Canadian Natural Resources Limited

Good morning. We would like to welcome everyone to the Canadian Natural Resources 2021 Third Quarter Earnings Conference Call and Webcast. After the presentation, we will conduct a question and answer session. Instructions will be given at that time. Please note that this call is being recorded. Today, November 4th, 2021 at 9 o'clock AM Mountain Time. I would now like to turn the meeting over to your host for today's call. Mr. Corey Bieber, Executive Advisor. Please go ahead, Mr. Bieber.

Thank you, operator, and good morning, everyone, and welcome to Canadian Naturals' third quarter 2021 Corporate Update Conference call. Canadian Naturals had another very strong quarter, financially and operationally. As I commented before, I believe our asset base is unique amongst our peer group, underpinned by long-life, low-decline assets, and complemented by our conventional assets that allow significant flexibility and all of which can generate very significant free cash flow. Beyond our robust asset base, there is a corporate strategy that focuses on generating real returns for shareholders and a driven management team and a corporate culture that focuses on being effective and efficient. Over the years, Canadian Natural has clearly demonstrated its robustness, sustainability, and the strength of its business plan. For 2021 and beyond, I believe we are one of the few companies capable of delivering meaningful economic growth increasing returns to shareholders, and reducing absolute debt in a responsible manner. For today's call, Tim McKay, our president, will first provide a corporate update. Mark Stainthorpe, our chief financial officer, will then provide an update on our 2021 financial outlook, as well as our strong financial position. Tim will then provide a summary prior to opening up for questions. Before we kick off, I'd like to remind you of our forward-looking statements. Of note in our reporting disclosures is that everything will be in Canadian dollars unless otherwise stated. And as well, we report our reserves in production before royalties. To that end, I would suggest that you review our comments on non-GAAP disclosures in our financial statements.

