A haul truck and shovel at CNRL’s oil sands operation in northern Alberta. Screenshot/YouTube/Canadian Natural
CNRL hits 1 million barrels per day of oil production
CALGARY — Canadian Natural Resources Ltd. president Tim McKay will retire next year after a five-year leadership stint that coincided with the Calgary-based company surpassing $100 billion in market value.
CNRL, Canada’s largest oil and gas producer by market capitalization, made the succession announcement Thursday — the same day it raised its quarterly dividend and reported a third-quarter profit of $2.34 billion, down from $2.81 billion a year ago.
McKay, an engineer who joined the company in 1990 and was promoted to president in 2018 to replace outgoing president Steve Laut, will assume the role of vice-chair on Feb. 28, 2024.
CNRL’s new president will be Scott Stauth, the company’s current chief operating officer of oilsands. As vice-chair, McKay will help with the management transition until his retirement next summer.
Company founder and billionaire Murray Edwards remains executive chair.
Like all Canadian oil and gas producers, CNRL has benefited from the last two years of strong commodity prices. In 2022, the company became the first-ever Canadian publicly traded oil and gas firm to surpass a $100-billion market cap, and CNRL continues to be a favourite among the investment community for its history of strong performance and healthy returns to shareholders.
On a conference call Thursday, McKay said shareholders should not expect significant changes after the announced C-suite changes.
“I don’t really see any real change to our business,” he said. “I think if you look at our succession (plan), everybody’s well ingrained with our company and understands all the opportunities that we have.”
In the third quarter, CNRL broke its all-time quarterly production volume for both liquids and natural gas, at approximately 1.03 million barrels per day and 2.1 million cubic feet per day.
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While McKay acknowledged that there have been a number of major oilpatch deals in both the U.S. and Canada recently, and that the industry will likely see further consolidation in the months to come, he said CNRL is not dependent on acquisitions in order to grow its output.
“Consolidation could happen here in Canada as well. But you know, the key for us, anyway, is that we have a huge reserve,” McKay said.
“We don’t have to do acquisitions to create or refine our reserves. We have that part in the bag. To me, we sit back and do what we do best.”
Like other Canadian oil producers, CNRL is eagerly awaiting the start-up of the Trans Mountain pipeline. The company is expected to ship several hundred thousand barrels per day on the pipeline, which will give Alberta oil producers additional export capacity to the West coast.
The additional export capacity is also expected to have a positive impact on the Western Canada Select differential, which is the term for the price discount Canadian heavy oil producers typically have to absorb on their product in part due to lack of pipeline egress.
On Thursday, McKay said the company expects to be called on to begin filling the pipeline soon.
“Right now we don’t know if that will happen here in the fourth quarter, or early next year,” he said.
“If it happens earlier, between now and the end of the year, that’s actually very positive in the sense that should start to tighten the WCS differential.”
CNRL said Thursday it will now pay a quarterly dividend of $1 per share, up from 90 cents.
The company’s profit amounted to $2.13 per diluted share for the quarter ended Sept. 30, down from $2.49 per diluted share a year earlier.
Revenue for the quarter totalled $9.90 billion, down from $10.46 billion in the same quarter last year.
On an adjusted basis, the company says it earned $2.59 per diluted share in its most recent quarter, down from $3.09 per diluted share a year ago. Analysts on average had expected an adjusted profit of $2.39 per share and $9.55 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.
This report by The Canadian Press was first published Nov. 2, 2023.
Companies in this story: (TSX:CNQ)
Amanda Stephenson, The Canadian Press
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