Canadian Natural Resources (CNQ) Status Update summary

Strategic Overview and Asset Strength

• Maintains a diversified, long-life, low-decline asset base with a focus on disciplined capital allocation, continuous improvement, and operational efficiency.

• Four capital allocation pillars: balance sheet strength, shareholder returns, resource value growth, and opportunistic acquisitions, all aimed at maximizing long-term value.

• Holds the second largest reserves among global peers and the largest crude oil and natural gas reserves in Canada, with a 33-year reserve life index and a high proportion of valuable SCO, light crude, and NGLs.

• Product mix for 2025 targets 47% high-value liquids, 26% heavy oil, and 27% natural gas, reducing exposure to any single commodity.

• Marketing strategy includes diversified sales channels and significant export volumes to capture strong pricing and reduce egress constraints.

2025 Budget, Production, and Capital Allocation

• 2025 capital budget is set at $6.15 billion, with $3.2 billion for conventional E&P and $2.815 billion for thermal/oil sands mining.

• CAD 90 million allocated to carbon capture projects, mainly for Pathways and related engineering work.

• Production guidance for 2025 is 1,510–1,555 MBOE/d, up 12% from 2024, with 2,425–2,480 MMcf/d gas and 1,106–1,142 Mbbl/d liquids.

• Drilling program includes 361 net wells across key plays, with a focus on capital efficiency and drill-to-fill opportunities.

• Horizon project shifts to biennial maintenance, eliminating 2025 turnaround and saving $75 million, with debottlenecking and reliability enhancements completed.

Financial Strength, Shareholder Returns, and Acquisitions

• Strong free cash flow generation supports increasing dividends and share buybacks, with 25 consecutive years of dividend growth at a 21% CAGR.

• Free cash flow allocation policy: 60–100% to shareholder returns depending on net debt level, with net debt at $9.3 billion as of September 30, 2024.

• Free cash flow remains robust across a range of commodity prices due to high-quality assets and cost discipline.

• Maintenance capital is in the $8–$9/BOE range, with growth capital and acquisition costs included in the 2025 budget.

• 2025 budget includes capital for acquisitions closing in Q1/25, subject to regulatory approvals.