On Nov 3, Canadian Natural Resources Limited (TO:CNQ) reported third-quarter loss of 24 U.S. cents, which compared unfavorably with the year-earlier profit of 14 U.S. cents. Lower production and reduced oil and gas price realizations led to the underperformance.
This independent explorer and producer’s quarterly revenues of C$2,335 million were substantially lower than the year-ago figure of C$3,114 million.
Canadian Natural’s third-quarter cash flow from operations – a key metric to gauge its capability to fund new projects and drilling – was C$1,021 million. The reported figure came in significantly below the third-quarter 2015 level of C$1,533 million.
Production
Canadian Natural’s quarterly production of 735,212 barrels of oil equivalent per day (BOE/d) was down 13% from the prior-year quarter level.
Natural gas production remained essentially flat at 1,645 million cubic feet per day (MMcf/d). However, oil and natural gas liquids (NGLs) production came in at 460,986 barrels per day (Bbl/d), well below the prior-year quarter figure of 573,135 Bbl/d.
Realized Prices
As reported, average realized liquid price (before hedging) was C$39.66 per barrel during the third quarter, down 5% from the corresponding quarter last year. Moreover, average realized natural gas price (excluding hedging) for the three months ended Sep 30, 2016 was C$2.44 per thousand cubic feet (Mcf) as against the year-ago level of C$3.22 per Mcf.
Total Expenses
Total expenses decreased 9% from C$3,212 million in the year-earlier quarter to C$2,924 million.
Capital Expenditure & Balance Sheet
As of Sep 30, 2016, the company had C$19 million in cash and cash equivalents and long-term debt (including current portion) of C$17,292 million, representing a debt-to-capitalization ratio of approximately 40.3%.
Guidance
The company, which is Canada’s second-largest natural gas producer, anticipates capital expenditure to be approximately $4.4 billion in 2016. Canadian Natural expects fourth-quarter liquid production of 575,000–599,000 Bbl/d and natural gas production in the 1,690–1,720 MMcf/d range.
CDN NTRL RSRCS Price, Consensus and EPS Surprise
Recent News
Canadian Natural has declared a quarterly cash dividend of 25 Canadian cents on its common shares. The dividend is payable Jan 1, 2017 to shareholders on record at the close of business on Dec 9, 2016.
Stocks That Warrant a Look
Investors may also be interested in players from the broader energy sector like Braskem S.A. (NYSE:BAK) , Ultra Petroleum Corp. (OTC:UPLMQ) and McDermott International Inc. (NYSE:MDR) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Braskem posted an average positive earnings surprise of 105.5%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, McDermott posted an average positive earnings surprise of 250.00%.
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