Analyst Note| Joe Gemino, CPA |
Canadian Natural Resources' fourth-quarter results exceeded our expectations, again. The company reported fourth-quarter adjusted operating cash flow of CAD 1.71 billion, which was down slightly on a sequential basis. The lower cash flow was a result of lower netbacks on the company’s liquids production, excluding the oil sands mining and upgrading segment, despite higher production levels. Corporate operating netbacks averaged CAD 16.37 per barrel compared with CAD 16.91 in the third quarter. Operating costs increased among the bitumen, heavy oil, and North Sea production, leading to the lower netbacks. Despite the slightly lower sequential operating cash flow, Canadian Natural still generated CAD 694 in free cash flow after adjusting for the Painted Pony acquisition costs and reduced net debt by CAD 432 from the third quarter.