Our History

Our History

Canadian Natural’s strategy is deliver safe, reliable operations and maximize value for our shareholders. This has been our focus for over thirty years, and it is what we continue to focus on going forward. Our asset base is strong and balanced, underpinned by a significant base of long life low decline assets. We have conventional crude oil and natural gas operations in domestic and international basins, along with a world class oil sands mining and thermal operations that deliver sustainable adjusted funds flow over the long-term.


Canadian Natural is optimistic for 2021 and confident that its portfolio of assets underpinned by a significant base of long life low decline assets, combined with our flexible, high value E&P assets make Canadian Natural a truly unique, sustainable and robust company. The 2021 capital budget of approximately $3.2 billion drives targeted annual production growth of approximately 61,000 BOE/d, at the mid-point of our production range, from 2020 levels and robust free cash flow generation. At the current 2021 annual strip pricing of approximately US$57 WTI per barrel, the Company targets to generate significant annual free cash flow of approximately $4.9 billion to $5.4 billion, after our capital program and increased dividend. As a result, our balance sheet is targeted to strengthen further in 2021, with year-end debt to adjusted EBITDA targeted to improve to approximately 1.2x and debt to book capitalization targeted to improve to approximately 29%, at the mid-point of the targeted free cash flow range.

Through the hard work and dedication of Canadian Natural’s committed and talented teams, the Company remains well-positioned to continue to deliver effective and efficient operations and top-tier operational results. Canadian Natural is committed to sustainable, growing returns to shareholders and reducing our environmental footprint through innovative technology and a culture of continuous improvement and targets to build upon its history of creating premium value for its shareholders.


2020 brought many challenges, from the impacts of the global crude oil price war to the devastating effects of the COVID-19 pandemic.  Despite the challenges, the Company had a strong year operationally and financially. We were nimble in 2020, quickly lowering our capital program to $2.7 billion with minimal impact to annual production as we stayed within the Company’s original production guidance range, effectively managing through a volatile commodity price environment and low crude oil demand. Canadian Natural achieved record annual average production of 1,164 MBOE/d in 2020, a 6% increase compared to 2019 levels. The resilience and sustainability of our business model was evident in 2020 as annual adjusted funds flow was strong at approximately $5.3 billion, excluding the provision relating to the Keystone XL pipeline project. This was achieved through the commitment and hard work of our employees, who were rewarded with no economic layoffs due to the impacts of COVID-19.

In October, the Company closed its opportunistic acquisition of Painted Pony and exited 2020 with a strong balance sheet, as net debt, before acquisitions, was essentially unchanged from 2019 levels. Liquidity remained strong with approximately $5.4 billion available including cash and cash equivalents and short-term investments. Canadian Natural was patient and disciplined, maintaining its 13% quarterly dividend increase in March 2020 of $0.425 per common share throughout the year. Additionally, in March 2021, the sustainability of our free cash flow generation provided the Board of Directors confidence to increase our dividend by 11% to $1.88 per common share annually, marking the 21st consecutive year of dividend increases.

Environmental, Social and Governance (“ESG”) performance remains a top priority and investments to improve the Company’s performance and reduce environmental footprint continue. Canadian Natural has numerous opportunities to deploy new technology and capture innovation to reduce the Company’s Greenhouse Gas (“GHG”) emissions, while enhancing economic margins through continuous improvement initiatives. Over the last decade Canadian Natural has invested $3.7 billion in research and development, driving the necessary improvements to help the Company successfully reduce our corporate GHG emission intensity by 18% and methane emissions by 28%, from 2016 levels. Our safety record is top tier, as corporate total recordable injury frequency (“TRIF”) improved to 0.21 in 2020, a reduction of 58% from 2016 levels. The Company also reached significant environmental milestones, including the cumulative sequestration at our Quest facility of five million tonnes of CO2 captured from the Scotford Upgrader and the cumulative planting of two and a half million trees at our Oil Sands Mining and Upgrading operations. 


In 2019, Canadian Natural celebrated its 30th year as an Exploration and Production (“E&P”) company, and demonstrated the strength of our diverse, balanced and vast asset base by generating industry leading free cash flow of $4.6 billion. Our model is predicated on balancing our four pillars of capital allocation: returns to shareholders, balance sheet strength, resource value growth and opportunistic acquisitions. In 2019, we delivered on all four of these pillars.

