Canadian Natural Resources' Q4 2024: Key Contradictions in Thermal Development, CapEx, and Gas Pricing

These are the key contradictions discussed in Canadian Natural Resources Limited's latest 2024Q4 earnings call, specifically including: Thermal Development Progress, Capital Expenditure (CapEx) Strategy, Thermal Processing Capacity and Egress Opportunities, and Pricing Expectations for Eastern Gas:



Strong Financial Performance:
- Canadian Natural Resources limited reported adjusted funds flow of $14.9 billion for 2024, including $4.2 billion in Q4.
- The company returned approximately $7.1 billion to shareholders in 2024, including dividends and share repurchases.
- The performance was driven by robust operational results, including record production and significant free cash flow generation.

Production and Operational Records:
- Canadian Natural achieved record annual production of approximately 1.36 million BOEs per day, with record liquids production exceeding 1 million barrels per day.
- Record oil sands mining and upgrading production reached 472,245 barrels per day, with quarterly production peaking at 534,631 barrels per day.
- The strong operational performance was attributed to continuous improvement initiatives, increased efficiencies, and capital-efficient projects.

Reserve and Asset Growth:
- The company's total proved reserves increased to 15.2 billion BOE, and total proved plus probable reserves to 20.1 billion BOE, a 9% increase compared to the previous year.
- Canadian Natural replaced 2024 production by 365% on a total proved basis and 422% on a total proved plus probable basis.
- Growth in reserves was driven by strategic acquisitions, like the acquisition of Chevron's Alberta assets, and successful exploration and development efforts.

Acquisitions and Strategic Investments:
- The acquisition of Chevron's 70% operator working interest in the Duvernay assets and a 100% working interest in Albion Mines are expected to contribute approximately 60,000 BOEs per day in 2025 and incrementally boost production.
- The transactions were part of Canadian Natural's strategy to grow organically, enhance long-term shareholder value, and leverage its diverse asset base for future growth.