Tags: CNQ | oil | sands | restart

CNQ Oil Sands Restart to Boost Output

By    |   Wednesday, 21 Dec 2011 10:32 AM

Energy exploration and production company Canadian Natural Resources (CNQ) experienced a drop in production in 2011 due to the forced shutdown of the company's oil sands facility. For 2012, the oil sands restart should significantly boost output.

Canadian Natural Resources is an energy company drilling for, producing and selling crude oil, natural gas and natural gas liquids. The company is the largest heavy oil producer in Canada and the second-largest natural gas producer. The company owns a major oil sands production facility known as Horizon Oil Sands. International operations include drilling and production operations in the North Sea and along the western coast of Africa.

For the first nine months of 2011, Canadian Natural Resources had earnings from operations of $1.57 billion or $1.42 per share, down from $1.86 billion and $1.70 per share. For the full year, the estimated earnings forecast is $2.18 per share and the 2012 consensus is $3.22 per share.

A January 2011 fire at the Horizon Oil Sands complex resulted in a complete shutdown of the facility. Production did not resume until the 2011 fourth quarter. In 2010, Horizon was producing on average 90,000 barrels of oil per day.

The result is the production from Canadian Natural Resources dropped to 579,000 barrels oil equivalent per day (BOE/d) for the first nine months of 2011 compared to production of 627,000 BOE/d in the same period of 2010.

Rising production

Without the Horizon Oil Sands production, the company had increased production to 612,000 BOE/d in the 2011 third quarter. The restart of oil sands production should quickly add 100,000 plus barrels per day to the production figure, significantly increasing production rates going into 2012.

The actual earnings of energy companies such as Canadian Natural Resources is very dependent on energy prices. The analyst earnings estimates for 2012 range from a low of $2.54 per share up to as high as $4.90, depending on each analyst’s view of energy prices.

Recently, the analysts at Citigroup reiterated their buy rating on CNQ with a target price 40 percent above the current share price. The analysts predict production will average 717,000 BOE/d.

The company reports next on March 5.

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Energy exploration and production company Canadian Natural Resources (CNQ) experienced a drop in production in 2011 due to the forced shutdown of the company's oil sands facility. For 2012, the oil sands restart should significantly boost output. Canadian Natural Resources...
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Wednesday, 21 Dec 2011 10:32 AM
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