Posted by OilVoice Press - OilVoice
CALGARY, Alberta, March 01, 2018 (GLOBE NEWSWIRE) -- Commenting on the Company's results, Steve Laut, Executive Vice Chairman of Canadian Natural stated, "In 2017, Canadian Natural continued to execute on its defined strategy and completed its transition to a long life low decline asset base with the completion and ramp-up of the Horizon Phase 3 expansion. The Company's focus on balanced capital allocation was evident in 2017 as economic resource development, increased balance sheet strength, execution on transformational acquisitions and free cash flow generation combined with our ability to execute with excellence, drove a strong year for the Company."
Canadian Natural's President, Tim McKay, added, "Strong production of Synthetic Crude Oil ("SCO") is targeted from our Oil Sands Mining and Upgrading operations with the midpoint of guidance at 450,000 bbl/d of SCO in the first quarter of 2018. With the completion of Phase 3 at Horizon, production has been strong averaging over 247,000 bbl/d of SCO since December 1, 2017 and operations at our Athabasca Oil Sands Project ("AOSP") continue to perform as expected with integration continuing during the Company's nine months of mine operations. The Company's Oil Sands Mining and Upgrading segment, conventional light oil in Canada and our international assets now make up over 50% of our corporate liquids production mix, a significant increase from approximately 32% in 2016. These products provide significant value to the Company as they are priced in close relation to the high value West Texas Intermediate ("WTI") crude oil commodity price.
Our focus on effective and efficient operations resulted in strong operating costs in 2017. Operating costs were within or on the lower end of corporate guidance ranges. Specifically, Horizon operating costs averaged $21.46/bbl of SCO in 2017, after adjusting for planned downtime, excellent results, with the Company looking to capture additional saving opportunities in 2018.
In 2017, Canadian Natural continued its strong track record of delivering excellent finding and development and acquisition costs and reserve replacement ratios, reflecting the strength of our assets and our ability to execute effectively and efficiently. Our reserve additions in the year were strong with gross proved crude oil, SCO, bitumen and NGL reserves increasing 59% to 7.74 billion barrels and proved natural gas reserves increasing 2% to 6.77 trillion cubic feet. Total proved plus probable BOE reserve life index of the Company is now 33.0 years, with low finding, development and acquisition costs of $12.29/BOE for proved reserves, including the change in future development capital. Additionally, our execution delivered strong reserve replacement ratios of 887% on proved developed producing reserves and 927% on total proved reserves, driven by our low sustaining capital requirement, resulting in significant free cash flow that provides sustainability through any commodity price cycle."
Canadian Natural's Chief Financial Officer, Corey Bieber, continued, "The financial strength of the Company was displayed in 2017 as we were able to opportunistically acquire accretive assets and bring the Horizon project to completion, making the Company much more robust and sustainable. As a result, annual funds flow and net earnings were significant at approximately $7.3 billion and $2.4 billion respectively, all achieved with an annual average WTI crude oil price under US$51.00/bbl. The resulting free cash flow allowed the Company to increase liquidity to $4.25 billion and reduce debt to annual adjusted EBITDA to 2.7x at year end.
In Q4/17 funds flow reached approximately $2.3 billion, resulting in a Q4/17 ending debt reduction of approximately $460 million, when compared to Q3/17 levels, supporting our near term focus to strengthen our balance sheet. Additionally, as of the April 1, 2018 dividend payment, the Company's Board of Directors has increased our quarterly dividend by 22% to $0.335 per share, reflecting the strength and robustness of our assets and our ability to generate free cash flow. The increase marks the 18th consecutive year of dividend increases, and confirms our commitment to sustainable and increasing returns to shareholders.”
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