

(1)The fair value of fixed rate long-term debt has been determined based on quoted market prices.

(2)Includes the current portion of fixed rate long-term debt.


Canadian Natural Resources Limited			15			Three and six months ended June 30, 2024

Financial Risk Factors

The Company's financial risks are consistent with those discussed in notes 1, 4 and 19 of the Company's audited consolidated financial statements for the year ended December 31, 2023.

a) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's market risk is comprised of commodity price risk, interest rate risk, and foreign currency exchange rate risk.

Commodity price risk management

The Company periodically uses commodity derivative financial instruments to manage its exposure to commodity price risk associated with the sale of its future crude oil and natural gas production and with natural gas purchases.

Interest rate risk management

The Company is exposed to interest rate price risk on its fixed rate long-term debt and to interest rate cash flow risk on its floating rate long-term debt. At June 30, 2024, the Company had no interest rate swap contracts outstanding.

Foreign currency exchange rate risk management

The Company is exposed to foreign currency exchange rate risk in Canada primarily related to its US dollar denominated long-term debt, commercial paper and working capital. The Company is also exposed to foreign currency exchange rate risk on transactions conducted in other currencies and in the carrying value of its foreign subsidiaries.

As at June 30, 2024, the Company had US$1,509 million of foreign currency forward contracts outstanding (December 31, 2023 – US$1,003 million), with original terms of up to 90 days, all of which were designated as derivatives held for trading.

b) Credit risk

Credit risk is the risk that a party to a financial instrument will cause a financial loss to the Company by failing to discharge an obligation.

Counterparty credit risk management

The Company's accounts receivable are mainly with customers in the crude oil and natural gas industry and are subject to normal industry credit risks. The Company manages these risks by reviewing its exposure to individual companies on a regular basis and, where appropriate, ensuring that parental guarantees or letters of credit are in place to minimize the impact in the event of default. As at June 30, 2024, substantially all of the Company's accounts receivable were due within normal trade terms.

The Company is also exposed to possible losses in the event of nonperformance by counterparties to derivative financial instruments; however, the Company manages this credit risk by entering into agreements with counterparties that are substantially all investment grade financial institutions. The carrying amount of financial assets approximates the maximum credit exposure.

c) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.

Management of liquidity risk requires the Company to maintain sufficient cash and cash equivalents, along with other sources of capital, consisting primarily of cash flow from operating activities, available credit facilities, commercial paper and access to debt capital markets, to meet obligations as they become due. The Company believes it has adequate bank credit facilities to provide liquidity to manage fluctuations in the timing of the receipt and/or disbursement of operating cash flows.


Canadian Natural Resources Limited			16			Three and six months ended June 30, 2024

As at June 30, 2024, the maturity dates of the Company's financial liabilities were as follows:


	Less than 1 year		1 to less than 2 years		2 to less than 5 years		Thereafter
Accounts payable	$	1,852	$	—	$	—	$	—
Accrued liabilities	$	4,165	$	—	$	—	$	—
Long-term debt (1)	$	820	$	821	$	2,377	$	6,186
Other long-term liabilities (2)	$	285	$	209	$	412	$	651
Interest and other financing expense (3)	$	565	$	509	$	1,268	$	3,310

(1)Long-term debt represents principal repayments only and does not reflect interest, original issue discounts and premiums or transaction costs.

17. COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Company has committed to certain payments. The following table summarizes the Company's commitments as at June 30, 2024:


	Remaining 2024		2025		2026		2027		2028		Thereafter
Product transportation and processing (1)	$	890	$	1,736	$	1,585	$	1,503	$	1,386	$	14,017
North West Redwater Partnership service toll (2)	$	74	$	148	$	130	$	115	$	119	$	4,729
Offshore vessels and equipment	$	20	$	35	$	—	$	—	$	—	$	—
Field equipment and power	$	27	$	25	$	23	$	22	$	22	$	193
Other	$	75	$	111	$	111	$	22	$	23	$	285


Canadian Natural Resources Limited			17			Three and six months ended June 30, 2024

