Pipelines at Canadian Natural Resources Limited's Primrose Lake oil sands project near Cold Lake, Alta., on Aug. 8, 2013.Dan Riedlhuber/Reuters
Canadian Natural Resources CNQ-T beat second-quarter profit estimates on Thursday thanks to higher oil prices and rising output, but is planning to delay completion of some new natural gas wells due to a weak market.
The Calgary, Alberta-based company’s second-quarter net income rose 17% to C$1.72 billion ($1.24 billion) from a year earlier.
Crude prices traded higher in the April-June quarter on escalating tensions in the Middle East, an OPEC+ production cut extension and expectations of interest rate cuts from the U.S. Federal Reserve.
Canadian Natural, the country’s largest oil and gas producer, grew average production by 8% versus the same quarter a year earlier to 1.29 million barrels of oil equivalent per day (boepd) in the quarter.
The company also said it would slow some natural gas production until prices strengthen, which it anticipates will be early next year as the impending start-up of the Shell-led LNG Canada export projects increases demand.
“There’ll be about 20 wells out of a total of 40 that we’re going to basically drill, complete, but not put on production until we see those prices improve,” Canadian Natural’s President Scott Stauth told an earnings call.
The company has not changed its 2024 natural gas production guidance of 2.12-2.23 billion cubic feet a day.
North American natural gas prices have slumped due to very high inventories following a mild winter.
Canadian Natural posted adjusted net earnings from operations of 88 Canadian cents per share for the three months ended June 30, compared with analysts’ average estimate of 81 Canadian cents per share, according to LSEG data.