The share price of Canadian Natural Resources (CNQ) surged after the company announced the strong financial results for the fourth quarter and the year ending 2020. The Canadian Natural Resources shares have added about 23.7% since the beginning of the year.
Business activity update
Despite the low demand for fuel during the pandemic in 2020, the CRM achieved record annual corporate BOE production levels of approximately 1,164 MBOE/d, which is an increase of 6% over 2019 levels. The company also had a low annual operating cost of $15.25/bbl of Synthetic Crude oil. The company had a significant cost reduction of $1.20bbl in 2020 at the North America Exploration and Productionliquid segment.
In 2020, the CNQ totalprived reserves grew by 10% to 12.106 billion BOE. The company was able to reduce the greenhouse gas emission intensity by 18% and methane emission by 28% in comparison with 2016 figures. The company’s total recordable injury frequency improved to 0.21 in 2020, a reduction of 58% from 2016 levels. The CNQ achieved a significant environmental milestone in 2020 by doing the cumulative sequestration of five million tonnes of CO2 and by the planting of two and a half million trees at our Oil Sands Mining.
CNQ financial highlights for Q4
The company had a net earningof $749 million and adjusted net earnings from operations of $176 million in Q4. Operational activities activated $1,270 million in fourth-quarter 2020. The company announced quarterly earnings of $0.12 per share.
CNQ annual financial highlights
CNQ suffered a net loss of $435 million and the company had an adjusted net loss from operations of $756 million in 2020. The CRM had a cash flow of $4,714 million in 2020 from its operating activities. The company had an annual free cash flow of $692 million. Canadian Natural generated a strong annual adjusted funds flow of $5,343 million in 2020 Canadian Natural generated $692 million in free cash flow in 2020, after dividend payments of $1,950 million and net capital expenditures of $2,701 million. The company reduced the absolute net debt by over $1.5 billion from June 30 2020 levels including Painted Pony acquisition costs. the Company had undrawn revolving bank credit facilities of approximately $5.0 billion. The dividends increased by 13% from the 2019 level and remain $1.70 per share. At the end of the year, the company will pay a quarterly dividend of $0.47 per share on April 5 2021.
The CNQ 2021 financial forecast
The company is expecting $4.9 billion in free cash flow in 2021. The company is targeting a capital program of $3.2 billion, provides a targeted production range of 1,190 MBOE/d to 1,260 MBOE/d.