CNR Income Sinks On Devon Deal
Canada’s leading oil and gas producer Canadian Natural Resources (CNR) has registered an 18.5% decline in second quarter income as a result of higher costs and weaker prices.
Adjusted net earnings from operations sank in April through June to C$1.04bn ($785mn) from C$1.28bn a year before, CNR reported on August 1. Capital spending ballooned to C$4.13bn from C$974mn, largely relating to CNR’s C$3.8bn purchase of US-based Devon Energy’s Canadian assets earlier this year. Excluding the takeover, capex fell from $974mn to $903mn.
Income was also affected by lower oil prices, which more than offset the impact of a gas price improvement. Compounding this, production fell 2.3% to 1.03mn boe/day, with liquids down 2.9% at 770,400 b/day and gas falling 0.5% to 1.53bn ft3/day. However, CNR's cash flow from operating activities saw growth, from C$2.61bn to C$2.86bn.
In its results report, CNR also noted that it had shelved a drilling campaign off the west coast of Africa.