💙 🔷 Not impressed by Big Tech in Q3? Explore these Blue Chip Bargains insteadExplore for free

UPDATE 3-Canadian Natural Resources targets more spending cuts

Published 2016-03-03, 02:35 p/m
© Reuters. UPDATE 3-Canadian Natural Resources targets more spending cuts
CL
-
CNQ
-

* Lowers 2016 capex forecast to C$3.5-C$3.9 billion
* Capex forecast to be C$2.5-C2.6 bln in 2017, 2018
* Q4 earnings pre share C$0.12 vs C$0.09 forecast
* President says no plans for job losses

(Adds president's comments on jobs, capex)
By Matt Scuffham
CALGARY, Alberta, March 3 (Reuters) - Canadian Natural
Resources Ltd CNQ.TO CNQ.N slashed its capital expenditure
plan for 2016 and targeted further cuts in 2017 and 2018 in
response to the slump in oil prices which has hit its profits.
Canada's second-biggest oil and gas producer reported an 89
percent fall in quarterly profit and lowered its estimated 2016
capital spending to between C$3.5 billion ($2.6 billion) and
C$3.9 billion, from C$4.5 billion to C$5 billion previously.
"In 2017, we're looking to spend around C$2.5 to C$2.6
billion dollars. Getting to 2018, we expect to spend about the
same. Those are the numbers that keep our production flat. We're
assuming we have a low oil price throughout that time,"
President Steve Laut told analysts on a conference call.
Capital required to expand the company's Horizon oil sands
project in Alberta will drop by C$1 billion next year, Laut
said.
North American oil and gas producers are slashing budgets,
costs and streamlining operations as profits fall in the wake of
a 70 percent drop in crude oil prices since mid-2014.
Unlike may peers, the Calgary, Alberta-based company has so
far resisted job cuts, instead choosing to impose salary cuts on
its workers.
"We have had no layoffs and it's not our intention to lay
off people," Laut said in an interview with Reuters.
The company's net earnings fell to C$131 million ($97.48
million), or 12 Canadian cents per share, in the fourth quarter
ended Dec. 31 from C$1.20 billion, or C$1.09 per share, a year
earlier. That was ahead of analysts' expectations of 9 Canadian
cents a share.
Canadian Natural Resources also said it expects to produce
between 809,000 and 868,000 barrels of oil equivalent per day in
2016, about 2 percent less than 2015 annual production volumes.
Some industry experts have forecast a ramp up in takeover
activity in the sector as many companies need to consolidate in
order to survive but Laut said sellers of assets were still
expecting higher prices than buyers were willing to spend.
"I think there's still too big a gap between sellers'
expectations and what the buyer wants to pay. We look at every
asset that comes through our core areas. I don't see us being
that active although we do always look," he said.
Shares in Canadian Natural Resources were up 9 percent at
1425 ET (1925 GMT).
($1 = 1.3413 Canadian dollars)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.