• Annual Production: Record annual total production of approximately 1.36 million BOEs per day, including record liquids production of over 1 million barrels per day.
• Oil Sands Mining and Upgrading Production: Record annual production of 472,245 barrels per day and record quarterly production of 534,631 barrels per day.
• Operating Costs: Oil sands mining and upgraded operating costs averaged $22.88 per barrel in 2024 and $20.97 per barrel in Q4.
• Thermal In Situ Production: Record production averaging just over 271,000 barrels per day, a 3% increase over 2023.
• Thermal In Situ Operating Costs: Averaged $11.04 per barrel, down 16% compared to 2023.
• Primary Heavy Oil Production: Averaged approximately 79,100 barrels per day, a 2% increase over 2023.
• Primary Heavy Oil Operating Costs: Averaged $18.11 per barrel, down 9% from 2023.
• North American Light Crude Oil and NGL Production: Averaged approximately 114,400 barrels per day, a 5% increase compared to 2023.
• North American Natural Gas Production: Averaged 2.14 BCF in 2024, comparable to 2023.
• Adjusted Funds Flow: Annual adjusted funds flow of $14.9 billion, including Q4 '24 adjusted funds flow of $4.2 billion.
• Capital Program: Approximately $100 million under budget of $5.3 billion.
• Returns to Shareholders: Approximately $7.1 billion returned to shareholders in 2024.
• Dividend Increase: Quarterly dividend increased twice in 2024, with a further 4% increase subsequent to year-end.
• Debt Metrics: Debt-to-EBITDA at 1.1 times and debt-to-book capital at 32% at the end of 2024.
• Liquidity: Liquidity at the end of the quarter was approximately $4.7 billion.

• Warning! GuruFocus has detected 3 Warning Signs with ACFN.

Release Date: March 06, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Canadian Natural Resources Ltd (NYSE:CNQ) achieved record annual total production of approximately 1.36 million BOEs per day in 2024, including record liquids production of over 1 million barrels per day.
• The company returned over $11 per share to shareholders through dividends and share repurchases, with a 59% increase in annualized quarterly dividend.
• Canadian Natural Resources Ltd (NYSE:CNQ) completed strategic acquisitions, including Chevron's assets, adding significant reserves and production capacity.
• The company reported strong financial results with an annual adjusted funds flow of $14.9 billion and significant free cash flow, allowing for increased shareholder returns.
• Canadian Natural Resources Ltd (NYSE:CNQ) maintained industry-leading low operating costs, with oil sands mining and upgrading costs averaging $22.88 per barrel in 2024.

Negative Points

• The company faces challenges in obtaining approvals for large projects in Canada, which could impact future growth opportunities.
• There is uncertainty regarding the impact of tariffs on WCS pricing and how much of the cost will be absorbed by producers versus consumers.
• Canadian Natural Resources Ltd (NYSE:CNQ) has deferred certain dry natural gas activities due to lower natural gas prices, impacting potential production growth.
• The North Sea operations are expected to continue winding down, with no plans for further capital investment in the region.
• The company must navigate political and market uncertainties, including currency fluctuations and potential changes in fiscal regimes, which could affect financial performance.

Q & A Highlights

Q: What impact do the Shell swap and Chevron acquisitions have on shareholder returns and organic growth at AOSP? A: Scott Stauth, President: The acquisitions add 93,000 barrels per day of production, significantly contributing to free cash flow and shareholder payment programs. There are existing approvals for Jackpine mine expansion and license capacity availability for further growth opportunities at Albian mine.

Q: Are the accelerated thermal developments part of a larger strategy? A: Scott Stauth, President: The acceleration is due to continuous improvement practices. Each project benefits from learnings of previous ones, allowing for earlier completions, but it's part of our standard improvement process.

Q: What options are available if production exceeds Scotford upgrader capacity? A: Scott Stauth, President: The next step would likely involve paraffinic treat opportunities to move additional bitumen barrels to market, ensuring the upgrader remains full while expanding capacity.

Q: How do you view the Eco prices over the next 18 to 24 months with LNG projects ramping up? A: Scott Stauth, President: Prices are expected to rise by 2026 with LNG Canada coming online. The focus will remain on liquids-rich gas areas like Montney and Duvernay, with market conservatism on pricing.

Q: How does the company plan to utilize the 70,000 barrels per day of unused thermal processing capacity? A: Scott Stauth, President: The focus is on pad additions and solvent implementation, primarily in the Primrose/Wolf Lake area, to maximize steam plant capacity and enhance production.

Q: What are the implications of the Chevron acquisition on tax pools and cash taxes in 2025? A: Mark Stainthorpe, CFO: The acquisition generates tax pools, impacting taxes as seen in Q4, but specific guidance on tax pools is not provided.

Q: How do you view the potential for expanding the Jackpine mine by 100,000 barrels per day? A: Scott Stauth, President: The expansion is approved and can be integrated into the capital allocation model. The decision will depend on pricing, egress, and carbon capture considerations.

Q: How do you assess the breakeven for incremental investments in a flat oil price environment? A: Scott Stauth, President: Incremental projects have low breakeven costs due to existing infrastructure, offering the best capital efficiencies and returns, making them a priority in any investment environment.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.