Canadian Natural Resources Limited’s Q3 total production of 1.65 MMBoe/d was down 1.5% from Q2, and oil and liquids production of 1.13 MMb/d was down 2.6% from Q2, due to the planned turnaround at Horizon, partially offset by record thermal bitumen production and stronger oil and NGLs production outside of oil sands.
At the Horizon mining and upgrading project, the planned 35-day turnaround only took 28 days, and CNRL is now targeting three-year turnaround intervals instead of two-year intervals, which should boost production over a three-year period by an average of 5 Mb/d. The Naphtha Recovery Unit Tailings Treatment project (+6.3 Mb/d) remains on track for completion in Q3 2027. Total Mining and Upgrading production is currently at about 640 Mb/d, well above the prior quarterly record of 595 Mb/d set in Q1. Synthetic crude prices averaged $6.65/bbl above WTI in Q3, thanks to strong diesel margins.
At its thermal bitumen assets (see map below), production averaged a record 300 Mb/d in Q3, up 9% sequentially and year-over-year, thanks to strong performance from wells at Pike 1 and a new pad at Primrose. Solvent (diluent) injection will begin at Kirby in H1 2027 and CNRL is looking at injecting solvent at Primrose.
Despite steep discounts for WCS due to high rates for ocean tankers and higher Venezuelan production, management noted the price spread between Hardisty and Houston is still tracking pipeline transportation costs, indicating Western Canada’s crude oil export pipelines are not completely full.
In terms of financials, with net debt now back down to its CAD$13 billion target CNRL plans to devote 100% of its free cash flow after dividends to share buybacks, and plans to spend CAD$800 MM per month doing so in November and December. Sulphur prices continue to be a story, with CNRL taking in CAD$0.9 billion of net sulphur revenue year-to-date through September.
Source: Canadian Natural Resources Limited
