Calgary-based energy giant Canadian Natural Resources Limited is slashing its 2020 capital spending budget by just over $1 billion.
The company announced Wednesday the move is being made with the continued volatility in commodity pricing.
Capital spending has been reduced to $2.96 billion this year.
“Notwithstanding this spending reduction, there is no change to our 2020 corporate production guidance volumes of 1,137,000 – 1,207,000 BOE/d; originally issued on December 4, 2019. Canadian Natural’s long life low decline asset base and its associated low annual sustaining capital of approximately $3 billion, coupled with the ramp up of production volumes at Kirby North, Primrose and Jackfish production, all where capital for these projects was largely incurred in 2019 and before, results in similar targeted production levels in 2021 and 2022,” it said.
Canadian Natural said it is well positioned through the current global COVID-19 challenges, due to its significant long life low decline asset base that has 27.8 years of reserve life based on proved reserves and 36 years of reserve life based on proved plus probable reserves.
“Of the proved reserves, 83 per cent is derived from long life low decline assets and 77 per cent of budgeted 2020 liquids production is from the same type of long life low decline assets. Importantly, Canadian Natural’s Oil Sands Mining and Upgrading assets have a reserve life in excess of 43 years. These Oil Sands Mining and Upgrading assets have a production capability in the range of 430,000 – 475,000 bbl/d of Synthetic Crude Oil, with operating costs of approximately US$13/bbl,” said CNRL.
“These assets currently make up approximately 45 per cent of our liquids production and continue to generate substantial free cash flow at current commodity price levels.”
