Canadian Natural Resources Profit Rises on Oil Price

By Joe Carroll

Nov. 6 (Bloomberg) -- Canadian Natural Resources Ltd., which is leading a C$9.7 billion ($8.3 billion) project to expand output from Alberta's oil sands, said third-quarter profit rose after crude prices climbed to a record.

Net income increased to C$2.84 billion, or C$5.25 a share, from C$700 million, or C$1.30, a year earlier, the Calgary-based company said today in a statement. Excluding the effects of hedging, stock-based compensation and currency fluctuations, per-share profit was C$1.78, or 27 cents higher than the average estimate of 10 analysts surveyed by Bloomberg.

President Steve Laut expects to begin pumping crude from the Horizon Oil Sands Project in northern Alberta by the end of December, even after today announcing the third cost increase this year. Revenue jumped 45 percent to C$3.97 billion.

Oil futures jumped to an average of $118.22 a barrel from $75.15 a year earlier, the biggest third-quarter increase since the contracts began trading in New York in 1983.

Canadian Natural's gas, excluding hedging, sold for an average of C$8.82 per thousand cubic feet, up 50 percent from a year earlier. Gas production fell 9.5 percent to 1.49 billion cubic feet a day. Only EnCana Corp. of Calgary pumps more gas from Canadian fields.

Lower Output

Oil output fell 7.8 percent to 306,970 barrels a day, Canadian Natural said. Before hedging, the company' oil sold for an average of C$102.30 a barrel, up 76 percent from the third quarter of 2007.

Average oil output will peak at 318,000 barrels a day this year, down from an August estimate of 350,000 barrels, Canadian Natural said. Crude accounts for 57 percent of the company's output, which comes from wells in North America, the U.K. and Africa.

Laut, 51, said plunging commodity prices prompted the company to temporarily shelve two planned expansions at the Horizon project, where the cost estimate today rose by C$441 million, or 4.8 percent.

Spending next year on wells, mines and processing plants will fall to C$4 billion, down 47 percent from the estimated 2008 budget, Canadian Natural said.

Crude futures traded in New York plunged 56 percent in the past 17 weeks from a record $147.27 a barrel as economic growth slowed in the world's biggest energy-consuming nations, curbing demand.

Canadian Natural fell 4 percent to C$58 at 8:04 a.m. in Toronto before the start of regular North American trading. The shares have dropped 17 percent this year, headed for their biggest annual decline since 1998.

(Canadian Natural will hold a conference call at 9 a.m. New York time, accessible on the company's Web site at http://www.cnrl.com)

To contact the reporters on this story: Joe Carroll in Chicago at jcarroll8@bloomberg.net