CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES 2018 BUDGET CALGARY, ALBERTA NOVEMBER 7, 2017 FOR IMMEDIATE RELEASE

Transcription

1 CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES 2018 BUDGET CALGARY, ALBERTA NOVEMBER 7, 2017 FOR IMMEDIATE RELEASE Cmmenting n the Cmpany s 2018 budget, Steve Laut, President f Canadian Natural, stated, Canadian Natural s transitin t a lng life lw decline asset base is cmplete, as the Hrizn Phase 3 expansin has been successfully executed. The strength f the Cmpany is reflected in the 2018 budget as we target verall prductin between 1,090,000 and 1,170,000 BOE/d. This represents a 17% increase ver 2017 prductin levels with a capital prgram targeted at $4.3 billin, $0.5 billin less than 2017, excluding the Athabasca Oil Sands Prject acquisitin capital. This allws the Cmpany significant capital flexibility t allcate capital t the highest return prjects and t maximize sharehlder value. Free cash flw is targeted t be in the $2.3 billin t $2.7 billin range, after the Cmpany s current dividend. Canadian Natural s Chief Operating Officer, Tim McKay, cntinued, The Cmpany will fcus n reliability acrss ur diverse asset base and cntinue t integrate and ptimize the assets acquired in Mdest drilling prgrams will ensure cst cntrl, which is essential in this cmmdity price envirnment. Prject develpment at ur Steam Assisted Gravity Drainage prject, Kirby Nrth will cntinue in 2018 as we advance the prject fr ultimate cmpletin in Q4/19. Canadian Natural s Chief Financial Officer, Crey Bieber, cntinued, In 2018, the Cmpany targets t cntinue t strengthen ur balance sheet metrics with increasing free cash flw. Ample liquidity and significant capital flexibility in 2018 will allw the Cmpany t effectively manage ur financial psitin in a vlatile cmmdity price envirnment.

2 HIGHLIGHTS OF THE 2018 BUDGET Canadian Natural s 2018 capital budget is targeted at apprximately $4.3 billin, $0.5 billin less than 2017, excluding the Athabasca Oil Sands Prject ( AOSP ) acquisitin capital. The Cmpany targets t deliver 2018 prductin grwth f apprximately 17% at the midpint f 2018 budget guidance with targeted maintenance capital at apprximately $3.0 billin, demnstrating the benefit f a lng life lw decline asset base. The Cmpany s 2018 funds flw frm peratins is targeted t be apprximately $7.9 billin t $8.3 billin. Free cash flw is targeted t be apprximately $2.3 billin t $2.7 billin, after budgeted capital and the current dividend, based upn average annual WTI strip pricing f US$52.03/bbl and AECO strip pricing f C$2.11/GJ. Overall crude il and NGL prductin is targeted t increase frm 2017 levels by 23%, ranging frm 815,000 bbl/d t 885,000 bbl/d in The increase represents apprximately 160,000 bbl/d f prductin grwth and is largely as a result f the cmpletin f the Phase 3 expansin at Hrizn Oil Sands Mining & Upgrading ( Hrizn ) and a full year f prductin at the AOSP. Overall prductin in 2018 is targeted t be between 1,090,000 BOE/d and 1,170,000 BOE/d, with a prduct mix f apprximately 75% crude il and NGLs and 25% natural gas. In 2018 apprximately 55% f the Cmpany s prductin is targeted t cme frm lng life lw decline assets. Nrth America Explratin & Prductin Nrth America crude il and NGL prductin prvides significant capital flexibility as the Cmpany s large asset base encmpasses light crude il, primary heavy crude il and Pelican Lake heavy crude il. The Cmpany s strng asset base is cmplemented by an extensive netwrk f wned infrastructure and is supprted by a deep inventry f lw capital expsure, high return n capital prjects that deliver significant prductin and value grwth pprtunities. The Cmpany is targeting a capital prgram f $1,555 millin fr Nrth American E&P in Plans fr 2018 are summarized as fllws: Nrth American crude il and NGL prductin is targeted t range frm 253,000 bbl/d t 263,000 bbl/d, representing a 7% increase frm 2017 prductin levels. The Cmpany s 2018 drilling prgram is fcused n value grwth ver the near, mid and lng term. Canadian Natural targets t drill apprximately 67 