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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Canadian Natural Resources Ltd | TSX:CNQ | Toronto | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.29 | -0.28% | 102.10 | 101.97 | 102.30 | 103.05 | 101.38 | 102.91 | 1,916,690 | 21:14:58 |
In the third quarter, we increased liquids production from our North America Exploration and Production ("E&P") assets by approximately 20% from Q2/20 levels to 494,952 bbl/d and achieved record daily thermal in situ production in the quarter of 287,978 bbl/d, while achieving low thermal operating costs of $7.85/bbl (US$5.89/bbl). These results were achieved as we successfully executed on our curtailment optimization strategy while we conducted planned maintenance and turnaround activities in our Oil Sands Mining and Upgrading segment.
Environmental, Social and Governance ("ESG") performance remains a priority and investments in improving environmental performance and reducing our environmental footprint continue in the current pricing environment. We recently released our 2019 Report to Stakeholders, which highlights our commitment to ESG excellence and reducing our environmental footprint.
Subsequent to quarter end, the acquisition of Painted Pony Energy Ltd. ("Painted Pony") closed on October 6, 2020. With a significant amount of pre-built infrastructure, these high quality assets in the Townsend areas of Northeast British Columbia complement our already high quality natural gas asset base in Western Canada. The Company’s natural gas production, targeted at over 1.6 Bcf/d in the fourth quarter, and associated natural gas liquids is forecast to generate approximately $1.2 billion in annualized operating cash flow at current strip pricing."
Canadian Natural's Chief Financial Officer, Mark Stainthorpe, added, "Our unique and diversified asset base allows us to generate significant free cash flow above our disciplined capital program and maintain our dividend payment level, unchanged through the commodity price cycle. In the third quarter, we generated approximately $1.74 billion in adjusted funds flow and approximately $467 million in free cash flow, after capital expenditures and dividend payments, reflecting the flexibility and strength of our long life low decline asset base.
The Company maintains a flexible and disciplined capital allocation strategy, with a focus on maintaining a strong and resilient financial position throughout the commodity price cycle. In the third quarter we allocated our free cash flow to the balance sheet, contributing to a significant reduction in net debt of approximately $1.1 billion. Including committed and undrawn credit facilities, cash balances and short-term investments, the Company had significant liquidity available at September 30, 2020 of approximately $4.2 billion.
Our effective and efficient operations along with our low cost structure drives our industry leading break-even of WTI US$30-$31 per barrel to cover sustaining capital and current dividend payment levels. Our low break-even maximizes netbacks, ultimately increasing free cash flow and creating value for our shareholders."
QUARTERLY HIGHLIGHTS
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
($ millions, except per common share amounts) | Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | |||||||||||||||||
Net earnings (loss) | $ | 408 | $ | (310 | ) | $ | 1,027 | $ | (1,184 | ) | $ | 4,819 | ||||||||||
Per common share | – basic | $ | 0.35 | $ | (0.26 | ) | $ | 0.87 | $ | (1.00 | ) | $ | 4.04 | |||||||||
– diluted | $ | 0.35 | $ | (0.26 | ) | $ | 0.87 | $ | (1.00 | ) | $ | 4.03 | ||||||||||
Adjusted net earnings (loss) from operations (1) | $ | 135 | $ | (772 | ) | $ | 1,229 | $ | (932 | ) | $ | 3,109 | ||||||||||
Per common share | – basic | $ | 0.11 | $ | (0.65 | ) | $ | 1.04 | $ | (0.79 | ) | $ | 2.61 | |||||||||