As we exited 2018, the Canadian oil industry was faced with wider than normal crude oil differentials as a result of continued delays in new market egress from the Western Canadian basin. In response to wider differentials, the Alberta Government implemented, effective January 1, 2019, mandatory production curtailments to address this issue, under which companies were issued production quotas each month. Given Canadian Natural’s strong and flexible asset base, we were able to implement and execute on a curtailment optimization strategy through 2019, ensuring that we maximized the value of our quota and free cash flow generation.

In early 2019, Canadian crude oil pricing differentials quickly returned to normal levels, which coupled with our record production of 1,099,000 BOE/d, drove record adjusted funds flow of $10.3 billion in 2019 and net earnings of $5.4 billion. Returns to shareholders were significant in 2019 totaling $2.7 billion, including a 12% increase in the Company’s quarterly dividend and over $940 million returned via share repurchases. This marked the 19th consecutive year of dividend increases for our shareholders. Throughout 2019, Canadian Natural demonstrated its commitment to its balance sheet through the net retirement of approximately $2.35 billion of bonds and term facilities, while capturing an opportunistic acquisition of substantially all of the Devon Canada assets, which closed June 27, 2019.

On June 27, 2019, the Company closed the acquisition of substantially all the assets of Devon Canada, further strengthening our long life low decline asset base. These assets included significant producing thermal in situ and conventional heavy crude oil that have a production capability of approximately 128,000 bbl/d of crude oil. We were able to quickly integrate the acquired assets and were able to reduce operating costs at Jackfish by approximately $3.50/bbl or 30% from the initial operating costs at the time of acquisition by capturing synergies across our assets.

At Primrose, we drilled high return, drill-to-fill pads, which came on ahead of schedule and on budget. The Company achieved first oil from its Kirby North project in Q3 2019 and ramp up continued to be strong, exceeding expectations as a results of top tier execution and productivity with a December 2019 exit rate of 26,500 bbl/d. 


The Company achieved record annual production of approximately 1,079,000 BOE/d, delivering 12% production growth and 14% production per share growth over 2017 levels. Our industry leading Oil Sands Mining and Upgrading operations delivered record annual production of 426,190 bbl/d of Synthetic Crude Oil ("SCO") as a result of strong production at Horizon and a full year of production from the Athabasca Oil Sands Project. As a result, Oil Sands Mining and Upgrading achieved record low annual adjusted operating costs of $21.05/bbl (US$16.24/bbl) of SCO as a result of safe, steady and reliable operations, high utilization, and leveraging expertise to capture synergies between the two mine sites.
Based on the significant progress made to date in strengthening the Company's balance sheet as well as the sustainability of Canadian Natural's free cash flow in 2018, the Board of Directors approved a more defined free cash flow allocation policy in accordance with the Company's four stated pillars. Under the new policy, the Company will target to allocate, on an annual basis, 50% of its residual free cash flow, after budgeted capital expenditures and dividends, to share purchases under its Normal Course Issuer Bid (“NCIB”) and the remaining 50% to reducing debt levels on the Company's balance sheet. This free cash flow policy will target a ratio of debt to adjusted 12 months trailing EBITDA of 1.5x and an absolute debt level of $15.0 billion, at which time the policy will be reviewed by the Board. At present, this policy is expected to be in place until at least the Company's NCIB renewal in May 2019, subject to quarterly review by the Board of Directors. This policy is effective November 1, 2018.
Throughout 2018, Canadian Natural demonstrated its financial strength and resilience to market challenges through reduced absolute long-term debt by approximately $1.8 billion and upgraded credit ratings. Free cash flow was significant in 2018 at approximately $2.8 billion after net capital expenditures and dividend commitments. Canadian Natural's free cash flow allocation policy was demonstrated in 2018 as approximately 46% of annual 2018 free cash flow was allocated to share purchases and the remaining 54% was allocated to the Balance Sheet, including the impact of foreign exchange, working capital and other adjustments. Returns to shareholders were significant in 2018, totaling over $2.8 billion with approximately $1.6 billion returned through dividends and over $1.2 billion returned through share purchases of 30.9 million shares for cancellation. 


The Company completed its transition to a Long Life Low Decline asset base with the successful completion of the Phase 3 expansion at Horizon. Record yearly crude oil and NGL production of 685,236 bbl/d was achieved, a 31% increase from 2016 largely driven by Oil Sands Mining & Upgrading. Canadian Natural continued its focus on effective and efficient operations and optimizing operating costs including capturing synergies on acquired assets.

