Canadian Natural takes Keystone XL pipeline charge, raises dividend by 11 per cent

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CALGARY — Canadian Natural Resources Ltd. is joining other large oil producers in setting aside millions of dollars to account for potential costs resulting from the cancellation of the Keystone XL pipeline.

In its fourth-quarter results, the Calgary-based company is taking a charge of $143 million to account for its exposure to the line killed by U.S. President Joe Biden in January.

Rivals Cenovus Energy Inc. and Suncor Energy Inc. earlier provided $100 million and $142 million charges against earnings, respectively, related to backstopping the line as shippers.

Canadian Natural says it is increasing its quarterly dividend for the 21st consecutive year by 11 per cent to 47 cents per share after resisting calls last year to lower it amid plunging oil prices.

The company is reporting fourth-quarter net earnings of $749 million or 63 cents per share on sales of $5.2 billion, up from $597 million or 50 cents per share in the year-earlier period on sales of $6.3 billion.

In reports, analysts said Canadian Natural matched their expectations with production of 1.2 million barrels of oil equivalent per day, up from 1.16 million boe/d in the fourth quarter of 2019, and would have beat their financial expectations if not for the Keystone XL provision.

“The 2021 capital budget of approximately $3.2 billion drives targeted annual production growth of approximately 61,000 boe/d, at the midpoint of our production range, from 2020 levels, and robust free cash flow generation,” said chief financial officer Mark Stainthorpe in a news release.

“At the current 2021 annual strip pricing of approximately US$57 WTI (West Texas Intermediate) per barrel, the company targets to generate significant annual free cash flow of approximately $4.9 billion to $5.4 billion, after our capital program and increased dividend.”

This report by The Canadian Press was first published March 4, 2021.

Companies in this story: (TSX:CNQ, TSX:CVE, TSX:SU)

The Canadian Press