18. SEGMENTED INFORMATION


	North America				North Sea				Offshore Africa				Total Exploration and Production
	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	Jun 30		Jun 30		Jun 30		Jun 30		Jun 30		Jun 30		Jun 30		Jun 30
(millions of Canadian dollars, unaudited)	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023
Segmented product sales
Crude oil and NGLs	5,269	4,040	9,553	7,789	133	194	272	194	82	171	164	263	5,484	4,405	9,989	8,246
Natural gas	292	465	777	1,272	2	1	3	4	10	13	23	25	304	479	803	1,301
Other income and revenue (1)	(5)	(7)	(7)	4	—	—	4	—	1	5	1	7	(4)	(2)	(2)	11
Total segmented product sales	5,556	4,498	10,323	9,065	135	195	279	198	93	189	188	295	5,784	4,882	10,790	9,558
Less: royalties	(841)	(504)	(1,424)	(995)	(1)	(1)	(1)	(1)	(4)	(18)	(9)	(28)	(846)	(523)	(1,434)	(1,024)
Segmented revenue	4,715	3,994	8,899	8,070	134	194	278	197	89	171	179	267	4,938	4,359	9,356	8,534
Segmented expenses
Production	804	918	1,713	1,920	112	149	218	152	19	37	40	64	935	1,104	1,971	2,136
Transportation, blending and feedstock	1,707	1,408	3,266	2,954	5	5	6	5	—	—	—	—	1,712	1,413	3,272	2,959
Depletion, depreciation and amortization	956	871	1,897	1,761	24	15	41	16	108	65	155	100	1,088	951	2,093	1,877
Asset retirement obligation accretion	57	58	115	117	16	12	32	23	2	2	4	4	75	72	151	144
Risk management loss (gain) (commodity derivatives)	3	(3)	6	17	—	—	—	—	—	—	—	—	3	(3)	6	17




Total segmented expenses	3,527	3,252	6,997	6,769	157	181	297	196	129	104	199	168	3,813	3,537	7,493	7,133
Segmented earnings (loss)	1,188	742	1,902	1,301	(23)	13	(19)	1	(40)	67	(20)	99	1,125	822	1,863	1,401
Non-segmented expenses
Administration
Share-based compensation
Interest and other financing expense
Risk management loss (gain) (other)
Foreign exchange loss (gain)
Loss (gain) from investments

Total non-segmented expenses
Earnings before taxes
Current income tax
Deferred income tax
Net earnings


Canadian Natural Resources Limited			18			Three and six months ended June 30, 2024


	Oil Sands Mining and Upgrading				Midstream and Refining				Inter–segment elimination and other				Total
	Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended		Three Months Ended		Six Months Ended
	Jun 30		Jun 30		Jun 30		Jun 30		Jun 30		Jun 30		Jun 30		Jun 30
(millions of Canadian dollars, unaudited)	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023	2024	2023
Segmented product sales
Crude oil and NGLs (2)	4,525	3,546	8,693	8,028	21	15	41	36	54	149	37	217	10,084	8,115	18,760	16,527
Natural gas	—	—	—	—	—	—	—	—	27	43	57	72	331	522	860	1,373
Other income and revenue (1)	(4)	8	(3)	27	215	203	429	453	—	—	—	3	207	209	424	494
Total segmented product sales	4,521	3,554	8,690	8,055	236	218	470	489	81	192	94	292	10,622	8,846	20,044	18,394
Less: royalties	(725)	(433)	(1,315)	(850)	—	—	—	—	—	—	—	—	(1,571)	(956)	(2,749)	(1,874)
Segmented revenue	3,796	3,121	7,375	7,205	236	218	470	489	81	192	94	292	9,051	7,890	17,295	16,520
Segmented expenses
Production	941	997	1,967	2,039	88	91	167	169	15	19	31	31	1,979	2,211	4,136	4,375
Transportation, blending and feedstock (2)	682	582	1,250	1,132	194	162	352	315	67	173	65	258	2,655	2,330	4,939	4,664
Depletion, depreciation and amortization	557	442	1,081	930	4	4	8	8	—	—	—	—	1,649	1,397	3,182	2,815
Asset retirement obligation accretion	22	19	43	39	—	—	—	—	—	—	—	—	97	91	194	183
Risk management loss (gain) (commodity derivatives)	—	—	—	—	—	—	—	—	—	—	—	—	3	(3)	6	17



