06_corp-summary-oh-2011_pdf

8/3/2019 06_corp-summary-oh-2011_pdf

1/8

1

Investor Open House 2011Corporate Summary

May 201

THE PREMIUM VALUE DEFINED GROWTH INDEPENDENT

Corporate Summary

Investor Open HouseMay 2011


2/8

2


May 201

CNQSlide 3

Certain statements in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectivelyCertain statements relating to the Company in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectively referred to herein as forward-looking statements) within the meaning of applicable securities legislation. Forward-lookingstatements can be identified by the words believe, anticipate, expect, plan, estimate, target, continue, could intend, may, potential, predict,should, will, objective, project, forecast, goal, guidance, outlook, effort seeks, schedule or expressions of a similar nature suggesting futureoutcome or statements regarding an outlook. Disclosure related to expected future commodity pricing, production volumes, royalties, operating costs, capitalexpenditures, and other guidance provided in the 2010 outlook section and throughout this document and the documents incorporated herein by referenceconstitute forward looking statements. Disclosure of plans relating to existing and future developments including but not limited to Horizon, Primrose East,Pelican Lake, Olowi Field (Offshore Gabon), and the Kirby Thermal Oil Sands Project also constitute forward-looking statements. This forward-lookinginformation is based on annual budgets and multi-year forecasts and is reviewed and revised throughout the year if necessary in the context of targetedfinancial ratios, project returns, product pricing expectations and balance in project risk and time horizons. These statements are not guarantees of futureperformance and are subject to certain risks. The reader should not place undue reliance on these forward looking statements as there can be noassurances that the plans, initiatives or expectations upon which they are based will occur.

In addition, statements relating to reserves are deemed to be forward-looking statements as they involve the implied assessment based on certainestimates and assumptions that the reserves described can be profitably produced in the future. There are numerous uncertainties inherent in estimatingquantities of proved crude oil and natural gas reserves and in projecting future rates of production and the timing of development expenditures. The totalamount or timing of actual future production may vary significantly from r eserve and production estimates.

The forward-looking statements are based on current expectations, estimates and projections about the Company and the industry in which the Companyoperates, which speak only as of the date such statements were made or as of the date of the report or document in which they are contained and aresubject to known and unknown risks, uncertainties and other factors that could cause the actual results, performance or achievements of the Company to bematerially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such risks anduncertainties include, among others: general economic and business conditions which will, among other things, impact demand for and market prices of theCompanys products; volatility of and assumptions regarding crude oil and natural gas prices; fluctuations in currency and interest rates; assumptions onwhich the Companys current guidance is based; economic conditions in the countries and regions in which the Company conducts business; politicaluncertainty, including actions of or against terrorists, insurgent groups or other conflict including conflict between states; industry capacity; ability of theCompany to implement its business strategy, including exploration and development activities; impact of competition; the Companys defense of lawsuits;availability and cost of seismic, drilling and other equipment; ability of the Company and its subsidiaries to complete it s capital programs; the Companys andits subsidiaries ability to secure adequate transportation for its products; unexpected difficulties in mining, extracting or upgrading the Companys bitumenproducts; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; ability of the Company to attractthe necessary labour required to build its thermal and oil sands mining projects; operating hazards and other difficulties inherent in the exploration for andproduction and sale of crude oil and natural gas; availability and cost of financing; the Companys and its subsidiaries success of exploration anddevelopment activities and their ability to replace and expand crude oil and natural gas reserves; timing and success of integrating the business andoperations of acquired companies; production levels; imprecision of reserve estimates and estimates of recoverable quantities of crude oil, bitumen, naturalgas and liquids not currently classified as proved; actions by governmental authorities; government regulations and the expenditures required to comply withthem (especially safety and environmental laws and regulations and the impact of climate change initiatives on capital and operating costs); asset retirementobligations; the adequacy of the Companys provision for taxes; and other circumstances affecting revenues and expenses. Certain of these factors arediscussed in more detail under the heading Risk Factors. The Companys operations have been, and at times in the future may be affected by politicaldevelopments and by federal, provincial and local laws and regulations such as restrictions on production, changes in taxes, royalties and other amountspayable to governments or governmental agencies, price or gathering rate controls and environmental protection regulations. Should one or more of theserisks or uncertainties materialize, or should any of the Companys assumptions prove incorrect, actual results may vary in material respects from thoseprojected in the forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as suchfactors are dependent upon other factors, and the Companys course of action would depend upon its assessment of the future considering all informationthen available.

