Calgary’s largest heavy oil and natural gas producer, Canadian Natural Resources (CNR), has revealed that it plans to cut spending to $4.3bn through 2018, whilst also aiming to increase production to the equivalent of over 1mn barrels of oil per day.
“The strength of the Company is reflected in the 2018 budget as we target overall production between 1,090,000 and 1,170,000 barrels of oil equivalent per day,” said CEO of CNR, Steve Laut. “This represents a 17% increase over 2017 production levels with a capital program targeted at $4.3 billion.”
The drop to $4.3bn will be a cut of approximately $500mn from its estimated 2017 budget, with company stating that it would be able to cut costs to as low as $3bn if necessary, with oil prices continuing to slump.
“In 2018, the Company targets to continue to strengthen our balance sheet metrics with increasing free cash flow,” said CNR’s Chief Financial Officer, Corey Bieber. “Ample liquidity and significant capital flexibility in 2018 will allow the Company to effectively manage our financial position in a volatile commodity price environment.”
CNR firm estimates that it will have approximately $8.1bn in funds flow from its operations, with $2.5bn of this generated as free cash flow after dividends, based on benchmark oil and gas prices.