Canadian Natural Resources Ltd (CNQ)
Q3’11 Wrap-Up: A Look Into 2012 – Canadian Oil Drives Growth
4 November 2011 ¦ 16 pages
[url]https://www.citigroupgeo.com/pdf/SNA93491.pdf[/url]
Adjusting Estimates – Based on actual third quarter results, rising operating cost
trends, improved oil price differentials plus other fine tuning, we have slightly adjusted
our 2011-13 EPS/CFPS estimates. Maintain Buy Rating with $50/share price target.
EPS
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Canadian Natural Resources Limited (CNQ.TO)
Strong Q3... 2012 Capital Budget Unveiled
5 pages, 1 exhibit
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Q3 Results: CNQ has reported CFPS of C$1.60, above our C$1.41 forecast
and consensus of C$1.42. Headline operating EPS of C$0.65 was also
above our C$0.50 forecast and consensus of C$0.55. Backing out insurance
proceeds related to the Horizon fire, we calculate ‘clean’ EPS of C$0.53.
Relative to our C$0.50 forecast, the remaining ‘delta’ is largely due to a
lower than expected tax rate (24% versus our 30% forecast). Production was
also better than expected, averaging 612.6 kboe/d, above consensus and
our 600 kboe/d forecast (and guidance for 600 kboe/d), due to better than
expected thermal production and Horizon volumes. Thermal in-situ crude oil
achieved record production of ~110 kb/d (vs our 100 kb/d forecast) due to
continued pad additions at Primrose, strong overall performance in the
quarter and the nature of the steaming and production cycles. Horizon
recommenced operations August 16th, with production averaging 108.2 kb/d
and 105.6 kb/d in September and October.
2012 Capital Budget: CNQ has provided its capital budget for 2012. Capital
spending is budgeted at C$7.2 billion, including C$2 billion at Horizon (we
currently forecast ~C$7 billion). CNQ is targeting 2012 production of 675–
726 kboe/d, representing a midpoint increase of 17% from the midpoint of
2011 average production guidance. Growth is driven largely by primary
heavy crude, thermal in-situ (i.e. Primrose) and light oil and NGL production.
We currently forecast 2012 production of 708.1 kboe/d.
Other Updates: Construction at the Kirby Phase 1 SAGD project remains
on cost and on schedule. Drilling on the first of seven pads is completed and
has also commenced on the second pad, with completion targeted for Q4/11.
First steam-in is expected late 2013. At Pelican Lake, regulatory approvals
required to execute the 2012 expansion plans were received in Q3.
Companies Mentioned (Price as of 02 Nov 11)
Canadian Natural Resources Limited (CNQ.TO, C$34.98, OUTPERFORM, TP C$51.00) |