Readers are cautioned that the foregoing list of important factors is not exhaustive. Unpredictable or unknown factors not discussed in this report could alsohave material adverse effects on forward-looking statements. Although the Company believes that the expectations conveyed by the forward-lookingstatements are reasonable based on information available to it on the date such forward-looking statements are made, no assurances can be given as tofuture results, levels of activity and achievements. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Except as required by law, the Company assumes noobligation to update forward-looking statements should circumstances or Managements estimates or opinions change.

Forward Looking StatementsForward Looking Statements

CNQSlide 4

Special Note Regarding Currency, Production and ReservesIn this document, all references to dollars refer to Canadian dollars unless otherwise stated. Production data is presented on a before royalties basis unlessotherwise stated. In addition, reference is made to oil and gas in common units called barrel of oil equivalent (boe). A boe is derived by converting sixthousand cubic feet of natural gas to one barrel of crude oil (6 mcf:1 bbl). This conversion may be misleading, particularly if used in isolation, since the6mcf:1bbl ratio is based on an energy equivalency at the burner t ip and does not r epresent the value equivalency at the well head.

ReservesFor the year ended December 31, 2010 the Company retained Independent Qualified Reserves Evaluators (Evaluators), Sproule Associates Limited andSproule International Limited (together as Sproule) and GLJ Petroleum Consultants Ltd. (GLJ), to evaluate and review all of the Companys proved andproved plus probable reserves with an effective date of December 31, 2010 and a preparation date of February 14, 2011. Sproule evaluated the NorthAmerica and International crude oil, NGL and natural gas reserves. GLJ evaluated the Horizon SCO reserves. The evaluation and review was conducted inaccordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (COGE Handbook) and disclosed in accordance with NationalInstrument 51-101 Standards of Disclosure for Oil and Gas Activities (NI 51-101) requirements. In previous years, Canadian Natural had been grantedan exemption order from the securities regulators in Canada that allowed substitution of U.S. Securities Exchange Commission (SEC) requirements for certain NI 51-101 reserves disclosures. This exemption expired on December 31, 2010. As a result, the 2010 reserves disclosure is presented inaccordance with Canadian reporting requirements using forecast prices and escalated costs. The recovery and reserves estimates of crude oil, NGL andnatural gas reserves provided in this presentation are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual crudeoil, NGL and natural gas reserves may be greater than or less than the estimates provided.

Reserves estimates provided in this presentation are company gross, before royalties.

Resources Other Than ReservesThe contingent resources other than reserves (resources) estimates provided in this presentation are internally evaluated by qualified reserves evaluatorsin accordance with the COGE Handbook as directed by NI 51-101. No independent third party evaluation or audit was completed. Resources provided arebest estimates as of December 31, 2010. The resources are evaluated using deterministic methods which represent the expected outcome with nooptimism or conservatism.

Resources, as per the COGE Handbook definition, are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from knowaccumulations using established technology or technology under development, but are not currently considered commercially viable due to one or morecontingencies. There is no certainty that it will be commercially viable to produce any portion of these resources.

Due to the inherent differences in standards and requirements employed in the evaluation of reserves and contingent resources, the total volumes of reserves or resources are not to be considered indicative of total volumes that may actually be recovered and are provided for illustrative purposes only.

Petroleum, bitumen or natural gas initially-in-place volumes provided are discovered resources which include: production, reserves, contingent resourcesand unrecoverable volumes.

