Independent oil and gas explorer,
Canadian Natural Resources Ltd.
), reported mixed first-quarter 2013 results.
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Earnings per share, excluding one-time and non-cash items, were
37 Canadian cents (37 US cents) in the quarter, way behind the
Zacks Consensus Estimate of 43 US cents. The miss is primarily
due to significant fall in price realization for crude oil.
The Calgary, Alberta-based operator's per share profits were
however up from the first quarter of 2012 level of 27 Canadian
cents (27 US cents), favored by higher price realizations for
Quarterly revenues of C$3,755.0 million (US$3,726.1 million) were
up 6.5% from the year-ago period, owing to higher crude oil and
liquid production. The top line also surpassed our projection of
Canadian Natural's first-quarter cash flow - a key metric to
gauge its capability to fund new projects and drilling - amounted
to C$1,571.0 million, which was 22.7% higher than that achieved
in the first quarter of 2012.
The total production of Canadian Natural during the quarter was
up 11.2% year over year to a record 680,844 oil-equivalent
barrels per day (BOE/d). Oil and natural gas liquids (NGLs)
production increased approximately 23.7% to 489,157 barrels per
day (Bbl/d), primarily due to successful drilling of crude oil.
Natural gas production, however, declined 11.7% from the
prior-year period to 1,150 million cubic feet per day (MMcf/d)
due to the decision of Canadian Natural to reduce drilling
operations of natural gas and allocate capital for oil projects
that will provide higher return.
On a reported basis, the average realized crude oil price (before
hedging) during the first quarter was C$60.87 per barrel,
representing a drop of 26.1% from the corresponding quarter last
year. The average realized natural gas price (excluding hedging)
during the three months ended Mar 31, 2013 was C$3.51 per
thousand cubic feet (Mcf), up from the year-ago level of C$2.73
Capital Expenditure & Balance Sheet
Canadian Natural's total capital spending during the quarter was
C$1,736.0 million, as against C$1,596.0 million in the year-ago
As of Mar 31, 2013, Canada's second-largest oil producer had
C$18.0 million cash in hand and long-term debt of approximately
C$9,322.0 million, representing a debt-to-capitalization ratio of
Management is guiding towards production of 435,000-461,000 Bbl/d
of liquids and 1,090-1,110 MMcf/d of natural gas during the
second quarter of 2013. Canadian Natural is planning to drill 27
net thermal in-situ wells and 127 net crude oil wells in North
America during the Apr-Jun period of 2013.
For 2013, Canadian Natural estimates production of
482,000-513,000 Bbl/d of liquids and 1,085-1,145 MMcf/d of
Canadian Natural announced quarterly cash dividend payment of
12.5 Canadian cents per share, which has increased by 19.0% from
the year-ago level. The increased dividend will be paid on Jul 1,
2013, to shareholders of record as on Jun 14, 2013.
Stocks to Consider
Canadian Natural currently carries a Zacks Rank #3 (Hold),
implying that it is expected to perform in line with the broader
U.S. equity market over the next one to three months.
Meanwhile, one can look at energy firms like
EPL Oil & Gas Inc.
) as attractive investments. All these firms sport a Zacks Rank
#1 (Strong Buy) and are expected to significantly outperform the
broader U.S. equity market over the next one to three months.