net prducing wells in its Nrth America light crude il peratins, a significant part f the Cmpany s balanced prtfli. This represents an increase f 28 net prducing wells frm 2017 targeted levels. The Cmpany targets cntinued strng capital efficiencies and high returns with a right-sized primary heavy crude il drilling prgram f 377 net prducing wells, a 6% decrease cmpared t 2017 targeted levels. The Cmpany targets a drilling prgram f 22 net prducing wells in 2018 at Pelican Lake, its industry leading plymer fld asset. This represents an increase f 5 net prducing wells frm 2017 targeted levels. In 2018, Canadian Natural will integrate and ptimize peratins at its recently acquired Pelican Lake lands t maximize sharehlder value. Crprate natural gas prductin is targeted t range frm 1,650 MMcf/d t 1,710 MMcf/d, in-line with 2017 levels, as natural gas prices are expected t cntinue t be challenged in The Cmpany targets a mdest natural gas drilling prgram f 17 net prducing wells representing a decrease f 3 net prducing wells cmpared t 2017 targeted levels. The Cmpany targets t cntinue its fcused drill t fill strategy in its liquid rich assets in the Mntney and the Deep Basin, where the Cmpany wns and perates significant infrastructure. Nrth America Thermal in Situ Oil Sands Thermal in situ il sands assets prvide a substantial, lw risk prductin prfile that can generate significant sustainable free cash flw. Thermal in situ prductin is targeted t be in line with 2017 levels in the range f 107,000 bbl/d t 127,000 bbl/d in Ttal thermal in situ capital in 2018 is targeted t be $960 millin, as the Cmpany targets t drill 119 net prducing thermal wells. In 2018, the Cmpany will initiate high value pad additins at Primrse, which will add lng life lw decline prductin cmmencing in Q4 f Additinally, drilling at the Cmpany s 40,000 bbl/d Kirby Nrth Steam Assisted Gravity Drainage ( SAGD ) prject will begin in Canadian Natural Resurces Limited 2 Press Release

3 Primrse drilling activity is targeted t be 64 net prducing wells in First prductin frm this drilling prgram is targeted in Q4 f 2019 with exit 2019 prductin f 25,000 bbl/d. Canadian Natural will advance its develpment f the Kirby Nrth SAGD prject in In the year, the Cmpany targets prject capital f apprximately $465 millin t cmplete 49 net prducing wells, 44 injectr wells and facility cnstructin. First steam injectin is targeted fr late 2019 and first prductin is targeted in Q1 f Overall targeted prductive capacity at Kirby Nrth is 40,000 bbl/d. Drilling activity at Kirby Suth will be minimal with 6 net prducing wells targeted. Nrth America Oil Sands Mining and Upgrading Canadian Natural s transitin t a lng life lw decline asset base is cmplete. Oil Sands Mining & Upgrading prductin is targeted t increase significantly in 2018 due t the successful cmpletin f the Phase 3 expansin at Hrizn and a full year f prductin at the AOSP. Oil Sands Mining and Upgrading prductin is targeted t increase by greater than 50% in 2018 frm 2017 levels. The 2018 prductin guidance range fr Oil Sands Mining and Upgrading is 415,000 bbl/d t 450,000 bbl/d f synthetic crude il. The 2018 targeted prductin range includes a 21 day planned turnarund at the Hrizn peratins and includes planned pit stps at the AOSP in the spring and fall f Oil Sands Mining and Upgrading targeted capital includes apprximately $500 millin fr cmpletin f envirnmental wrk related t the Phase 3 expansin, technlgy and prject develpment. Sustaining capital is targeted t be $660 millin, while $220 millin is targeted fr turnarunds and reclamatin activities. Internatinal Explratin & Prductin Internatinal light crude il prductin is targeted t range frm 40,000 bbl/d t 45,000 bbl/d, a decrease f apprximately 8% frm 2017 prductin levels, reflecting natural prductin declines capital at the Cmpany s Internatinal assets is targeted t be in-line with 2017 levels at apprximately $410 millin, which includes apprximately $70 millin fr decmmissining activities. The Cmpany targets t drill 4.6 net prducing wells in the Nrth Sea and 