– diluted | $ | 0.11 | $ | (0.65 | ) | $ | 1.04 | $ | (0.79 | ) | $ | 2.60 | ||||||||||
Cash flows from (used in) operating activities | $ | 2,070 | $ | (351 | ) | $ | 2,518 | $ | 3,444 | $ | 6,375 | |||||||||||
Adjusted funds flow (2) | $ | 1,740 | $ | 415 | $ | 2,881 | $ | 3,492 | $ | 7,773 | ||||||||||||
Per common share | – basic | $ | 1.47 | $ | 0.35 | $ | 2.43 | $ | 2.96 | $ | 6.51 | |||||||||||
– diluted | $ | 1.47 | $ | 0.35 | $ | 2.43 | $ | 2.96 | $ | 6.50 | ||||||||||||
Cash flows used in investing activities | $ | 643 | $ | 693 | $ | 908 | $ | 2,195 | $ | 6,401 | ||||||||||||
Net capital expenditures (3) | $ | 771 | $ | 421 | $ | 963 | $ | 2,030 | $ | 6,065 | ||||||||||||
Daily production, before royalties | ||||||||||||||||||||||
Natural gas (MMcf/d) | 1,362 | 1,462 | 1,469 | 1,421 | 1,504 | |||||||||||||||||
Crude oil and NGLs (bbl/d) | 884,342 | 921,895 | 931,546 | 914,859 | 829,031 | |||||||||||||||||
Equivalent production (BOE/d) (4) | 1,111,286 | 1,165,487 | 1,176,361 | 1,151,693 | 1,079,641 |
(1) Adjusted net earnings (loss) from operations is a non-GAAP measure that the Company utilizes to evaluate its performance, as it demonstrates the Company’s ability to generate after-tax operating earnings from its core business areas. The derivation of this measure is discussed in the "Advisory" section of this press release.(2) Adjusted funds flow is a non-GAAP measure that the Company considers key to evaluate its performance as it demonstrates the Company’s ability to generate the cash flow necessary to fund future growth through capital investment and to repay debt. The derivation of this measure is discussed in the "Advisory" section of this press release.(3) Net capital expenditures is a non-GAAP measure that the Company considers a key measure as it provides an understanding of the Company’s capital spending activities in comparison to the Company's annual capital budget. For additional information and details, refer to the net capital expenditures table in the "Advisory" section of this press release.(4) 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, 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.
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 Synthetic Crude Oil ("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 long life low decline production, representing approximately 79% of the Company's total liquids production in Q3/20, 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 long life low decline production comes from Canadian Natural's top tier thermal in situ oil sands operations and the Company's Pelican Lake heavy crude oil assets. The combination of long life low decline, low reserves replacement cost, 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 shareholders. Supporting these projects is the Company’s undeveloped land base which enables large, repeatable drilling programs that can be optimized over time. Additionally, by owning and operating most of the related infrastructure, Canadian Natural is able to control major components of the Company's operating costs and minimize production commitments. Low capital exposure projects can be quickly stopped or started 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 | Nine Months Ended Sep 30 | |||||||
2020 | 2019 | |||||||
(number of wells) | Gross | Net | Gross | Net | ||||
Crude oil | 43 | 37 | 80 | 74 | ||||
Natural gas | 25 | 21 | 21 | 15 | ||||
Dry | — | — | 3 | 3 | ||||
Subtotal | 68 | 58 | 104 | 92 | ||||
Stratigraphic test / service wells | 426 | 372 | 411 | 358 | ||||
Total | 494 | 430 | 515 | 450 | ||||
Success rate (excluding stratigraphic test / service wells) | 100 | % | 97 | % |
North America Exploration and Production
Crude oil and NGLs – excluding Thermal In Situ Oil Sands | |||||||||
Three Months Ended | Nine Months Ended | ||||||||
Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | |||||
Crude oil and NGLs production (bbl/d) | 206,974 | 200,699 | 244,267 | 212,064 | 234,944 | ||||
