Canadian Natural Resources NYSE: CNQ plans to increase share repurchases after reaching its net debt target ahead of schedule, while an early completion of maintenance at its Horizon oil sands facility is expected to lift fourth-quarter production.
The company reported third-quarter adjusted funds flow of approximately C$5.5 billion, or C$2.68 per share, and adjusted net earnings of C$3.4 billion, or C$1.67 per share. Production averaged approximately 1.65 million barrels of oil equivalent per day, up about 31,000 barrels per day from a year earlier despite a planned turnaround at Horizon.
President Scott Stauth said on the company’s Nov. 5 earnings call that the Horizon turnaround was completed after the quarter ended in 28 days, seven days ahead of schedule. The early completion is expected to add approximately 23,000 barrels per day of high-margin synthetic crude oil production in the fourth quarter.
Debt target brings higher buybacks
Canadian Natural ended the quarter with approximately C$12.1 billion in net debt, below its C$13 billion target. CFO Victor Darel said reaching the threshold advances share buybacks to 100% of free cash flow under the company’s policy.
The company is targeting C$800 million in share purchases in each of November and December. Asked whether investors should assume that monthly rate would continue, Darel said it was not a trial and that the company expected to maintain a similar pace if free cash flow remained strong.
“I expect it to continue at this rate until we see changes in commodity pricing,” Darel said, adding that the company would communicate any necessary change.
In the first nine months of 2026, Canadian Natural returned approximately C$6.8 billion directly to shareholders through dividends and buybacks and reduced net debt by C$3.8 billion, Darel said. He also said the board approved a quarterly dividend of C$0.625 per common share, payable Jan. 5, 2027, to shareholders of record on Dec. 15, 2026.
Strong sulphur prices contributed approximately C$500 million of pretax net revenue in the quarter and C$900 million for the year to date, according to Darel. Synthetic crude oil prices averaged a premium of $6.65 per barrel to West Texas Intermediate during the quarter, which he attributed to strong diesel pricing.
Horizon maintenance intervals extended
Canadian Natural is extending the interval between planned Horizon turnarounds to three years from two, following reliability work completed in 2024 and inspections during this year’s maintenance. Stauth said the change increases average production capacity by approximately 5,000 barrels per day of synthetic crude over the three-year cycle.
The earlier reliability project improved equipment in the primary upgrading unit and enabled some secondary units to undergo minor maintenance without affecting production, Stauth said. Inspections during the 2026 turnaround confirmed the company’s expectations from its online equipment monitoring, giving it confidence to extend the interval.
Stauth said a further extension to four or potentially five years was possible, but the company would assess equipment conditions during the next turnaround in 2029 before taking another step.
Production records and pipeline outlook
Thermal in situ production reached a quarterly record of approximately 300,000 barrels per day, up 9% from a year earlier. That included record production of approximately 143,000 barrels per day at Jackfish, about 23,000 barrels above the facility’s nameplate capacity.
North American conventional exploration and production, excluding thermal in situ operations, also posted record quarterly liquids production of approximately 358,000 barrels per day, up about 16% year over year. Stauth credited recent acquisitions, drilling results and the company’s development program.
During the question-and-answer session, Stauth said increased Venezuelan production and high shipping rates were among the factors contributing to a wider Western Canadian Select differential. He said the pipeline system was close to full, but not completely full, and that an expansion on the Trans Mountain system was beginning to add 90,000 barrels per day of capacity.
On a potential memorandum of understanding involving industry, Alberta and the federal government, Stauth said the priority should be achieving the parties’ desired outcomes rather than focusing on a particular completion date.
About Canadian Natural Resources (NYSE:CNQ)
Canadian Natural Resources Limited is an independent energy company engaged in the exploration, development, production and marketing of crude oil, natural gas and natural gas liquids. Its operations span several resource types and production methods, including oil sands mining and upgrading, thermal in situ projects, conventional oil and gas production, and offshore assets.
The company's principal operating areas are in Western Canada, the United Kingdom's North Sea and offshore Africa.
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