1.7 net prducing wells at the Babab field in Cȏte d Ivire. PRODUCTION AND CAPITAL GUIDANCE Canadian Natural cntinues its strategy f maintaining a large diverse prtfli f assets. This enables the Cmpany t prvide cnsistent grwth in prductin and t maximize sharehlder returns thrugh flexible capital allcatin. Annual budgets are develped and scrutinized thrughut the year and changed if necessary in the cntext f prject returns, prduct pricing expectatins, and the balancing f prject risks and time hrizns. Canadian Natural maintains a high wnership level and peratrship in its prperties and can therefre cntrl the nature, timing and extent f expenditures in each f its prject areas. Daily prductin vlumes (befre ryalties) 2017 Frecast 2018 Budget Natural gas (MMcf/d) 1,655-1,705 1,650-1,710 Crude il and NGLs (Mbbl/d) Nrth America Explratin and Prductin Nrth America Thermal In Situ Nrth America Oil Sands Mining and Upgrading Internatinal Ttal crude il and NGLs Ttal BOE/d 939-1,001 1,090-1,170 Canadian Natural Resurces Limited 3 Press Release

4 The frecast capital expenditures fr 2017 and the 2018 Budget guidance are as fllws: Capital Expenditures (C$ millins) 2017 Frecast 2018 Budget Nrth America natural gas and NGLs $ 460 $ 440 Nrth America crude il 920 1,115 Internatinal crude il Ttal Explratin and Prductin $ 1,800 $ 1,965 Ttal Thermal In Situ Oil Sands $ 380 $ 960 Oil Sands Mining and Upgrading Envirnment, technlgy and prject develpment $ 925 $ 500 Sustaining capital Turnarunds, reclamatin and ther Ttal Oil Sands Mining and Upgrading $ 1,705 $ 1,380 Net acquisitins, midstream and ther (1) $ 970 $ 30 Ttal Capital Expenditures $ 4,855 $ 4, Frecast excludes acquisitin csts f AOSP transactin. The abve capital expenditures fr the 2017 frecast and the 2018 budget incrprate the fllwing levels f drilling activity: Drilling activity (number f net prducing wells) 2017 Frecast 2018 Budget Targeting natural gas Targeting crude il Targeting thermal in situ Ttal Nte: 2017F and 2018B excludes stratagraphic and service wells. Canadian Natural Resurces Limited 4 Press Release

5 Special Nte Regarding Currency, Prductin and Reserves In this dcument, all references t dllars refer t Canadian dllars unless therwise stated. Reserves and prductin data are presented n a befre ryalties basis unless therwise stated. In additin, reference is made t crude il, natural gas and NGLs in cmmn units called barrel f il equivalent ("BOE") r thusand cubic feet f gas equivalent ( McfGE ). A BOE is derived by cnverting six thusand cubic feet f natural gas t ne barrel f crude il r NGLs (6Mcf:1bbl). An McfGE is derived by cnverting ne barrel f crude il r NGLs t six thusand cubic feet f natural gas (1bbl:6Mcf). These cnversins may be misleading, particularly if used in islatin, since the 6Mcf:1bbl rati r the 1bbl:6Mcf rati is based n an energy equivalency cnversin methd primarily applicable at the burner tip and des nt represent a value equivalency at the wellhead. In cmparing the value rati using current crude il r NGL prices relative t natural gas prices, the 6Mcf:1bbl r 1bbl:6Mcf cnversin ratis may be misleading as an indicatin f value. This dcument, herein incrprated by reference, has been prepared in accrdance with IFRS, as issued by the Internatinal Accunting Standards Bard. Fr the year ended December 31, 2016 the Cmpany retained Independent Qualified Reserves Evaluatrs ( IQREs ), Sprule Assciates Limited and Sprule Internatinal Limited (tgether as Sprule ) and GLJ Petrleum Cnsultants Ltd. ( GLJ ), t evaluate and review all f the Cmpany s prved and prved plus prbable reserves with an effective date f December 31, 2016 and a preparatin date f February 6, Sprule evaluated the Nrth America and Internatinal light and medium crude il, primary heavy crude il, Pelican Lake heavy crude il, bitumen (thermal il), natural gas and NGLs reserves. GLJ evaluated the Hrizn SCO reserves. The evaluatin and review was cnducted in accrdance with the standards cntained in the Canadian Oil and Gas Evaluatin Handbk ( COGE Handbk ) and disclsed in accrdance with