Net wells targeting crude oil | — | 2 | 33 | 30 | 70 | ||||
Net successful wells drilled | — | 2 | 33 | 30 | 68 | ||||
Success rate | — | 100 | % | 100 | % | 100 | % | 97 | % |
Thermal In Situ Oil Sands | ||||||
Three Months Ended | Nine Months Ended | |||||
Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | ||
Bitumen production (bbl/d) | 287,978 | 212,807 | 206,395 | 243,193 | 137,124 | |
Net wells targeting bitumen | — | — | — | 6 | — | |
Net successful wells drilled | — | — | — | 6 | — | |
Success rate | — | — | — | 100 | % | — |
North America Natural Gas | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | ||||||
Natural gas production (MMcf/d) | 1,340 | 1,431 | 1,425 | 1,393 | 1,454 | |||||
Net wells targeting natural gas | 9 | 1 | 5 | 21 | 16 | |||||
Net successful wells drilled | 9 | 1 | 5 | 21 | 15 | |||||
Success rate | 100 | % | 100 | % | 100 | % | 100 | % | 94 | % |
International Exploration and Production
Three Months Ended | Nine Months Ended | |||||||
Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | ||||
Crude oil production (bbl/d) | ||||||||
North Sea | 21,220 | 26,627 | 27,454 | 25,186 | 26,927 | |||
Offshore Africa | 17,537 | 17,444 | 21,227 | 16,977 | 22,341 | |||
Natural gas production (MMcf/d) | ||||||||
North Sea | 5 | 15 | 20 | 14 | 24 | |||
Offshore Africa | 17 | 16 | 24 | 14 | 26 | |||
Net wells targeting crude oil | — | — | 3.0 | 1.0 | 5.5 | |||
Net successful wells drilled | — | — | 3.0 | 1.0 | 5.5 | |||
Success rate | — | — | 100 | % | 100 | % | 100 | % |
North America Oil Sands Mining and Upgrading
Three Months Ended | Nine Months Ended | |||||||||
Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | ||||||
Synthetic crude oil production (bbl/d) (1) (2) | 350,633 | 464,318 | 432,203 | 417,439 | 407,695 |
(1) SCO production before royalties and excludes volumes consumed internally as diesel.(2) Consists of heavy and light synthetic crude oil products.
MARKETING
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
Sep 30 2020 | Jun 30 2020 | Sep 30 2019 | Sep 30 2020 | Sep 30 2019 | |||||||||||||||||
Crude oil and NGLs pricing | |||||||||||||||||||||
WTI benchmark price (US$/bbl) (1) | $ | 40.94 | $ | 27.85 | $ | 56.45 | $ | 38.30 | $ | 57.06 | |||||||||||
WCS heavy differential as a percentage of WTI (%) (2) | 22 | % | 41 | % | 22 | % | 36 | % | 21 | % | |||||||||||
SCO price (US$/bbl) | $ | 38.61 | $ | 23.28 | $ | 56.87 | $ | 35.11 | $ | 56.36 | |||||||||||
Condensate benchmark pricing (US$/bbl) | $ | 37.55 | $ | 22.19 | $ | 52.00 | $ | 35.10 | $ | 52.79 | |||||||||||
Average realized pricing before risk management (C$/bbl) (3) | $ | 40.14 | $ | 18.97 | $ | 55.19 | $ | 28.91 | $ | 57.49 | |||||||||||
Natural gas pricing | |||||||||||||||||||||
AECO benchmark price (C$/GJ) | $ | 2.03 | $ | 1.81 | $ | 0.99 | $ | 1.96 | $ | 1.31 | |||||||||||
Average realized pricing before risk management (C$/Mcf) | $ | 2.31 | $ | 2.03 | $ | 1.64 | $ | 2.19 | $ | 2.24 |
(1) West Texas Intermediate ("WTI").(2) Western Canadian Select ("WCS").(3) Average crude oil and NGL pricing excludes SCO. Pricing is net of blending costs and excluding risk management activities.
FINANCIAL REVIEW
The Company continues to implement proven strategies including its disciplined approach to capital allocation. As a result, the financial position of Canadian Natural remains strong. Canadian Natural’s adjusted funds flow generation, credit facilities, US commercial paper program, access to capital markets, diverse asset base and related flexible capital expenditure program, all support a flexible financial position and provide the appropriate financial resources for the near-, mid- and long-term.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE ("ESG") HIGHLIGHTS
Canada and Canadian Natural are well positioned to deliver responsibly produced energy the world needs through leading ESG performance.
