Core Insights - The Federal Reserve's decision to end quantitative tightening (QT) has sparked discussions about a potential policy shift, but it should not be equated with the start of a new easing cycle [1][2] - The Fed will stop reducing its Treasury holdings but will continue to let approximately $15 billion of mortgage-backed securities (MBS) mature each month, replacing them with short-term Treasury bills [1][3] - This operation is characterized as an asset swap rather than an increase in reserves, focusing on changing the composition of the balance sheet rather than expanding its size [1][4] Summary by Sections End of QT vs. Restart of QE - The current Fed operation is fundamentally different from quantitative easing (QE), which aims to inject liquidity into the financial system through large asset purchases [2][4] - The Fed's plan involves an internal adjustment of its asset portfolio, with no increase in bank reserves, making it a misunderstanding to interpret this as a restart of QE [2][3] Future Balance Sheet Expansion - Future expansion of the Fed's balance sheet is expected only in extreme situations, such as a severe recession or financial crisis, primarily to hedge against cash demand [3][4] - The Fed may begin purchasing Treasury bonds to maintain stable reserve levels, potentially increasing its buying by $10 billion to $15 billion monthly to match cash growth [3][4] Focus on Treasury Issuance Strategy - The key focus for asset markets should shift from the Fed to the U.S. Treasury, which plays a crucial role in determining how much duration risk the market needs to absorb [5][14] - The Treasury's recent strategy has leaned towards increasing short-term bond issuance, and the Fed's purchase of short-term Treasuries may facilitate this, depending on the Treasury's final decisions [5][14]

Core Viewpoint - The Federal Reserve's decision to end quantitative tightening (QT) has sparked discussions about a potential policy shift, but it should not be interpreted as the beginning of a new easing cycle [1][2]. Group 1: Federal Reserve's Actions - The Federal Reserve announced it will end QT on December 1, which is about six months earlier than previously expected [1]. - The Fed will stop reducing its Treasury holdings but will continue to let approximately $15 billion of mortgage-backed securities (MBS) mature each month, replacing them with an equal amount of short-term Treasury bills (T-bills) [1]. - This operation is characterized as an asset swap rather than an increase in reserves, focusing on changing the composition of the balance sheet rather than expanding its size [1]. Group 2: Distinction from Quantitative Easing (QE) - It is crucial to distinguish this operation from quantitative easing (QE), which involves large-scale asset purchases to inject liquidity into the financial system [2]. - The Fed's current plan is merely an internal adjustment of its asset portfolio, not an increase in bank reserves, thus misinterpreting it as a restart of QE is incorrect [2]. - The cumulative impact of stopping the $5 billion monthly reduction in Treasury holdings is relatively minor, amounting to only $30 billion in the context of the Fed's large portfolio [2]. Group 3: Future Balance Sheet Expansion - Future expansion of the Fed's balance sheet is expected to occur only under extreme conditions, such as a severe recession or financial crisis, primarily for technical reasons to hedge against cash demand [3]. - The Fed may need to purchase additional Treasury securities to maintain stable reserve levels, potentially increasing its monthly purchases by $10 billion to $15 billion to match cash growth [3]. - This buying behavior is aimed at preventing a decline in reserves rather than increasing them, and should not be overinterpreted as a signal of monetary easing [3]. Group 4: Focus on Treasury's Issuance Strategy - The real focus for asset markets should shift from the Federal Reserve to the U.S. Treasury, which plays a key role in determining how much duration risk the market needs to absorb [4]. - The Treasury's recent strategy has leaned towards increasing the issuance of short-term bonds, and the Fed's purchase of short-term Treasuries may facilitate further short-term bond issuance by the Treasury [4]. - Ultimately, the Treasury's decisions will significantly influence market liquidity and interest rate trends, making it a core variable in market direction [12].

