Canadian Natural Resources - $CNQ.CN

What’s Canadian Natural Resources Business Model?

Canadian Natural Resources Ltd. acquires, explores for, develops, and produces natural gas, crude oil, and related products. The Company operates in the Canadian provinces of Alberta, northeastern British Columbia and Saskatchewan. Canadian Natural also operates in areas which have access for exploration activities and where pipeline systems already exist.

What Canadian Natural Resources is doing in more details?

Canadian Natural is a Canadian based senior independent energy company engaged in the acquisition, exploration, development, production, marketing and sale of crude oil, natural gas and NGLs.

The company’s principal core regions of operations are western Canada, the UK sector of the North Sea and Offshore Africa. In addition, the company has major interests in oil sands production in Canada.

Canadian Natural Resources has reported proved reserves of more than 11.9 billion barrels of oil, bitumen, and natural gas liquids, including about 7.0 billion barrels of synthetic crude oil, and approximately 9.4 trillion cu. ft. of natural gas, and produced an average of nearly 1 million barrels of oil equivalent per day. The company was founded in 1989.

Where Canadian Natural Resources is Operating?

Canadian Natural Resources generates more than half of its revenue through three geographic segment activities. These include the exploration, development, production and marketing of crude oil, natural gas liquids and natural gas.

The company’s Oil Sands Mining and Upgrading activities, account for about 45% of revenue, are reported in a separate segment from exploration and production activities. Midstream and Refining activities include the company’s pipeline operations, an electricity co-generation system and NWRP.

Where is the geographical reach of Canadian Natural Resources?

Canadian Natural Resources’ exploration and production activities are conducted in three geographic segments: North America (accounts for about 50% of total revenue); North Sea (around 5%); and Offshore Africa (less than 5%).

The company is headquartered in Calgary, Alberta with about 15 domestic operating locations. It also has nearly 5 international offices in Central Africa, the UK, and West Africa.

What is Canadian Natural Resources’ Sales and Marketing Strategy?

Canadian Natural Resources customers are mainly in the crude oil and natural gas industry.

What is Canadian Natural Resources Financial Performance?

Note: Growth rates may differ after conversion to US Dollars.

The company’s revenue for 2020 was C$16.9 billion, a 26% decrease from the previous year’s revenue of C$22.9 billion.

Product sales decreased 28% to $17.5 billion for 2020 from $24.4 billion for 2019. The decrease in product sales was primarily a result of lower WTI benchmark pricing due to decreased demand for refined products as a result of COVID-19.

For 2020, the company reported a net loss of $435 million compared with net earnings of $5.4 billion for 2019 (2018 ? net earnings of $2.6 billion).

The net loss for 2020 included net after-tax income of $321 million related to the effects of share-based compensation, risk management activities, fluctuations in foreign exchange rates, the foreign exchange gain on the settlement of the cross currency swaps, the gain on acquisition, disposition and revaluation, the loss from investments, and a provision relating to the Keystone XL pipeline project.

The company’s cash at the end of 2020 was C$184 million. Operating activities generated C$4.7 billion, while financing activities used C$1.9 billion, mainly for dividends on common shares. Investing activities used another C$2.8 billion, primarily for net expenditures on property, plant and equipment.

What is Canadian Natural Resources Future Strategy?

Canadian Natural Resources’ objectives are to increase crude oil and natural gas production, reserves, cash flow and net asset value on a per common share basis through the economic and sustainable development of its existing crude oil and natural gas properties and through the discovery and/or acquisition of new reserves.

The company strives to meet these objectives in a sustainable and responsible way, maintaining a commitment to environmental stewardship and safety excellence.

The company strives to meet these objectives by having a defined growth and value enhancement plan for each of its products and segments. The company takes a balanced approach to growth and investments and focuses on creating long-term shareholder value.

The company’s three-phase crude oil marketing strategy includes: blending various crude oil streams with diluents to create more attractive feedstock; supporting and participating in pipeline expansions and/or new additions; and supporting and participating in projects that will increase the downstream conversion capacity for heavy crude oil and bitumen (thermal oil).

Strategic accretive acquisitions are a key component of the company’s strategy. The company has used a combination of internally generated cash flows and debt and equity financing to selectively acquire properties generating future cash flows in its core areas.

The company’s financial discipline, commitment to a strong balance sheet, and capacity to internally generate cash flows provides the means to responsibly and sustainability grow in the long term.

What are Canadian Natural Resources’ Mergers and Acquisitions?

In late 2020, Canadian Natural Resources completed the acquisition of all the issued and outstanding common shares of Painted Pony Energy Ltd. Painted Pony has Northeast British Columbia and Calgary head office.

The company will also assume Painted Pony’s total debt of approximately $350 million. This acquisition further strengthens Canadian Natural’s natural gas assets and production base in key operating areas and complements the company’s diversified portfolio.

This transaction also allows to further insulate against natural gas costs in oils sands operations and has minimal impact on the low overall corporate decline rate.

What is Canadian Natural Resources’ Background?

The company was founded in 1989.

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