Canadian Natural Resources Limited Q4 FY2025 earnings call

2025 was best operational year, set production records, lowered operating costs, capital expenditures under forecast. Grew production organically and completed accretive acquisitions. Achieved record annual production of 1,571,000 BOEs per day. Continuous improvement in safety record. Specific annual operating highlights: liquids production increase, oil sands mining and upgrading production, thermal in situ production, primary heavy crude oil production growth. Q4 2025 also impressive with record quarterly production, liquids production, oil sands mining and upgrading production, etc. Reserves significant compared to other major oil companies, year-end 2025 total approved reserves and total approved plus probable reserves increased by 4% and 3% respectively from 2024. Strong execution across asset base provides opportunities to create shareholder value, Board approved quarterly dividend increase, enhanced free cash flow allocation policy.

2025 was the best operational year. Achieved record annual production of 1,571,000 BOEs per day, year-over-year growth of 15% or ~207,000 BOEs per day from 2024. Liquids production: 1,146,000 barrels per day, increase of 141,000 barrels per day or 14% from 2024, 65% of total production. Oil sands mining and upgrading: record production of approx. 565,000 barrels per day of zero decline SCO with upgrader utilization of 100%, operating costs $22.66 per barrel. Thermal in situ production: approx. 275,000 barrels per day. Primary heavy crude oil production: growth of approx. 88,000 barrels per day, 11% growth from 2024, operating costs averaged $16.68 per barrel in 2025, a decrease of 8% from 2024. Natural gas production: record approx. 2.5 BCF per day, increase of 400 million per day or 19% from 2024.

Increased midpoint of 2026 production guidance by 20,000 BOEs per day with range 1,615,000 BOEs per day to 1,665,000 BOEs per day. Reduced 2026 operating capital forecast by 310 million to approx. 6 million. Deferred feed capital for oil sands jack pine mine expansion project due to lack of finalization of government regulatory policies around carbon pricing and methane.

Lack of finalization of government regulatory policies around carbon pricing and methane creates uncertainty and economic burden for long-term growth investment in oil sands jack pine mine expansion project. Volatile commodity price environment may impact capital program.

Q: You guys have shown a track record of applying C&Q best practices on new assets acquired or taken over-operatorship of. Can you talk to some of the opportunities looking to chase down with Albion mine and interaction with Horizon?

A: Synergies of utilizing equipment, people resources, contractors more efficiently to reduce operating costs. Over time, seen reduction in operating costs since 2017, increase in production.

Q: Talk towards bookends or key metrics management and board focus on for returning free cash to shareholders and flexibility in capital program.

A: Robust balance sheet from synergies of acquisitions, increased cash flow, lower operating costs, increased production. Not about bookends but continued growth of company organically and through acquisitions strengthening balance sheet.

Q: More on capital side, opportunities remaining for 2026 and shifting capital.

A: Have well-balanced rig program, monitor commodity prices, focused on value returns, not making significant changes to capital allocation, have capacity to increase heavy oil multilats slightly.

Q: Thoughts on 105% upgrade utilization in quarter, repeatability and re-rate.

A: 105% is strong, but doubt it leads to re-rate, will look at Horizon when bringing on NRUT project.

Q: Macro questions on Venezuela barrels, Middle East disruptions, heavy markets, gas.

A: Venezuelan barrels coming to market, Middle East developments affecting differentials. Focus on operating costs and diversified portfolio. Natural gas: strong supply market, need additional LNG export capacity.

Q: Are you at 75% payout now, debt level triggering higher payout?

A: At December 31st, below $16 million under policy, target increased returns in 2026, model strip and cash flows forward considering pricing volatility.