CNR cuts capital spending by $2.4 billion (Can.)

In response to lower oil prices, Canadian Natural Resources Ltd., Calgary, plans to cut 2015 capital spending to $6.2 billion (Can.) from its original budget of $8.6 billion (Can.).

The revised budget targets 7% production growth; the original budget in November targeted 11% production growth.

CNRL said the spending reductions are primarily aimed at drilling and facility capital for conventional operations in Canada, the UK North Sea, and offshore Africa. The company will also defer $470 million (Can.) at the Kirby North Phase 1 thermal in-situ project “until such time as commodity prices stabilize at levels that justify such capital expenditures.”

Its revised production targets for 2015 are 1,730-1,770 MMcfd of natural gas and 552,000-592,000 b/d of liquids, before royalties. CNRL said its dividend level is sustainable in the current environment.

The company’s Horizon Oil Sands expansion project remains “on track” to add 45,000 b/d of production capacity in late 2016 and 80,000 b/d in late 2017 (OGJ Online, Oct. 18, 2013). When completed, Horizon will have 250,000 b/d production capacity of light, sweet synthetic crude oil.

Horizon production in fourth quarter 2014 averaged 128,200 b/d, with December averaging 136,000 b/d—a new production record. Horizon’s 2015 capital budget is “largely intact” at $2.2 billion.