Natinal Instrument Standards f Disclsure fr Oil and Gas Activities ( NI ) requirements. Reserves disclsure is presented in accrdance with Canadian reprting requirements using frecast prices and escalated csts. The Cmpany annually disclses net prved reserves and the standardized measure f discunted future net cash flws using 12-mnth average prices and current csts in accrdance with United States Financial Accunting Standards Bard Tpic 932 Extractive Activities - Oil and Gas in the Cmpany s Frm 40-F filed with the SEC in the Supplementary Oil and Gas Infrmatin sectin f the Cmpany s Annual Reprt. Special Nte Regarding nn-gaap Financial Measures This release shuld be read in cnjunctin with the Cmpany's Management's Discussin and Analysis ("MD&A") and the unaudited interim Cnslidated Financial Statements fr the three mnths and nine mnths ended September 30, 2017 and the MD&A and the audited cnslidated financial statements fr the year ended December 31, All dllar amunts are referenced in millins f Canadian dllars, except where nted therwise. The Cmpany s unaudited interim cnslidated financial statements fr the perid ended September 30, 2017 and MD&A have been prepared in accrdance with Internatinal Financial Reprting Standards ( IFRS ) as issued by the Internatinal Accunting Standards Bard. This release includes references t financial measures cmmnly used in the crude il and natural gas industry, such as adjusted net earnings (lss) frm peratins, funds flw frm peratins (previusly referred t as cash flw frm peratins), and adjusted cash prductin csts. These financial measures are nt defined by IFRS and therefre are referred t as nn-gaap measures. The nn-gaap measures used by the Cmpany may nt be cmparable t similar measures presented by ther cmpanies. The Cmpany uses these nn- GAAP measures t evaluate its perfrmance. The nn-gaap measures shuld nt be cnsidered an alternative t r mre meaningful than net earnings (lss) and cash flws frm perating activities, as determined in accrdance with IFRS, as an indicatin f the Cmpany's perfrmance. The nn-gaap measures adjusted net earnings (lss) frm peratins and funds flw frm peratins are recnciled t net earnings (lss), as determined in accrdance with IFRS, in the Financial Highlights sectin f the Cmpany's MD&A. The nn-gaap measure funds flw frm peratins is als recnciled t cash flws frm perating activities. The derivatin f adjusted cash prductin csts and adjusted depreciatin, depletin and amrtizatin are included in the Operating Highlights Oil Sands Mining and Upgrading sectin f the Cmpany's MD&A. The Cmpany als presents certain nn-gaap financial ratis and their derivatin in the Liquidity and Capital Resurces sectin f the Cmpany's MD&A. A Barrel f Oil Equivalent ( BOE ) is derived by cnverting six thusand cubic feet ( Mcf ) f natural gas t ne barrel ( bbl ) f crude il (6 Mcf:1 bbl). This cnversin may be misleading, particularly if used in islatin, since the 6 Mcf:1 bbl rati is based n an energy equivalency cnversin methd primarily applicable at the burner tip and des nt represent a value equivalency at the wellhead. In cmparing the value rati using current crude il prices relative t natural gas prices, the 6 Mcf:1 bbl cnversin rati may be misleading as an indicatin f value. In additin, fr the purpses f the Cmpany's MD&A, crude il is defined t include the fllwing cmmdities: light and medium crude il, primary heavy crude il, Pelican Lake heavy crude il, bitumen (thermal il), and SCO. Canadian Natural Resurces Limited 5 Press Release