Special Note Regarding non-GAAP Financial MeasuresManagement's discussion and analysis includes references to financial measures commonly used in the oil and gas industry, such as cash flow, cash flowper share and EBITDA (net earnings before interest, taxes, depreciation depletion and amortization, asset retirement obligation accretion, unrealized foreignexchange, stock-based compensation expense and unrealized risk management activity). These financial measures are not defined by generally acceptedaccounting principles (GAAP) and therefore are referred to as non-GAAP measures. The non-GAAP measures used by the Company may not becomparable to similar measures presented by other companies. The Company uses these non-GAAP measures to evaluate the performance of theCompany and of its business segments. The non-GAAP measures should not be considered an alternative to or more meaningful than net earnings, asdetermined in accordance with Canadian GAAP, as an indication of the Company's performance.

Volumes shown are Company share before royalties unless otherwise stated.

Reporting DisclosuresReporting Disclosures


3/8

3


May 201

CNQSlide 5

Why Invest inCanadian Naturals FutureWhy Invest inCanadian Naturals Future Strong, low-risk asset base

Includes world class oil sands in situ and mining developments

One of the largest producers of heavy crude oil in western Canada

Significant core unproved property position

Second largest producer of natural gas in western Canada

Balanced and large size reduces risk

Track record of value creation

Proven / committed management

Winning exploitation-based strategy

Defined plan for profitable growth

Focused on value creation

Consistent History of Value CreationConsistent History of Value Creation

CNQSlide 6

A History of Value CreationA History of Value Creation

Consistent GrowthConsistent Growth

$0

$2

$4

$6

$8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010$0

$20

$40

$60

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

0

2

4

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

2

4

6

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Pretax Net Asset Value Per Share*Cash Flow Per Share*

Daily Production Per 10,000 Shares(boe/d)

Gross Reserves Per Share*(boe)

Gas Oil Mining SCOGas Oil

*Refer to page 16 of the 2010 Canadian Natural Annual Report for a detailed description of notes. Per share values adjusted for 2004, 2005 and 2010 stock splits. Reserves include proved and probable. 2009 and 2010 oil reserves include Horizon SCO.

1 1 % C A G R 1 1 % C A G R

6 % C A G R 6 % C A G

R 1 6 % C A

G R 1 6 % C A G R

2 0 % C A G R 2 0 % C A G R


4/8

4


May 201

CNQSlide 7

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 110

100

200

300

400

500

600

700

Production Reserves

Consistent valuecreation throughsuccessful Exploitation

Exploration

Opportunisticacquisitions

100% of reservessubject toindependentevaluation

Production / Proved Reserves History(before royalties)

D ai l yP r o

d u c t i on

( MB

OE

/ d ) P

r o v e

d R e s e r v e s

( M M B O E )

Consistent Value CreationConsistent Value Creation

F o r e c a s

t

*Subject to the final impact of the January 2011 Horizon incident.Note: 2009 and 2010 includes Horizon SCO reserves. Reserves prior to2010 were calculated using constant prices and 2010 calculation based on escalating prices due to a change in disclosure requirements.

*

The Premium Value, Defined Growth IndependentThe Premium Value, Defined Growth Independent

CNQSlide 8

$227$172 $171

$76 $44 $36 $25 $11

$245

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2,200

2,400

CNQ EOG DV N PXD A PA A PC CV E N XY ECA TLM

Committed ManagementCommitted Management

Substantialmanagement anddirector wealthat stake Strong motivation for

management toperform

Delivers clear alignment withshareholder interests

Note: Peers based on share ownership data excluding options and priced at March 18, 2011.Source: SEDI and Thomson Financial.