In September 2020, Canadian Natural published its 2019 Stewardship Report to Stakeholders, which is available on the Company's website at https://www.cnrl.com/report-to-stakeholders. The report displays how Canadian Natural continues to focus on safe, reliable, effective and efficient operations while minimizing its environmental footprint. Canadian Natural outlined its pathway to lower carbon emissions and its journey to achieve its aspirational goal of net zero GHG emissions in the oil sands. Highlights from the Company's 2019 report are as follows:
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", "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 expected future commodity pricing, forecast or anticipated production volumes, royalties, production expenses, capital expenditures, income tax expenses and other guidance provided throughout this press release and the Company's Management’s Discussion and Analysis ("MD&A") of the financial condition and results of operations of the Company, 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"), Primrose thermal oil projects, the Pelican Lake water and polymer flood project, the Kirby Thermal Oil Sands Project, the Jackfish Thermal Oil Sands Project, 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, and the development and deployment of technology and technological innovations 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 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 effects of the novel coronavirus ("COVID-19") pandemic and the actions of the Organization of the Petroleum Exporting Countries ("OPEC") and non-OPEC countries) 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 and natural gas and NGL prices including due to actions of OPEC and non-OPEC countries taken in response to COVID-19 or otherwise; fluctuations in currency and interest rates; assumptions on which the Company’s current guidance is 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; industry capacity; ability of the Company to implement its business strategy, including exploration and development activities; impact of competition; the Company’s defense of lawsuits; availability and cost of seismic, drilling and other equipment; ability of the Company and its subsidiaries to complete capital programs; the Company’s and its subsidiaries’ 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 mining, extracting or upgrading the Company’s bitumen products; availability and cost of financing; the Company’s and its subsidiaries’ success of exploration and development activities and its ability to replace and expand crude oil and natural gas reserves; 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 (including production curtailments mandated by the Government of Alberta); government regulations and the expenditures required to comply with them (especially safety and environmental laws and regulations and the impact of climate change initiatives on capital expenditures and production expenses); asset retirement obligations; the adequacy of the Company’s provision for taxes; the continued availability of the Canada Emergency Wage Subsidy ("CEWS") or other subsidies; and other circumstances affecting revenues and expenses.
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 press release 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 press release 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 non-GAAP Financial Measures
This press release includes references to financial measures commonly used in the crude oil and natural gas industry, such as: adjusted net earnings (loss) from operations, adjusted funds flow and net capital expenditures. These financial measures are not defined by International Financial Reporting Standards ("IFRS") and therefore are referred to as non-GAAP financial measures. The non-GAAP financial measures used by the Company may not be comparable to similar measures presented by other companies. The Company uses these non-GAAP financial measures to evaluate its performance. The non-GAAP financial measures should not be considered an alternative to or more meaningful than net earnings (loss), cash flows from (used in) operating activities, and cash flows used in investing activities as determined in accordance with IFRS, as an indication of the Company's performance. The non-GAAP financial measure adjusted net earnings (loss) from operations is reconciled to net earnings (loss), as determined in accordance with IFRS, in the "Financial Highlights" section of the Company's MD&A. Additionally, the non-GAAP financial measure adjusted funds flow is reconciled to cash flows from (used in) operating activities, as determined in accordance with IFRS, in the "Financial Highlights" section of the Company's MD&A. The non-GAAP financial measure net capital expenditures is reconciled to cash flows used in investing activities, as determined in accordance with IFRS, in the "Net Capital Expenditures" section of the Company's MD&A. The Company also presents certain non-GAAP financial ratios and their derivation in the "Liquidity and Capital Resources" section of the Company's MD&A.
Adjusted funds flow (previously referred to as funds flow from operations) is a non-GAAP 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, including the unamortized cost of the share bonus program and prepaid cost of service tolls. The Company considers adjusted funds flow a key measure as it demonstrates the Company’s ability to generate the cash flow necessary to fund future growth through capital investment and to repay debt. The reconciliation “Adjusted Funds Flow, as Reconciled to Cash Flows from Operating Activities” is presented in the Company’s MD&A.