6 Prductin vlumes and per unit statistics are presented thrughut this release n a befre ryalty r grss basis, and realized prices are net f blending csts and exclude the effect f risk management activities. Prductin n an after ryalty r net basis is als presented fr infrmatin purpses nly in the Cmpany's MD&A. Frward Lking Statements Certain statements relating t Canadian Natural Resurces Limited (the Cmpany ) in this dcument r dcuments incrprated herein by reference cnstitute frward-lking statements r infrmatin (cllectively referred t herein as frward-lking statements ) within the meaning f applicable securities legislatin. Frward-lking statements can be identified by the wrds believe, anticipate, expect, plan, estimate, target, cntinue, culd, intend, may, ptential, predict, shuld, will, bjective, prject, frecast, gal, guidance, utlk, effrt, seeks, schedule, prpsed r expressins f a similar nature suggesting future utcme r statements regarding an utlk. Disclsure related t expected future cmmdity pricing, frecast r anticipated prductin vlumes, ryalties, perating csts, capital expenditures, incme tax expenses and ther guidance prvided thrughut the Cmpany's Management s Discussin and Analysis ( MD&A ), cnstitute frward-lking statements. Disclsure f plans relating t and expected results f existing and future develpments, including but nt limited t the Hrizn Oil Sands peratins and future expansins, the Athabasca Oil Sands Prject ("AOSP"), Primrse thermal prjects, Pelican Lake water and plymer fld prject, the Kirby Thermal Oil Sands Prject, the cnstructin and future peratins f the Nrth West Redwater bitumen upgrader and refinery, and cnstructin by third parties f new r expansin f existing pipeline capacity r ther means f transprtatin f bitumen, crude il, natural gas r synthetic crude il ( SCO ) that the Cmpany may be reliant upn t transprt its prducts t market als cnstitute frwardlking statements. This frward-lking infrmatin is based n annual budgets and multi-year frecasts, and is reviewed and revised thrughut the year as necessary in the cntext f targeted financial ratis, prject returns, prduct pricing expectatins and balance in prject risk and time hrizns. These statements are nt guarantees f future perfrmance and are subject t certain risks. The reader shuld nt place undue reliance n these frwardlking statements as there can be n assurances that the plans, initiatives r expectatins upn which they are based will ccur. In additin, statements relating t reserves are deemed t be frward-lking statements as they invlve the implied assessment based n certain estimates and assumptins that the reserves described can be prfitably prduced in the future. There are numerus uncertainties inherent in estimating quantities f prved and prved plus prbable crude il, natural gas and natural gas liquids ( NGLs ) reserves and in prjecting future rates f prductin and the timing f develpment expenditures. The ttal amunt r timing f actual future prductin may vary significantly frm reserve and prductin estimates. The frward-lking statements are based n current expectatins, estimates and prjectins abut the Cmpany and the industry in which the Cmpany perates, which speak nly as f the date such statements were made r as f the date f the reprt r dcument in which they are cntained, and are subject t knwn and unknwn risks and uncertainties that culd cause the actual results, perfrmance r achievements f the Cmpany t be materially different frm any future results, perfrmance r achievements expressed r implied by such frward-lking statements. Such risks and uncertainties include, amng thers: general ecnmic and business cnditins which will, amng ther things, impact demand fr and market prices f the Cmpany s prducts; vlatility f and assumptins regarding crude il and natural gas prices; fluctuatins in currency and interest rates; assumptins n which the Cmpany s current guidance is based; ecnmic cnditins in the cuntries and regins in which the Cmpany cnducts business; plitical uncertainty, including actins f r against terrrists, insurgent grups r ther cnflict including cnflict between states; industry capacity; ability f the Cmpany t implement its business strategy, including explratin and develpment activities; impact f cmpetitin; the Cmpany s defense f lawsuits; availability and cst f seismic, drilling and ther equipment; ability f the Cmpany and its subsidiaries t cmplete capital prgrams; the Cmpany s and its subsidiaries ability t secure adequate transprtatin fr its prducts; unexpected disruptins r delays in the resumptin f the mining, extracting r upgrading f