Financial Data and Key Metrics Changes - Canadian Natural achieved record quarterly corporate production of approximately 1.62 million BOEs per day, a significant increase of approximately 257,000 BOEs per day or 19% from Q3 2024 levels [4][12] - Adjusted funds flow for Q3 2025 was approximately CAD 3.9 billion, with adjusted net earnings of CAD 1.8 billion [12] - Returns to shareholders in the quarter totaled CAD 1.5 billion, including CAD 1.2 billion in dividends and CAD 300 million in share repurchases [12][14] - The company has increased its dividend for 25 consecutive years, with a compound annual growth rate (CAGR) of 21% [12] Business Line Data and Key Metrics Changes - Oil sands mining and upgrading production averaged approximately 581,136 barrels per day, an increase of approximately 83,500 barrels per day or 17% from Q3 2024 levels [6] - Thermal in situ operations averaged 274,752 barrels per day, showing slight growth from Q3 2024 [7] - Primary heavy crude oil production averaged 87,705 barrels per day, an increase of 14% from Q3 2024 levels [8] - North American light crude oil and natural gas production averaged 180,100 barrels per day, a 69% increase from Q3 2024 [9][10] Market Data and Key Metrics Changes - North American natural gas production averaged approximately 2.66 BCF for the quarter, a 30% increase from Q3 2024 levels [10] - Operating costs for North American natural gas averaged CAD 1.14 per MCF, a decrease of 7% from Q3 2024 [10] Company Strategy and Development Direction - The company aims to enhance operational efficiencies through the recent AOSP swap with Shell Canada, which adds approximately 31,000 barrels per day of annual zero-decline bitumen production [5] - Canadian Natural's strategy focuses on continuous improvement, capital allocation to high-return projects, and maintaining a diverse asset base to mitigate reliance on any single commodity [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the operational setup into the end of the year, with all assets performing as expected [41] - There is a positive outlook on discussions with the federal government regarding carbon competitiveness and pathways for future growth opportunities [34][35] Other Important Information - The company repaid $600 million of US dollar debt securities during Q3 and received a new long-term investment-grade credit rating of BBB plus from Fitch Ratings [14] - The board approved a quarterly dividend of CAD 58.75 per common share, payable on January 6, 2026 [12] Q&A Session Summary Question: Potential operational benefits from the Albion Oil Sands asset swap - Management highlighted the utilization of equipment and potential cost savings from consolidating operations [18][19] Question: Participation in new pipeline projects for Canadian crude - Management indicated openness to reviewing egress opportunities and potential participation in projects that enhance market access [23][24] Question: Need for further consolidation in Western Canada gas - Management emphasized the importance of egress opportunities for gas and the need for LNG projects to unlock basin potential [27][28] Question: Implications of T block decommissioning on capital expenditures - Management noted that 2026 capital expenditures are expected to increase modestly, with tax recoveries on expenditures being significant [36][37] Question: Operational setup and asset performance as the year ends - Management confirmed that all assets are performing as expected with strong optimization and utilization [41] Question: Updated thoughts on M&A and capital allocation strategy - Management stated that while they look at M&A opportunities, there are no significant changes to their capital allocation strategy [45][46]

Core Viewpoint - DNO ASA has streamlined its Norwegian Continental Shelf portfolio through a multi-asset swap with Aker BP ASA, enhancing its position in key areas while divesting non-core assets [1][2][3]. Group 1: Transaction Details - DNO increased its stake in the Verdande field from 10.5% to 14%, which is in advanced development and set to start production later this year [2]. - In exchange, DNO will transfer its stake in the Vilje field, along with interests in the Kveikje discovery and three exploration permits to Aker BP [2][3]. - The transaction involves no cash consideration and is subject to regulatory approval [3]. Group 2: Portfolio Changes - The swap results in the following changes in interests: - Vilje: Producing, current interest 28.9%, post-deal interest – - Verdande: Under development, current interest 10.5%, post-deal interest 14% - Kveikje: Discovery, current interest 29%, post-deal interest 20% - PL1171 (Sunndal): Exploration, current interest 50%, post-deal interest 34% - PL1175 (Reka): Exploration, current interest 30%, post-deal interest 20% - PL1204 (Abel): Exploration, current interest 60%, post-deal interest 40% [4]. Group 3: Strategic Context - This transaction aligns with DNO's strategy of highgrading its North Sea portfolio, following the acquisition of Sval Energi AS in June 2025 [3].