Canadian Natural cuts 2012 spending, share price up more than six per cent

CALGARY – Shares in Canadian Natural Resources Ltd. rose more than six per cent on Thursday after the major energy producer said it was chopping this year’s spending.

The stock was up $1.84 at $31.41 in mid-morning trading on the Toronto Stock Exchange.

The Calgary-based company said overall capital spending for the year was being reduced some $680 million, or about 10 per cent, to $6.7 billion.

Most of the cuts are taking place in Canadian Natural’s (TSX:CNQ) Horizon oilsands expansion and in North American natural gas, which has been battered by low commodity prices lately.

Canadian Natural expects to produce between 454,000 and 474,000 barrels per day of crude oil and natural gas liquids in 2012. During the first quarter, the company had set out a wider range of between 440,000 and 480,000 barrels per day.

In the previous quarter, Canadian Natural also forecast natural gas production of between 1.22 billion and 1.26 billion cubic feet per day, but now the top end of the range has been lowered to 1.24 billion as the company redirects more of its money toward more lucrative heavy oil developments.

Also Thursday, Canadian Natural reported net income of $753 million, or 68 cents per share, down from $929 million, or 84 cents per share, in the same period last year.

Adjusted earnings for the quarter were $606 million compared with $621 million in the same period last year.

Adjusted earnings per share fell to 55 cents from 57 cents in the same quarter in 2011. That beat the 53 cents per share analysts polled by Thomson Reuters had been expecting.

Revenues were $3.8 billion, down from $7.4 billion.

Cash flow for the quarter rose to $1.75 billion from $1.55 billion.

Canadian Natural also declared a quarterly cash dividendof 10.5 cents per common share. The dividend will be payable on Oct. 1 to shareholders of record at the close of business on Sept. 14.

Canadian Natural is one of Canada’s biggest oil and natural gas producers, with the bulk of its operations in Western Canada.