CNRL cuts 2018 spend­ing to $4.3B

Out­put to rise by 17 per cent

Fort McMurray Today - - ALBERTA NEWS -

Cana­dian Nat­u­ral Re­sources Ltd. is throt­tling back cap­i­tal spend­ing in 2018, but plans to in­crease pro­duc­tion to more than one mil­lion bar­rels of oil equiv­a­lent per day.

West­ern Canada’s largest heavy oil and nat­u­ral gas pro­ducer says it is bud­get­ing to spend $4.3 bil­lion, down about $500 mil­lion from its es­ti­mated cap­i­tal bud­get for 2017.

Pro­duc­tion, how­ever, will rise by 17 per cent to about 1.13 mil­lion boe/d from about 970,000 boe/d this year as it ramps up its Hori­zon oil­sands mine ex­pan­sion and en­joys a full year of out­put from oil­sands op­er­a­tions it bought from Royal Dutch Shell last spring.

On a we­b­cast from its in­vestor day in Toronto, CEO Steve Laut said the com­pany can cut cap­i­tal spend­ing to as low as $3 bil­lion per year to main­tain pro­duc­tion if oil prices slump.

It pre­dicts it will have funds flow from op­er­a­tions of about $8.1 bil­lion — gen­er­at­ing free cash flow af­ter div­i­dends and cap­i­tal spend­ing of about $2.5 bil­lion — if bench­mark New York oil prices av­er­age US$52 per bar­rel and Al­berta gas prices are at $2.11 per gi­ga­joule.

Laut said the com­pany will use its free cash flow to re­duce debt, but will also con­sider ac­qui­si­tions and returns to share­hold­ers via div­i­dends and share buy­backs.

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