Independent exploration and production (E&P) company,
Canadian Natural Resources Ltd.
) reported fourth-quarter 2013 earnings (excluding one-time and
non-cash items) of 52 Canadian cents (49.5 US cents) ahead of the
year-ago quarter's adjusted profit of 33 Canadian cents, owing to
increased liquid and natural gas production.
However, the bottom line missed the Zacks Consensus Estimate of
56 US cents. Increased expenses hampered the result.
Quarterly revenues of C$3,947.0 million (US$3,759.5 million)
improved from the prior-year quarter level of C$3,700.0 million,
primarily due to higher oil and gas price realizations. However,
it failed to beat the Zacks Consensus Estimate of US$4,093.0
For the year ended Dec 31, 2013, Canadian Natural reported
earnings of C$2.20 (US$2.14) per share, which failed to beat the
Zacks Consensus Estimate of US$2.17. However, the top line came
ahead the year-ago period's adjusted profit of C$1.46. Revenues
stood at C$16,145.0 million higher from C$14,589.0 million in
Canadian Natural's fourth-quarter cash flow from operations - a
key metric to gauge capability to fund new projects and drilling
- amounted to C$1,782.0 million, up 15.1% year over year. The
rise in cash flow was primarily on increased sales of liquid in
In a separate release, the company reported a quarterly cash
dividend of 22.5 Canadian cents per share, to be paid on Apr 1,
2014 to shareholders of record as on Mar 17, 2014. This marks a
12.5% hike over the previous quarterly dividend of 20 Canadian
Total production of Canadian Natural during the quarter increased
2.8% year over year to 677,242 barrels of oil equivalent per day
Oil and natural gas liquids (NGLs) production increased
approximately 1.7% year over year to 478,038 barrels per day
(Bbl/d). Moreover, natural gas production improved 5.4% from the
prior-year quarter to 1,195 million cubic feet per day (Mmcf/d).
The average realized liquid price (before hedging) during the
fourth quarter was C$69.38 per barrel, representing a rise of
about 4.3% from the corresponding quarter last year. The average
realized natural gas price (excluding hedging) during the three
months ended Dec 31, 2013 was C$3.62 per thousand cubic feet
(Mcf), up 5.8% year over year.
Total expenses came in at C$3,428.0 million, reflecting a rise of
roughly 6.2% from C$3,228.0 million in the year-earlier quarter.
Capital Expenditure & Balance Sheet
Canadian Natural's total capital spending during the reported
quarter was C$2,091.0 million against C$1,767.0 million in the
As of Dec 31, 2013, Canada's second-largest oil producer had
C$16.0 million cash in hand and long-term debt (including current
potion) of approximately C$9,661.0 million, representing a
debt-to-capitalization ratio of 27.3%.
Canadian Natural maintains its 2014 liquid production projection
in the 521,000- 560,000 Bbl/d band (excluding output from Devon
properties). Moreover, the company increased its expected 2014
natural gas output to the 1,170-1,210 Mmcf/d range.
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 better-ranked upstream players like
Bellatrix Exploration Ltd
Crescent Point Energy Corp.
TransGlobe Energy Corporation
). All the players have a Zacks Rank #2 (Buy).
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