Canadian Natural Resources(US:CNQ)2025-08-07 19:51Financial Performance - Product sales for Q2 2025 were $9,675 million, a decrease of 23.9% from Q1 2025's $12,712 million and an increase of 11.7% from Q2 2024's $10,622 million[14]. - Net earnings for Q2 2025 were $2,459 million, remaining stable compared to Q1 2025's $2,458 million and up 43.3% from Q2 2024's $1,715 million[14]. - Adjusted net earnings from operations for Q2 2025 were $1,496 million, down 38.5% from Q1 2025's $2,436 million but up 9.4% from Q2 2024's $1,892 million[14]. - The basic earnings per common share for Q2 2025 was $1.17, unchanged from Q1 2025 and up 46.3% from Q2 2024's $0.80[14]. - Net earnings for the six months ended June 30, 2025, were $4,917 million, a 82% increase from $2,702 million for the same period in 2024[16]. - Adjusted net earnings from operations for the six months ended June 30, 2025, were $3,932 million, an increase from $3,366 million in 2024[126]. Cash Flow and Expenditures - Cash flows from operating activities for Q2 2025 were $3,114 million, a decrease of 27.3% from Q1 2025's $4,284 million and an increase of 23.4% from Q2 2024's $4,084 million[14]. - The company reported adjusted funds flow of $3,262 million for Q2 2025, down 28.0% from Q1 2025's $4,530 million but up 3.9% from Q2 2024's $3,614 million[14]. - Net capital expenditures for Q2 2025 were $1,915 million, an increase of 47.0% from Q1 2025's $1,303 million and an increase of 17.1% from Q2 2024's $1,621 million[14]. - Cash flows from operating activities for the six months ended June 30, 2025, were $7,398 million, up from $6,952 million for the same period in 2024[20]. - Net capital expenditures for the six months ended June 30, 2025, were $3,218 million, up from $2,734 million for the same period in 2024, representing a 17.7% increase[136]. Production and Sales Volumes - Crude oil and NGLs production before royalties for the second quarter of 2025 was 1,019,149 bbl/d, a 9% increase from 934,066 bbl/d in the second quarter of 2024[22]. - Total crude oil and NGLs production was 1,019,149 bbl/d for the three months ended June 30, 2025, compared to 934,066 bbl/d for the same period in 2024[44]. - North America crude oil and NGLs production before royalties for the six months ended June 30, 2025 averaged 553,482 bbl/d, a 10% increase from 502,636 bbl/d for the same period in 2024[52]. - Total sales volumes for crude oil and NGLs in Q2 2025 were 558,526 bbl/d, compared to 588,896 bbl/d in Q1 2025, indicating a decline of approximately 5.7%[183]. Pricing and Market Conditions - Realized crude oil and NGLs prices averaged $69.58 per bbl for the second quarter of 2025, a decrease of 20% from $86.64 per bbl in the second quarter of 2024[23]. - The global crude oil benchmark pricing declined through the second quarter of 2025, influenced by demand outlook concerns and OPEC+ output hikes[31]. - North America realized crude oil and NGLs prices decreased 19% to an average of $69.30 per bbl for Q2 2025 compared to $85.49 per bbl for Q2 2024[64]. - The average crude oil and NGLs price for North America was $73.95 per bbl for the six months ended June 30, 2025, down 4% from $76.94 per bbl for the same period in 2024[64]. Expenses and Cost Management - Production expense for crude oil and NGLs averaged $14.03 per bbl in the second quarter of 2025, a decrease of 4% from $14.54 per bbl in the second quarter of 2024[27]. - The company experienced fluctuations in production expenses due to increased carbon tax, fluctuating energy costs, and inflationary cost pressures[34]. - North America crude oil and NGLs production expense averaged $12.28 per bbl for the six months ended June 30, 2025, a decrease of 9% from $13.56 per bbl for the same period in 2024[77]. - Transportation expense averaged $3.44 per bbl for the six months ended June 30, 2025, an increase of 56% from $2.21 per bbl for the same period in 2024[93]. Debt and Liquidity - As of June 30, 2025, the company had approximately $4,825 million in liquidity, including undrawn revolving bank credit facilities of $4,723 million[33]. - Long-term debt was $16,979 million, down from $18,688 million at the end of 2024, resulting in a debt to book capitalization ratio of 29.1%[150]. - The company’s adjusted working capital increased to $102 million as of June 30, 2025, compared to $20 million at the end of the first quarter[144]. - The company’s liquidity position includes readily available undrawn bank credit facilities and cash equivalents, which are crucial for meeting short-term funding requirements[200]. Strategic Initiatives - The company plans to acquire working interests in AOSP and Duvernay assets in the fourth quarter of 2024, impacting future production volumes[34]. - The 2025 capital budget is targeted at approximately $6,050 million, aimed at near-term production growth and includes $135 million for carbon capture and office relocation[138]. - The company continues to utilize commodity derivative financial instruments to hedge against price volatility, allowing for the hedging of up to 60% of the next 12 months' budgeted production[152].