Alberta Oil - - JUNIORS -

Mur­ray Ed­wards was not born with a sil­ver spoon in his mouth. As the son of an ac­coun­tant and a school teacher in Regina, he started his jour­ney to­wards be­com­ing a bil­lion­aire armed with a com­merce de­gree from the Univer­sity of Saskatchewan and a law de­gree from the Univer­sity of Toronto.

The early days of Cana­dian Nat­u­ral Re­sources (CNRL) in 1989 in­volved a com­pany op­er­at­ing with nine em­ploy­ees, just over a 1,000 b/d of pro­duc­tion and a mar­ket cap­i­tal­iza­tion of just $1 mil­lion.

Ed­wards grew CNRL steadily through the 1990s. A huge turn­ing point in the com­pany’s his­tory was the $1.6-bil­lion ac­qui­si­tion of BP Amoco’s Cana­dian busi­ness arm. That deal gave birth to CNRL’s do­mes­tic oil busi­ness, which higher oil prices soon lifted. To­day, CNRL has an in­cred­i­ble 850,000 b/d of pro­duc­tion, nine bil­lion bar­rels of proved and probable re­serves and em­ploys more than 6,600 peo­ple.

The com­pany is also very well po­si­tioned to keep grow­ing through these low com­mod­ity prices. From 2017 through 2019, CNRL is es­ti­mat­ing that, at an av­er­age oil price of $60 for WTI, the com­pany will gen­er­ate nearly $9 bil­lion in free cash flow.

That’s ex­cess cash flow af­ter all cap­i­tal spending. That cash can be directed to­wards div­i­dends, share re­pur­chases, debt re­duc­tion or what­ever op­por­tu­ni­ties should hap­pen to pop up. More im­pres­sive is that CNRL can do all that while grow­ing pro­duc­tion at a rate of eight per­cent per year. That is unique in this world, where shale fo­cused pro­duc­ers strug­gle to main­tain pro­duc­tion while liv­ing within their cash flows. And, if oil prices soon head higher, all the bet­ter.


Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.