• 3 minutes China has *Already* Lost the Trade War. Meantime, the U.S. Might Sanction China’s Largest Oil Company
  • 7 minutes Saudi and UAE pressure to get US support for Oil quotas is reportedly on..
  • 11 minutes China devalues currency to lower prices to address new tariffs. But doesn't help. Here is why. . . .
  • 15 minutes What is your current outlook as a day trader for WTI
  • 10 hours Long Range Attack On Saudi Oil Field Ends War On Yemen
  • 3 hours Maybe 8 to 10 "good" years left in oil industry * UAE model for Economic Deversification * Others spent oil billions on funding terrorism, wars, suppressing dissidents * Too late now
  • 8 hours Will Uncle Sam Step Up and Cut Production
  • 14 hours In The Bright Of New Administration Rules: Immigrants as Economic Contributors
  • 2 hours Domino Effect: Rashida Tlaib Rejects Israel's Offer For 'Humanitarian' Visit To West Bank
  • 2 hours 'No - Deal Brexit' vs 'Operation Fear' Globalist Pushback ... Impact to World Economies and Oil
  • 23 hours Gretta Thunbergs zero carbon voyage carbon foot print of carbon fibre manufacture
  • 2 hours CLIMATE PANIC! ELEVENTY!!! "250,000 people die a year due to the climate crisis"
  • 1 day NATGAS, LNG, Technology, benefits etc , cleaner global energy fuel
  • 23 hours Continental Resource's Hamm wants shale to cut production. . . He can't compete with peers.
  • 2 hours Trump vs. Xi Trade Battle, Running Commentary from Conservative Tree House
  • 2 days Significant: Boeing Delays Delivery Of Ultra-Long-Range Version Of 777X
  • 2 days Why Oil is Falling (including conspiracy theories and other fun stuff)
Shale Pioneer Hamm Calls For Production Slowdown

Shale Pioneer Hamm Calls For Production Slowdown

U.S. shale producers need to…

Canadian Oil Giant Bucks The Trend, Triples 4th-Quarter Profit

The precipitous drop in oil prices since last June has been bad financial news to oil companies big and small, some suffering lower profits in the fourth quarter of 2014 and others doing worse with losses. All have responded with various remedies ranging from cuts in dividends to lower spending to layoffs.

Then there's Canadian Natural Resources Ltd., Canada’s largest producer of heavy crude oil. It nearly tripled its profit in the fourth quarter to C$1.2 billion (US $965 million) over the C$413 million during the same period in 2013. As a result, Canadian Natural was able to increase dividend payments to investors by a half-penny to C23 cents per share.

Canadian Natural’s secret for success isn’t really a secret. It simply pumped more oil equivalent, producing an average of 860,920 barrels of equivalent a day during the fourth quarter of 2014, up from 677,242 barrels in the same period the year before.

Related: Obama Called Out On Keystone Lies

And Canadian Natural’s management agreed to 10 percent pay cuts and reduce its annual cash retainer by 10 percent. But amid these cuts, Canadian Natural isn’t punishing its lower-level employees.

“We’re not going to reduce salaries for the rest of the staff, just the senior leadership,” CNRL president Steve Laut told the Financial Post, and it won’t be laying off staff to keep costs low. “We don’t believe we’re overstaffed, so we’ll stick with the team we have,” he said.

The company simultaneously cut spending as it watched oil continue to drop during the second half of 2014. As recently as January it said it would cut its 2015 budget by fully 28 percent, and that it would cut an additional C$150 million by postponing for a year some maintenance operations that originally had been scheduled for 2015.

This tactic actually could benefit operations. By putting off maintenance, Canadian Natural said, the downtime at its Horizon oil-sands project will be reduced to only six days from 36 days and increase the production of oil equivalent in Alberta by 10,000 barrels per day.

Related: Alaska To Build A State-Owned Gas Pipeline?

In a statement March 5 announcing its fourth-quarter performance, Canadian Natural said, “[W]e have been able to adapt quickly to the changing [oil pricing] conditions through our nimble, flexible capital allocation. With a disciplined business approach and a focus on operating and capital costs, our proven strategy allows us to withstand the current commodity price challenges 2015 is bringing.”

Canadian Natural’s Chief Financial Officer, Corey Bieber, added that the company’s flexibility helped maintain “a strong balance sheet and liquidity position. As a result … the quarterly cash dividend on common shares has once again been increased to [C] $0.23 per share, the 15th straight year of increases.”

Stewart Glickman, group head for energy at S&P Capital IQ, told the Financial Post that the price of Canadian Natural stock “is already trading at a premium to its historical averages,” and that he was maintaining a “hold” rating on it. He said the company’s fiscal discipline would maintain a positive cash flow in 2015, while its North American competitors struggle for cash.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play