the Cmpany s bitumen prducts; ptential delays r changes in plans with respect t explratin r develpment prjects r capital expenditures; ability f the Cmpany t attract the necessary labur required t build its thermal and il sands mining prjects; perating hazards and ther difficulties inherent in the explratin fr and prductin and sale f crude il and natural gas and in mining, extracting r upgrading the Cmpany s bitumen prducts; availability and cst f financing; the Cmpany s and its subsidiaries success f explratin and develpment activities and its ability t replace and expand crude il and natural gas reserves; timing and success f integrating the business and peratins f acquired cmpanies and assets, including the interests in the AOSP as well as additinal wrking interests in certain ther prducing and nn-prducing il and gas prperties (the "ther assets"), acquired by the Cmpany n May 31, 2017; prductin levels; imprecisin f reserve estimates and estimates f recverable quantities f crude il, natural gas and NGLs nt currently classified as prved; actins by gvernmental authrities; gvernment regulatins and the expenditures required t cmply with them (especially safety and envirnmental laws and regulatins and the Canadian Natural Resurces Limited 6 Press Release

7 impact f climate change initiatives n capital and perating csts); asset retirement bligatins; the adequacy f the Cmpany s prvisin fr taxes; and ther circumstances affecting revenues and expenses. The Cmpany s peratins have been, and in the future may be, affected by plitical develpments and by federal, prvincial and lcal laws and regulatins such as restrictins n prductin, changes in taxes, ryalties and ther amunts payable t gvernments r gvernmental agencies, price r gathering rate cntrls and envirnmental prtectin regulatins. Shuld ne r mre f these risks r uncertainties materialize, r shuld any f the Cmpany s assumptins prve incrrect, actual results may vary in material respects frm thse prjected in the frward-lking statements. The impact f any ne factr n a particular frward-lking statement is nt determinable with certainty as such factrs are dependent upn ther factrs, and the Cmpany s curse f actin wuld depend upn its assessment f the future cnsidering all infrmatin then available. Readers are cautined that the freging list f factrs is nt exhaustive. Unpredictable r unknwn factrs nt discussed in this reprt culd als have material adverse effects n frward-lking statements. Althugh the Cmpany believes that the expectatins cnveyed by the frward-lking statements are reasnable based n infrmatin available t it n the date such frward-lking statements are made, n assurances can be given as t future results, levels f activity and achievements. All subsequent frward-lking statements, whether written r ral, attributable t the Cmpany r persns acting n its behalf are expressly qualified in their entirety by these cautinary statements. Except as required by law, the Cmpany assumes n bligatin t update frward-lking statements, whether as a result f new infrmatin, future events r ther factrs, r the freging factrs affecting this infrmatin, shuld circumstances r Management s estimates r pinins change. Canadian Natural Resurces Limited 7 Press Release

8 WEBCAST This 2018 budget release is accmpanied by a webcast, where the cmpany will discuss its strategy fr creating sharehlder value as well as its plans fr 2018 and beynd. The webcast and can be accessed n Canadian Natural's website at Presentatin slides will be available n Canadian Natural's website in PDF frmat shrtly befre the live cnference call webcast at 9am Eastern Time. Fr further infrmatin, please cntact: CANADIAN NATURAL RESOURCES LIMITED 2100, 855-2nd Street S.W. Calgary, Alberta T2P 4J8 Telephne: (403) Facsimile: (403) ir@cnrl.cm Website: Trading Symbl CNQ Trnt Stck Exchange New Yrk Stck Exchange STEVE W. LAUT President COREY B. BIEBER Chief Financial Officer and Senir Vice-President, Finance MARK A. STAINTHORPE Directr, Treasury and Investr Relatins Canadian Natural Resurces Limited 8 Press Release