Independent exploration and production (E&P) company,
Canadian Natural Resources Ltd.
), announced the achievement of first steam injection at its
Kirby South steam assisted gravity drainage (SAGD) project.
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The company's 100% owned and operated project was completed much
ahead of its planned steam-in date of Nov 2013 and within the
targeted budget, with the expected addition of production valued
at roughly $34,000 per flowing barrel.
The project is expected to reach production levels of 40,000
barrels per day (bbl/d) by the end of 2014. The company plans to
gradually increase production in the greater Kirby area to
approximately 140,000 bbl/d. The Kirby South project is the first
step of the planned expansion.
The thermal in-situ plan of CNQ includes increasing the company's
total capacity in an incremental manner - from the current
170,000 bbl/d to approximately 510,000 bbl/d - over a span of 15
Management believes that the Kirby project would strengthen the
company's asset folio and contribute to cash flow generation in
the near as well as long term.
Calgary, Alberta-based CNQ is engaged in the acquisition,
development and exploration of crude oil and natural gas
properties. Its core operations are focused in western Canada,
the United Kingdom sector of the North Sea and offshore West
We appreciate the company's diverse asset base both
geographically and in terms of products. In addition to the
conventional oil and gas production assets, CNQ is also a major
oil sands player with several projects in inventory. However, the
company pursues long-term projects which require large capital
outlay and several years of development. Also, we remain
concerned about the effects of a steep drop in crude prices on
Currently, CNQ holds 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 companies in the energy sector such as
Pioneer Southwest Energy Partners L.P.
Seacor Holdings Inc.
Range Resources Corporation
) as good investment opportunities. All the three firms sport a
Zacks Rank #1 (Strong Buy).