Net capital expenditures is a non-GAAP 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, investment in other long-term assets, share consideration in business acquisitions and abandonment expenditures. The Company considers net capital expenditures a key measure as it provides an understanding of the Company’s capital spending activities in comparison to the Company's annual capital budget. The reconciliation “Net Capital Expenditures, as Reconciled to Cash Flows used in Investing Activities” is presented in the Net Capital Expenditures section of the Company’s MD&A.
Free cash flow is a non-GAAP 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 from operating activities, abandonment, certain movements in other long-term assets, less net capital expenditures and dividends on common shares. 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 debt.
Operating cash flow is a forward looking supplementary measure that represents the Company’s currently forecasted cash flow from operating activities for the stated forecast period for a particular product or group of products or segment, excluding the impact of administration expense, interest, foreign exchange, and taxes. The Company considers operating cash flow by product or segment a key measure in evaluating the contribution of a product to the Company’s cash flow from operating activities.
Adjusted EBITDA is a non-GAAP measure that represents net earnings (loss) as presented in the Company's consolidated Statements of Earnings (Loss), adjusted for interest, taxes, depletion, depreciation and amortization, stock based compensation expense (recovery), unrealized risk management gains (losses), unrealized foreign exchange gains (losses), and accretion of the Company’s asset retirement obligation. The Company considers adjusted EBITDA a key measure in evaluating its operating profitability by excluding non-cash items.
Debt to adjusted EBITDA is a non-GAAP measure that is derived as the current and long-term portions of long-term debt, divided by the 12 month trailing Adjusted EBITDA, as defined above. The Company considers this ratio to be a key measure in evaluating the Company's ability to pay off its debt.
Debt to book capitalization is a non-GAAP measure that is derived as net current and long-term debt, divided by the book value of common shareholders' equity plus net current and long-term debt. The Company considers this ratio to be a key measure in evaluating the Company's ability to pay off its debt.
Available liquidity is a non-GAAP measure that is derived as cash and cash equivalents, total bank and term credit facilities, less amounts drawn on the bank and credit facilities including under the commercial paper program. The Company considers available liquidity a key measure in evaluating the sustainability of the Company’s operations and ability to fund future growth. See note 9 - Long-term Debt in the Company’s consolidated financial statements.
Special Note Regarding Currency, Financial Information and Production
This press release should be read in conjunction with the unaudited interim consolidated financial statements for the three and nine months ended September 30, 2020 and the Company's MD&A and audited consolidated financial statements for the year ended December 31, 2019. All dollar amounts are referenced in millions of Canadian dollars, except where noted otherwise. The Company’s unaudited interim consolidated financial statements for the three and nine months ended September 30, 2020 and the Company's MD&A have been prepared in accordance with IFRS as issued by the International Accounting Standards Board ("IASB").
Production volumes and per unit statistics are presented throughout the Company's 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 the Company's 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.
Additional information relating to the Company, including its Annual Information Form for the year ended December 31, 2019, is available on SEDAR at www.sedar.com, 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.
CONFERENCE CALL
A conference call will be held at 9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time on Thursday, November 5, 2020.
The North American conference call number is 1-866-521-4909 and the outside North American conference call number is 001-647-427-2311. Please call in 10 minutes prior to the call starting time.
An archive of the broadcast will be available until 6:00 p.m. Mountain Time, Thursday, November 19, 2020. To access the rebroadcast in North America, dial 1-800-585-8367. Those outside of North America, dial 001-416-621-4642. The conference archive ID number is 2768477
The conference call will also be webcast and can be accessed on the home page our website at www.cnrl.com.
Canadian Natural is a senior 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 |
2100, 855 - 2nd Street S.W. Calgary, Alberta, T2P4J8Phone: 403-514-7777 Email: ir@cnrl.comwww.cnrl.com |
TIM S. MCKAYPresidentMARK A. STAINTHORPEChief Financial Officer and Senior Vice-President, FinanceJASON M. POPKOManager, Investor RelationsTrading Symbol - CNQToronto Stock ExchangeNew York Stock Exchange |
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