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Canadian Natural Resources Ltd CNQ
Q4 2012 Earnings Call Transcript

Transcript Call Date 03/07/2013

Operator: Good morning, ladies and gentlemen. Welcome to the Canadian Natural Resources 2012 Fourth Quarter and Year-End Conference Call.

I would now like to turn the meeting over to Mr. John Langille, Vice Chairman of Canadian Natural Resources. Please go ahead, Mr. Langille.

John G. Langille - Vice Chairman: Thank you very much, operator, and good morning, everyone. Thank you for attending this conference call where we will discuss our 2012 fourth quarter results, review our planned activities for 2013 and in some cases beyond. Participating with me today will be Steve Laut, our President; Doug Proll, our Chief Financial Officer; and Lyle Stevens, our Senior Vice President overseeing reserves.

Before we start, I would refer you to the comments regarding forward-looking information contained in our press release and also note that all dollar amounts are in Canadian dollars and production and reserves are both expressed as before royalties, unless otherwise stated. I'd like to make some initial comments before I turn the call over to Steve Lyle and Doug for their in-depth discussion.

In 2012, our balance producing asset base continued to achieve significant cash flow of over $6 billion. We followed our disciplined balanced approach of allocating the disbursement of this cash flow in the following manners. We cost effectively continued to develop our large resource potential which resulted in growth of our 2P reserves to 7.9 billion barrels of oil equivalent, replacing 276% of our production with 95% of that addition being oil reserve.

We maintained our strong balance sheet and debt metrics. We returned funds to our shareholders through dividends, which increased 17% in 2012, followed up by a further 19% for this year, and we returned to our shareholders through share repurchases of over 11 million shares at an average price of $28.91 in 2012 and firm plans to continue a similar type of program depending on market conditions throughout 2013.

And 2013 has started out a strong operating results. Our production rates are all holding within our guidance, with particular emphasis in the first two months of 2013 on high production in our cyclic steaming Primrose thermal operations during this current production cycle continuing increased production from primary heavy oil and daily average SCO production from our horizon mining operations of over 110,000 barrels per day.

With that, I will now hand the meeting over to Steve.

Steve W. Laut - President: Thanks John, and good morning everyone. This morning most of my comments will be forward looking along with touching briefly on our strategy and highlighting each of our assets. There are five key points that you should listen for as we go through the talk this morning. First, our view on heavy oil differentials and market access, Horizon reliability, Kirby development update, our year-end reserves and the monetization of the portion of our Montney asset base, our land base.

As you know Canadian Natural has and will continue to build a premium value, define growth independent, we're one of the few companies in our peer group that has the assets that deliver free cash flow on a sustainable basis, a direct result of our ability to effectively execute our strategies.

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