Good news Canadian Natural Sets 2015 Budget At $8.6 Billion NOV. 6, 2014 – VIEW ISSUE Canadian Natural Resources Limited has set its 2015 budget at $8.6 billion, up from an initial budget of $7.7 billion set for 2014. However, this year’s budget swelled to $11.93 billion with the large acquisition of natural gas-weighted conventional Canadian assets from Devon Energy Corporation. Canadian Natural is forecasting production growth of 11 per cent in 2015 over 2014 levels to 893,000 boe a day. Cash flow is targeted to be $9.4 billion in 2015, and free cash flow is forecast at $800 million, after 2015 capital spending. About $2 billion of the 2015 capital budget represents funds the company can reallocate over the course of 2015, if required. Conventional oil and NGL Total crude oil and NGL production is forecast to increase by nine per cent to 571,000-611,000 bbls a day in 2015. The company’s North America oil and NGL division includes light oil, primary heavy oil and Pelican Lake heavy crude. Primary heavy oil production is expected to be comparable to forecasted 2014 levels, ranging between 144,000 and 147,000 bbls a day with targeted 2015 capital spending of $1.1 billion. That includes the drilling of 732 net primary heavy oil wells in 2015. CNRL said primary heavy oil is the most flexible part of its portfolio. Pelican Lake heavy oil (polymer flood) production is targeted to grow by seven per cent to the 52,000-55,000 bbl-a-day range, while planned 2015 capital of $240 million remains comparable to 2014 levels. North America light oil volumes are targeted to increase by nine per cent to 96,000-100,000 bbls a day with targeted 2015 capital spending of $480 million. CNRL said it continues to leverage technology with secondary and tertiary recovery projects on its large asset base. The company plans to drill 49 net light oil wells and continues to advance horizontal well multi-frac technology across its land base. Oilsands Combined output from thermal bitumen operations and the Horizon oilsands mine is forecast at 237,000-261,000 bbls a day for 2015. Thermal oil output is targeted to grow 14 per cent in 2015 to 126,000-140,000 bbls a day as a result of the ramp-up of production at Kirby South and production associated with pad developments at Primrose. Total spending on thermal oil in 2015 is expected to be $1.1 billion. Kirby North Phase 1 budgeted capital for 2015 is $575 million. This will progress the construction of the central processing facility and initiate the drilling program. Targeted total project capital for Kirby North is $1.45 billion, or $36,000 per flowing bbl, at a project capacity of 40,000 bbls a day. The company expects to be about 70 per cent complete on the overall Kirby North project by year-end 2015. First steam-in is slated for the final quarter of 2016. Canadian Natural is implementing a low-pressure steamflood in Primrose East Area 1, which is targeted to exit 2015 between 15,000 and 17,000 bbls a day. CNRL plans to do low-pressure cyclic steam stimulation (CSS) in Primrose East Area 2, pending regulatory approvals. These projects are part of a plan to return to steaming operations in Primrose East with enhanced mitigation strategies in place to prevent a repeat of previous leaks of bitumen to surface. At Primrose South, four pads have begun CSS during the fourth quarter and are to ramp up through 2015. Additional pad developments are planned for 2015 at Primrose South, pending regulatory approval, with production to come onstream in 2016. Horizon phases 2 and 3 expansion is on schedule and within original cost estimates, CNRL said. Phases 2 and 3 are targeting to bring Horizon synthetic crude oil (SCO) production capacity to 250,000 bbls a day by late 2017 in staged increments. Horizon production is targeted to increase by four per cent in 2015 to 111,000-121,000 bbls a day of SCO. This targeted production range includes a 35-day planned major maintenance turnaround in the third quarter of 2015. The company continues to focus on safe, steady and reliable operations. The targeted production rate, excluding the planned turnaround, is 127,000 bbls a day, at the high end of the plant utilization target of 94-96 per cent. Construction progress to date at Horizon continues to meet cost and performance expectations. Project capital for 2015 is targeted at $2.45 billion. The company expects to be 70 per cent finished on the overall expansion project by year-end 2015. Horizon expansion activities continue to progress on track with Phase 2B slated to be finished and onstream, adding a 45,000 bbls a day, in late 2016. Natural gas Canadian Natural is Western Canada’s largest gas producer and a significant owner and operator of gas infrastructure. Total gas production is forecast at 1.79-1.83 bcf a day, a 16 per cent increase from 2014 forecasted volumes. This increase can be attributed to a liquids-rich drilling program, as well as opportunities derived from the gas-weighted Devon acquisition completed in 2014. Targeted 2015 gas spending of $920 million will continue the concentrated liquids-rich gas drilling program and advance the optimization of acquired assets. CNRL plans to further optimize acquired assets with facility consolidations, well reactivations and facility turnarounds. These activities are expected to generate significant free cash flow at average annual strip pricing. North America gas operating costs are targeted to decrease to a range of $1.30-$1.40 per mcf in 2015. Canadian Natural said it will undertake “a focused program of strategic wells” to maintain the strength of its asset base, with plans to drill 69 net gas wells in 2015, down from the 77 net wells forecasted for 2014. It said planned 2015 drilling reflects its continued commitment to developing its extensive liquids-rich asset base. International International oil production is forecast at 42,000-48,000 bbls a day, an increase of 43 per cent from the 2014 midpoint guidance. The company plans to spend $1.25 billion on international operations in 2015. ARTICLE SECTION: PRODUCER NEWS ARTICLE CATEGORY: CAPITAL SPENDING
Posted on: Thu, 25 Dec 2014 16:15:26 +0000
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