Total segmented expenses	2,202	2,040	4,341	4,140	286	257	527	492	82	192	96	289	6,383	6,026	12,457	12,054
Segmented earnings (loss)	1,594	1,081	3,034	3,065	(50)	(39)	(57)	(3)	(1)	—	(2)	3	2,668	1,864	4,838	4,466
Non-segmented expenses
Administration													124	119	250	225
Share-based compensation													(13)	70	281	136
Interest and other financing expense													158	178	296	332
Risk management loss (gain) (other)													15	(28)	50	(27)
Foreign exchange loss (gain)													103	(202)	353	(216)
Loss (gain) from investments													25	(45)	(56)	(44)
Total non-segmented expenses													412	92	1,174	406
Earnings before taxes													2,256	1,772	3,664	4,060
Current income tax													520	313	921	772
Deferred income tax													21	(4)	41	26
Net earnings													1,715	1,463	2,702	3,262

(1)Includes the sale of diesel and other refined products in the Midstream and Refining segment, and other income.

(2)Includes blending and feedstock costs associated with the processing of third party bitumen and other purchased feedstock in the Oil Sands Mining and Upgrading segment.


Canadian Natural Resources Limited			19			Three and six months ended June 30, 2024

Capital Expenditures(1)


	Six Months Ended
	Jun 30, 2024						Jun 30, 2023
	Net expenditures		Non-cash and fair value changes (2)		Capitalized costs		Net expenditures		Non-cash and fair value changes (2)		Capitalized costs
Exploration and evaluation assets
Exploration and Production
North America	$	68	$	(42)	$	26	$	34	$	(26)	$	8

Offshore Africa	(3)		(62)		(65)		1		—		1

	65		(104)		(39)		35		(26)		9
Property, plant and equipment
Exploration and Production
North America	1,437		(259)		1,178		1,628		(268)		1,360
North Sea	7		—		7		8		—		8
Offshore Africa	81		—		81		79		—		79
	1,525		(259)		1,266		1,715		(268)		1,447
Oil Sands Mining and Upgrading	1,117		(341)		776		1,055		(185)		870
Midstream and Refining	7		—		7		5		—		5
Head Office	20		—		20		16		—		16
	2,669		(600)		2,069		2,791		(453)		2,338
	$	2,734	$	(704)	$	2,030	$	2,826	$	(479)	$	2,347

(1)This table provides a reconciliation of capitalized costs, reported in note 4 and note 5, to net expenditures reported in the investing activities section of the statements of cash flows. The reconciliation excludes the impact of foreign exchange adjustments.

(2)Derecognitions, asset retirement obligations, transfer of exploration and evaluation assets, and other fair value adjustments.

Segmented Assets


	Jun 30 2024		Dec 31 2023
Exploration and Production
North America	$	30,437	$	30,058
North Sea	476		602
Offshore Africa	1,277		1,380
Other	51		32
Oil Sands Mining and Upgrading	42,561		42,865
Midstream and Refining	929		856
Head Office	213		162
	$	75,944	$	75,955


Canadian Natural Resources Limited			20			Three and six months ended June 30, 2024

SUPPLEMENTARY INFORMATION

INTEREST COVERAGE RATIOS

The following financial ratios are provided in connection with the Company's continuous offering of medium-term notes pursuant to the short form prospectus dated July 2023. These ratios are based on the Company's interim consolidated financial statements that are prepared in accordance with accounting principles generally accepted in Canada.


Interest coverage ratios for the twelve month period ended June 30, 2024:
Interest coverage (times)
Net earnings (1)			17.3x
Adjusted funds flow (2)			30.8x

(1)Net earnings plus income taxes and interest expense; divided by interest expense.

(2)Adjusted funds flow (as defined in the Company's Management's Discussion and Analysis), plus current income taxes and interest expense; divided by interest expense.


Canadian Natural Resources Limited			21			Three and six months ended June 30, 2024

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