In the second quarter, the Company completed a transformational acquisition of a 70% working interest and operatorship of the Athabasca Oil Sands Project (AOSP) mines and a 70% interest in the Shell operated Scotford upgrader and Quest Carbon Capture and Storage project. In addition to the acquired oil sands production capacity of approximately 204,000 bbl/d of synthetic crude oil (SCO), the Company acquired approximately 14,000 bbl/d of other heavy crude oil properties in the Peace River area of northern Alberta. In late 2017, the Company further consolidated the lands held in its world class Pelican Lake polymer flood, with the acquisition of certain Pelican Lake assets and began to reinitiate polymer flood on the acquired lands.

In March 2017 the Company increased its quarterly dividend to C$0.275 per share, representing the 17th consecutive year of dividend increases.


Commodity pricing continued to be challenged with no signal of significant change to the upside. Canadian Natural remained dedicated to achieving further cost reductions both on the operational and capital sides. The company continued to see results from its cost cutting efforts as the Company realized an additional $560 million of operating cost savings compared to 2015 on a per unit basis.

In 2016, the Horizon Oil Sands expansion continued to be a priority for Canadian Natural’s capital allocation. The tie-in of the major components of Horizon Phase 2B was successfully completed during the Company’s planned major turnaround.  A phased commissioning program for the Horizon Phase 2B project was rolled out in March of 2016 and start-up was completed in October with full production achieved in November.

As targeted, the Company continued to deliver returns to shareholders with the June 6th distribution of approximately 22.6 million PrairieSky common shares at a volume weighted average price of $24.89 per share.  As well, the Company declared an increase to the quarterly dividend on the Company’s common shares by $0.02 per share to $0.25 per share, the 16th consecutive year of increases to the Company’s dividend since 2001. Subsequent to year-end, the Company further increased its quarterly dividend to $0.275 per common share.


A steep decline in commodity prices challenged the economic environment for the entire crude oil and natural gas industry. For Canadian Natural, this challenging environment emphasized the effectiveness of our proven strategy. The Company exercised its capital flexibility at the beginning of the year resulting in a reduction of its original budgeted capital spending by $3.4 billion. The capital reductions primarily related to reduced drilling activity and related facility capital for its North America and International conventional operations, as well as the deferral of capital expenditures related to the Kirby North thermal in situ project. Canadian Natural continued to focus on its transition to a Long Life Low Decline asset base allocating the majority of capital expenditures toward the Horizon expansion. Despite an overall reduction in the Company’s capital budget, production grew by 8% to 851,901 BOE/d from 2014 levels.

Canadian Natural’s heightened its focus on effective and efficient operations in response to the change in commodity pricing. As a result of the detailed work performed by the Company’s operating and technical teams, operating cost reductions in 2015 accumulated to over $1.1 billion based on 2014 unit rates versus 2015 unit rates. Our teams worked steadily to reduce capital costs related to drilling, completions and facilities. From 2014 to 2015, cost reductions ranging from 20% to 25% were attained throughout the Company’s North America Exploration & Production (E&P) operations.

Canadian Natural increased its quarterly dividend to C$0.23 per share, representing the 15th consecutive year of dividend increases since the Company first paid a dividend in 2001.


Canadian Natural entered into several agreements to acquire conventional crude oil and natural gas assets primarily located in Western Canada in areas adjacent or proximal to Canadian Natural’s current operations.  The acquired assets are high quality, concentrated liquids-rich natural gas weighted assets, with additional light crude oil exposure. The acquired assets also included associated key strategic facilities, a royalty revenue stream and undeveloped land.

The Company took another step toward the transition to a longer-life, low decline asset base with the completion of the Horizon Phase 2A expansion in Q3/14. Subsequent to successful start-up of the expansion in which additional coker capacity and equipment were added, the Horizon plant’s name plate capacity was increased to 133,000 bbl/d of SCO. The strong performance of new equipment along with the implementation of an optimized mining strategy have enhanced the stability of the extraction and upgrading processes, resulting in a further increase to plant nameplate capacity to 137,000 bbl/d of SCO late in 2014.

 In December 2014, the Company sold a substantial portion of its royalty assets to PrairieSky for a total purchase price of $1.66 billion including $673 million in cash and $985 million in PrairieSky shares (equivalent to 44,444,444 PSK common shares).


Canadian Natural’s Kirby South steam assisted gravity drainage (SAGD) project achieved first steam injection ahead of schedule and on budget during the third quarter of 2013. Additionally during the third quarter of 2013,  plant expansion at Septimus, Canadian Natural’s premium liquids-rich natural gas Montney play, was completed. The newly expanded gas plant reached its production capacity of 125 MMcf/d and approximately 12,200 bbl/d of liquids with the completion of new wells.

