CALGARY – Canadian Natural Resources Ltd. (TSX:CNQ) is throttling back capital spending in 2018, but plans to increase production to more than one million barrels of oil equivalent per day.
Western Canada’s largest heavy oil and natural gas producer says it is budgeting to spend $4.3 billion, down about $500 million from its estimated capital budget for 2017.
Production, however, will rise by 17 per cent to about 1.13 million boe/d from about 970,000 boe/d this year as it ramps up its Horizon oilsands mine expansion and enjoys a full year of output from oilsands operations it bought from Royal Dutch Shell last spring.
On a webcast from its investor day in Toronto, CEO Steve Laut says the company can cut capital spending to as low as $3 billion per year to maintain production if oil prices slump.
It predicts it will have funds flow from operations of about $8.1 billion — generating free cash flow after dividends and capital spending of about $2.5 billion — if benchmark New York oil prices average US$52 per barrel and Alberta gas prices are at $2.11 per gigajoule.
Laut says the company will use its free cash flow to reduce debt, but will also consider acquisitions and returns to shareholders via dividends and share buybacks.