Management / Directors Stock Ownership(US$ Million)

$2,263

Consistent History of Value CreationConsistent History of Value Creation


5/8

5


May 201

CNQSlide 9

Essential Elements to Our Defined PlanEssential Elements to Our Defined Plan

NA Oil

International

Horizon

Natural GasNatural Gas

A Growing, Returns - Focused E&PCreating Significant Value


1-2 years 3-5 years BeyondOptimize Potential for >8,000 potential

returns 3-5% CAGR drilling locations

Pelican / Primary Potential for >20 years of Primrose 5-7% CAGR development

Free cash flow High return Potential area for projects growth (acq)

Stabilize production Expansion and 14.3 Billion barrels

Re-profile expansions debottlenecking of bitumeninitially in place

CNQSlide 10

Delivering on Our Defined PlanDelivering on Our Defined Plan

NA Oil

Natural GasNatural Gas



Focus on resource plays with growth potential Septimus delivering

Significant heavy oil exposure delivering near term growth

Thermal assets deliver sustainable economic growthand free cash flow for decades

Leverage technological advancement on largeasset base

Exploit opportunities while providing light oilbalance and significant free cash flow

Expand up to 250,000 bbl/d without beingschedule driven

Cash flow provides significantshareholder value

International

Horizon


6/8

6


May 201

CNQSlide 11

Canadian Natural2011 Budget ProductionCanadian Natural2011 Budget Production

(1) Subject to the final i mpact of the January 2011 Horizon incident.

Production 2010 2011F % Change

Crude oil (Mbbl/d)

North America Light and NGLs 50 54-58 15%

Pelican Lake 38 38-42 6%

Heavy 93 103-107 13%

Thermal 90 95-103 9%

Total North America E&P crude oil 271 290-310 11%

International 63 48-56 (17%)

Horizon (1) 91 43-55 (46%)

Total crude oil (1) 425 381-421 (6%)

Natural gas (MMcf/d) 1,243 1,203-1,270 (1%)

BOE/d (1) 632 582-633 (4%)

CNQSlide 12

Capital ($ Million) 2010 2011F % ChangeNatural gas 697 750 8%Crude oil

Pelican Lake 468 531 13%Heavy 650 950 46%Thermal 555 1,315 137%Light

North America 289 544 88%North Sea 154 285 85%Offshore Africa 246 135 (45%)

Total crude oil 2,362 3,760 59%Horizon (1)

Sustaining and reclamation* 128 275 115%Capital Projects 319 715-820 124-157%Other 88 120 36%

Total Horizon (1) 535 1,110-1,215 107-127%Acquisition and Midstream 1,912 550 -Redwater Upgrader and Refining - 345 -Total (1) 5,506 6,515-6,620 18-20%

(1) Subject to the final i mpact of the January 2011 Horizon incident.*2011 includes turnaround capital.

Canadian Natural

2011 Budget Capital

Canadian Natural2011 Budget Capital


7/8

7


May 201

CNQSlide 13

Continued focus on oil development Well defined yet flexible plan Greater proportion of capital allocated to mid and long term

projects Thermal projects Light oil EOR projects Horizon Oil Sands expansion

Develop extensive natural gas resource plays Focus on Execution Excellence - operational, technical,

financial Preserve capital allocation flexibility

Significant free cash flow

Canadian NaturalGoing ForwardCanadian NaturalGoing Forward

CNQSlide 14

Canadian Natural

Free Cash Flow Uses

Canadian NaturalFree Cash Flow Uses

1) Opportunistic acquisitions2) Pre invest in long term developments

EOR Strat wells Strategic play development

3) Dividends Eleven consecutive years of dividend increases, 22% CAGR Must be sustainable

4) Pay down debt5) Share buybacks

Target to eliminate dilution

Prudent Use of Free Cash FlowPrudent Use of Free Cash Flow


8/8

8


May 201

CNQSlide 15

Canadian Natural AdvantageCanadian Natural Advantage

Management, business philosophy, practice Strong, balanced assets

Vast opportunities Balanced, proven, effective strategy Control over capital allocation Nimble

Capture opportunities Willingness to make tough decisions

Significant free cash flow Canadian Natural culture

Control of costs Execution focused Efficient operations

The Premium Value,Defined Growth Independent

The Premium Value,Defined Growth Independent

THE PREMIUM VALUE DEFINED GROWTH INDEPENDENT

Questions and Answers

-You can find PDF versions of this and other publications from Canadian Natural at: www.cnrl.com-Documents can be requested by calling our Investor Relations department at: 403-514-7777 or by emailing us at: [email protected]