Karan Nagarkatti & Rod Nickel
Thursday, May 03, 2018
Canadian Natural Resources Ltd (CNRL) says it will produce less than expected this spring.
May 3 (Reuters) – Canadian Natural Resources Ltd (CNRL), one of Canada’s biggest oil and gas producers, will produce less than expected this spring, it said on Thursday, as transport bottlenecks deepen the price discount on Canadian heavy crude.
Tight capacity on pipelines and rail lines from the province of Alberta early this year led to the biggest discount in four years on Canadian heavy crude compared to U.S. benchmark light oil. The space crunch has since abated, causing the discount to shrink closer to normal levels.
Calgary-based Canadian Natural forecast production in the current second quarter of 1.054 million barrels of oil equivalent per day, missing analysts’ average estimate of 1.134 million, investment bank Tudor, Pickering, Holt & Co said in a note.
Fellow oil sands producers Cenovus Energy Inc has operated at lower capacity this year.
Smaller than expected production this quarter is also due to downtime at the Horizon mine, where CNRL is carrying out debottlenecking work to raise capacity, Eight Capital said in a note.
Canadian Natural shares fell 1 percent in early trading in Toronto to C$45.93.
The company reported a bigger-than-expected first-quarter profit, helped by higher overall oil production in the period.
Canadian Natural, which operates in Western Canada, the North Sea and offshore West Africa, said overall daily production rose to 1.12 million barrels of oil equivalent per day (boepd) in the first quarter from 876,907 boepd a year earlier.
However, CNRL’s average realized price for crude oil and natural gas liquids fell 8.5 percent to C$43.06 per barrel.
The company’s net income rose to C$583 million, or 47 Canadian cents per share, in the quarter ended March 31, from C$245 million, or 22 Canadian cents, a year earlier.
Excluding items, the company reported profit of 71 Canadian cents per share, while analysts on average expected a profit of 66 Canadian cents, according to Thomson Reuters I/B/E/S.
(Reporting by Rod Nickel in Winnipeg, Manitoba and Karan Nagarkatti in Bengaluru; Editing by Amrutha Gayathri and David Gregorio)
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