Canadian oil sands producers as a group smashed profit records in 2023 after Canadian Natural Resources Limited (CNRL) posted its own eye-popping quarterly and annual financial results..The Calgary-based company saw full-year net earnings rise to $12.86 billion or $11.33 per share compared to $7.42 million or $6.28 a share in 2021. The company was the last of Alberta’s domestic oil sands producers to report financials..All told, Canada’s five largest oil sands producers — Suncor Energy, Imperial Oil, Cenovus, and MEG — raked in a combined $36.62 billion in 2023, largely on the back of higher oil prices stemming from Russia’s invasion of Ukraine. .Don’t expect it to last however; all five members of the Pathways Alliance are facing a real wall to slash emissions some 40% by 2030. And though they have warned that the timelines are too short, profit numbers like these aren’t gaining much sympathy in Ottawa..Pathways, in partnership with its member companies, is proposing $16.5-billion carbon capture and storage network from more than 20 oil sands facilities near Fort McMurray where it will be transported 400 kilometres by pipeline to a terminal in the Cold Lake area and stored underground. Critics say it isn’t enough and will need government subsidies and handouts to be economically viable. .In an interview with the Toronto Star, federal environment minister Steven Guilbeault complained oil companies weren’t spending enough money to reduce emissions despite windfall profits. In it, he made thinly veiled threats of even more punitive government policy actions to come: “We haven’t forced them to do it, and we’re going to force them to do it.”.Nonetheless CNRL said it remains committed to achieving net zero by 2050 and 40% reductions by 2035, not 2030. “It is important we work together with both federal and provincial governments to achieve climate goals, in an economically feasible manner,” said CEO Tim McKay. .Although CNRL’s annual numbers were up, quarterly results were lower at $1.5 billion or $1.37 per share compared to $2.5 billion or $2.16 a share in the further quarter of 2021. That missed Reuters’ analyst expectations of $2.27 per share..The company blamed equipment outages and bitterly cold weather in December for the miss — oil sands plants don’t operate well at -40C below — and warned the impacts could linger into Q1 numbers as well..Nonetheless, CNRL approved a 6% dividend hike, to 90 cents a share, and cut its net debt by half, or more than $10 billion. The company said it paid approximately $10.3 billion to Canadian governments in the form of income taxes, property taxes and royalties in 2022, an increase of approximately $5.3 billion, or 107%, from 2021 levels..All told, the company produced a staggering 1.29 million barrels of oil equivalent per day (boe/d) in 2021, including 430,000 barrels per day of synthetic crude from its Horizon oil sands mine and two billion cubic feet per day of natural gas. In addition, total proved reserves increased by 6% to 13.587 billion boe, replacing 2022 production by 265%, and representing a 32-year reserve life index. .The company touted itself an industry leader in abandonment and reclamation of old and inactive wells. “We have abandoned more than 3,000 wells per year in each of the last two years. At this pace, we would be able to achieve 100% abandonment of our current inventory of inactive wells in approximately 10 years,” said McKay..Investors were mostly ambivalent to the quarterly earnings hit; CNRL shares (CNQ:TSE) were down a modest four bits to $79.69 on Friday but are well up from about $70 at the start of the year.
Canadian oil sands producers as a group smashed profit records in 2023 after Canadian Natural Resources Limited (CNRL) posted its own eye-popping quarterly and annual financial results..The Calgary-based company saw full-year net earnings rise to $12.86 billion or $11.33 per share compared to $7.42 million or $6.28 a share in 2021. The company was the last of Alberta’s domestic oil sands producers to report financials..All told, Canada’s five largest oil sands producers — Suncor Energy, Imperial Oil, Cenovus, and MEG — raked in a combined $36.62 billion in 2023, largely on the back of higher oil prices stemming from Russia’s invasion of Ukraine. .Don’t expect it to last however; all five members of the Pathways Alliance are facing a real wall to slash emissions some 40% by 2030. And though they have warned that the timelines are too short, profit numbers like these aren’t gaining much sympathy in Ottawa..Pathways, in partnership with its member companies, is proposing $16.5-billion carbon capture and storage network from more than 20 oil sands facilities near Fort McMurray where it will be transported 400 kilometres by pipeline to a terminal in the Cold Lake area and stored underground. Critics say it isn’t enough and will need government subsidies and handouts to be economically viable. .In an interview with the Toronto Star, federal environment minister Steven Guilbeault complained oil companies weren’t spending enough money to reduce emissions despite windfall profits. In it, he made thinly veiled threats of even more punitive government policy actions to come: “We haven’t forced them to do it, and we’re going to force them to do it.”.Nonetheless CNRL said it remains committed to achieving net zero by 2050 and 40% reductions by 2035, not 2030. “It is important we work together with both federal and provincial governments to achieve climate goals, in an economically feasible manner,” said CEO Tim McKay. .Although CNRL’s annual numbers were up, quarterly results were lower at $1.5 billion or $1.37 per share compared to $2.5 billion or $2.16 a share in the further quarter of 2021. That missed Reuters’ analyst expectations of $2.27 per share..The company blamed equipment outages and bitterly cold weather in December for the miss — oil sands plants don’t operate well at -40C below — and warned the impacts could linger into Q1 numbers as well..Nonetheless, CNRL approved a 6% dividend hike, to 90 cents a share, and cut its net debt by half, or more than $10 billion. The company said it paid approximately $10.3 billion to Canadian governments in the form of income taxes, property taxes and royalties in 2022, an increase of approximately $5.3 billion, or 107%, from 2021 levels..All told, the company produced a staggering 1.29 million barrels of oil equivalent per day (boe/d) in 2021, including 430,000 barrels per day of synthetic crude from its Horizon oil sands mine and two billion cubic feet per day of natural gas. In addition, total proved reserves increased by 6% to 13.587 billion boe, replacing 2022 production by 265%, and representing a 32-year reserve life index. .The company touted itself an industry leader in abandonment and reclamation of old and inactive wells. “We have abandoned more than 3,000 wells per year in each of the last two years. At this pace, we would be able to achieve 100% abandonment of our current inventory of inactive wells in approximately 10 years,” said McKay..Investors were mostly ambivalent to the quarterly earnings hit; CNRL shares (CNQ:TSE) were down a modest four bits to $79.69 on Friday but are well up from about $70 at the start of the year.
