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Canadian Natural (CNQ) Hikes 2021 CapEx & Production View Y/Y

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Canadian Natural Resources Limited (CNQ - Free Report)  recently provided its capital budget and production guidance for 2021, expecting its output and capex to increase next year as it presumes commodity prices and demand to rise from pandemic slumps.

Capital Spending View

This Calgary-based energy player’s capital expenditure for 2021 is estimated at C$3.21 billion, indicating an 18.9% increase from its projected investment for 2020. It anticipates disbursing C$1.345 billion for conventional and unconventional assets while also plans to spend C$1.860 billion on its long-life low decline assets in 2021.

Production in 2021

Canadian Natural expects its 2021 oil and natural gas liquid production to be 920-980 thousand barrels per day (bpd), 4% higher than the 2020 forecast level. Moreover, natural gas output for next year is expected within 1.62-1.68 billion cubic feet per day, suggesting a rise of approximately 11% from this year’s guided figure.

Overall, 2021 production is targeted within 1.19-1.26 million barrels of oil equivalent (comprising 78% liquids and 22% gas), implying an uptick above the current year’s envisioned output of 1.16 million bpd.

Financials

Canadian Natural continues to focus on maintaining solid finances, backed by a strong balance sheet. For 2021, it anticipates generating free cash flow in the range of $2-$2.5 billion after paying dividends.

Regardless of the challenges faced in 2020, such as the unexpected drop in oil prices and a decline in global demand due to the novel coronavirus outbreak, Canadian Natural continued focusing on safety and maximizing its shareholder value through improved performances and cost minimization.

Recently, another Canadian energy player Suncor Energy (SU - Free Report) issued its capital Investment and production view for 2021, predicting both metrics to grow next year.

Suncor projects its average upstream production for 2021 in the range of 740,000-780,000 barrels of oil equivalent per day (Boe/d), approximately 10% higher than the midpoint of the 2020 guided range. Meanwhile, this Alberta-based integrated player’s total capex is assumed in the range of C$3.8-C$4.5 billion for2021, higher than 2020's guided range of C$3.6-C$4 billion.

Company Profile

Established in 1973, Canadian Natural Limited is one of the largest independent energy companies in Canada engaged in exploration, development and production of oil and natural gas. The company boasts a diversified portfolio of crude oil (heavy as well as light), natural gas, bitumen and synthetic crude oil (SCO). 

Zacks Rank & Key Picks

Canadian Natural currently carries a Zacks Rank #3 (Hold). Some better-ranked players in the energy space are CNOOC Limited (CEO - Free Report) and Antero Midstream Corporation (AM - Free Report) , each presently holding a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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