Horizon successfully completed the first major planned turnaround in 2013 which contributed to increased reliability across operations. Horizon averaged over 100,000 bbl/d of high quality SCO during the year.

Canadian Natural completed the acquisition of certain conventional light crude oil and natural gas properties. The added production and undeveloped land base was complementary to Canadian Natural’s existing assets and was concentrated in light oil weighted assets with strong netbacks and a long reserve life.


The Company achieved record yearly crude oil and NGL production of 326,829 bbl/d from its North America – Exploration and Production segment.

In the fourth quarter of 2012,the Company’s Board of Directors sanctioned the Redwater Upgrader/Refinery project, an exciting new facet of our diverse asset portfolio. Combining our strengths with the expertise of NW Refining Inc., the Company formed a partnership targeting a competitive return on capital. The project targets to add 50,000 barrels of bitumen conversion capacity to the market in 2018, further contributing to improved heavy crude oil pricing for all of the Company’s heavy crude oil barrels.


Canadian Natural focused on the continued development of our high quality thermal in situ assets, expanded the Pelican Lake tertiary recovery project and planned  for the Horizon oil sands mine expansion – all part of the Company’s strategy to transition to a longer-life  low decline, more sustainable asset mix. In addition, the Company executed record drilling programs in primary heavy crude oil and North America light crude oil, and generated strong free cash flow from our international operations.


The Company received regulatory approval for its Kirby In situ Oil Sands Project and the Board of Directors sanctioned the Kirby South project with construction commencing in the fourth quarter of 2010. Peak production for at Kirby South is targeted to be 40,000 bbl/d with an overall cost target of $1.25 billion.


Canadian Natural realized first SCO at the Horizon Oil Sands on February 28, 2009. Shortly afterwards on March 18, 2009, Canadian Natural had its first shipment of SCO into the sales pipeline, and began to market production of SCO in all traditional SCO markets and refineries. In Q4/09, the Company targeted reliable and consistent production at design capacity of 110,000 bbl/d at Horizon.

Baobab production in Offshore Côte d’Ivoire was restored to approximately 11,000 bbl/d net to Canadian Natural after completing a drilling program in Q1/09.


The Primrose East expansion added 40,000 bbl/d of capacity after achieving first production. The Company targets future development of its thermal crude oil assets should commodity pricing warrant economic growth. The Company applied for regulatory approval of the Kirby In Situ Oil Sands project, the next project to expand the Company’s thermal crude oil portfolio.

2005 Construction of the Horizon Project began in 2005. The Company targets to expand production of SCO from this world class asset to 250,000 bbl/d of SCO with no decline in production for decades to come.  


Deep Basin natural gas of Northwest Alberta was initially acquired as part of a larger acquisition and further augmented by other acquisitions. We leveraged our knowledge and expertise between British Columbia and Northwest Alberta to make both areas stronger. These areas are home to numerous resource plays and shale gas opportunities and are a part of our future growth story.


International offshore properties were first acquired as part of a larger transaction. The acquired package included numerous, fractional interests around the world. We carefully rationalized the assets in accordance with our strategy and expertise. The North Sea represents a mature basin where we look to economically extend field lives – the same approach used in Western Canada. Offshore Africa provides the opportunity for exploration and development growth while leveraging our offshore expertise.


Thermal in situ heavy crude oil properties were purchased by Canadian Natural. As one of the initial entrants in the field we were better able to understand and economically bid on asset packages including the landmark acquisition in 1999 where the majority of our thermal and Horizon Project mining properties were acquired. Today we are a leader in thermal in situ crude oil developments and have a clearly defined plan for future growth.


Heavy crude oil operations were new to Canadian Natural following the acquisition of primary heavy crude oil lands in 1993. We took our time and developed an expertise in these operations. This allowed us to intelligently acquire and expand our holdings. Today, we are a recognized leader leveraging technology to further grow and recover crude oil. Fields such as Pelican Lake will continue to add significant value to shareholders for years to come.


Northeast British Columbia natural gas basin was entered, providing early knowledge and a leading position into this prolific basin. Canadian Natural became a major natural gas producer in British Columbia through acquisition and drilling. Advances in technologies and new resource plays such as Montney Shale gas means that this area will continue to be a major growth driver for the foreseeable future.


Shallow gas basin of Alberta was the modern iteration of the Company’s birthplace and is still a major contributor to our success.