With that, I'll turn it over to you, Tim. Thank you, Corey. Good morning, everyone. Canadian Natural delivered strong operational results in the third quarter as we achieved quarterly production of approximately 1.238 million BOEs per day, as a result of our robust, long life, low decline assets, operational excellence, and with our capital discipline, we generated significant free cash flow. We balanced free cash flow to our four pillars of capital allocation, maximizing value for our shareholders. In the three quarters of 2021, we have reduced net debt by 5.4 billion, returned approximately 2.4 billion to our shareholders through dividends and share repurchases, maintained capital discipline executed on optimistic transactions, which all add long-term value. Strengths of Canadian Natural's business model are also applied to environmental, social, and governance to deliver industry-leading performance across the board, a significant factor in our long-term sustainability. Our safety record is top tier as our corporate total recordable industry frequency improved 0.021 in 2020. a reduction of 58% from 2016 levels. For the period from 2016 to 2020, North American EMP methane emissions are down 28%. In our oil sands operation, our GHG emissions intensity is down 38%. And corporately in this period, we've taken equivalent of over 1 million cars off the road annually. And over and above this, we are the leading capture and sequester of CO2 in the oil and gas industry worldwide. In June, we announced the Oil Sands Pathways Net Zero Initiative, an alliance of oil sands industry participants who have a goal of achieving net zero emissions in the oil sands operations by 2050. This initiative of oil sands industry participants and Canadian Natural will further strengthen our leading ESG performance while delivering meaningful emission reductions, balancing sustainable economic development, and we will require collaboration with the federal and Alberta governments so that together we can achieve Canada's climate goals. Starting with natural gas, overall Q3 was approximately 1.7 BCF a day, an increase from our Q2 production of approximately 1.6 BCF, with North American Q3 natural gas production of 1.698 BCF. BCF per day, up from the Q2 of 1.594 BCF per day, as the Pine River plant resumed operations, acquisitions, and strong drilling routes offset natural declines. We continue to focus on operational excellence, and our Q3 North American natural gas operating costs was strong at $1.14 per MCF versus the Q2 of $1.15 per MCF. At Townsend, production of 284 million cubic feet of natural gas was achieved in Q3, an increase of 7% over Q2. With the BC court decision, all development activities in Townsend area have been temporarily suspended, with nine wells, weighing facilities, and pipeline permit approvals. Capital has been redeployed to our deep inventory of natural gas opportunities in Northwest Alberta, with similar, strong, drill-filled capital efficiencies and production volumes. And with EcoStrip pricing over $5 a G-day, adding more value to our natural gas production as we target to exit 2021 in excess of 1.8 BCF a day. Our Q3 North American light oil and NGL production was approximately 89,000 barrels a day, down from Q2, primarily due to the unplanned third-party outage, which impacted our NGL production by approximately 8,400 barrels per day in the quarter. Q3 operating costs were $16.19 per barrel, an increase from Q2 operating costs of $14.39 per barrel. The company continues to advance its high-value Montney light crude oil development at Wembley. Thirteen wells came on stream in Q3, with an additional five wells targeted to come on stream in Q4. The new crude oil battery is on stream ahead of schedule and below budgeted costs. And with our strong wells, we are targeting total production rates of more than 10,000 barrels a day of liquid and 30 million cubic feet of natural gas. representing an increase of approximately 1,500 barrels a day of liquid and 2 million to 8 of natural gas, giving the project strong on-stream capital efficiency of approximately $6,800 per VUED. International E&P crude oil volumes averaged approximately 30,000 barrels a day in Q3, a decrease of 9% from Q2 levels. The changes in production from prior periods were primarily a result of planned maintenance activities and natural fuel declines. Crude oil operating costs increased from prior periods, primarily due to lower volumes as a result of the planned maintenance activities in the North Sea and offshore APCA, as well as increased GNG and energy costs in the North Sea. Q3 heavy oil production was approximately 64,000 barrels a day versus 66,000 barrels a day in Q2, primarily a result of natural fuel decline partly offset by new development activities. Q3 operating costs were $19.51 per barrel, comparable to the Q2 operating cost of $19.32 per barrel. At Smith, the additional six net horizontal multilateral wells that were targeting the Clearwater came on production in Q4 at approximately 2,100 barrels per day, exceeding the targeted rate of 2,000 barrels a day. A key component of our long-life flow decline asset is our world-class Pelican Lake pool, where our leading-edge polymer flood continues to deliver significant values. Third quarter production was approximately 54,000 barrels a day, down 2% from Q2 of 55,000 barrels a day, primarily due to natural fuel decline. Operating costs continue to be very strong at 590 per barrel versus the Q2 operating costs of 690 per barrel. Our team at Pelican continues to drive operational excellence, and with our low decline and very low operating costs, Pelican Lake continues to have excellent net value. Our third quarter thermal production was 248,113 barrels a day, down 4% from Q2 of 258,551 barrels, primarily due to planned turnaround at jackfish and natural field declines. Operating costs in Q3 were 4% higher at 12.24 per barrel versus Q2 operating costs of 11.78 per barrel, primarily due to lower volumes in the quarter. Results of Kirby salt from an ongoing solvent Projects continue to be positive, showing SOR and GHG intensity reductions of 45%, as well as solvent recoveries of approximately 85%. As a result, the company is progressing with the engineering and design of a commercial-scale sag-deep pad development at Kirby North. At Primrose, the second solvent injection pilot commenced operations in October in the steam flood area. This pilot targets to operate for a two-year period with targeted SOR and GHG intensity reductions of 40 to 45%, and solvent recoveries greater than 70. At our oil sands operations, we had a strong third quarter with production at 468,126 barrels per day and a strong operating cost of $19.86 per barrel of SCO. Following the recent maintenance and turnaround activities across the oil sands, mining and upgrade assets topped your performance and utilization continues to drive industry-leading operating costs. During the first nine months of 2021, since the completion of Scottford Turnaround and Expansion in 2020, the company has increased sales volumes by over 20,000 barrels a day of FCO. Oil sands mining and upgrading continues to be top tier with production volumes in October of approximately 477,000 barrels a day of FCO as our teams continue to leverage our technical expertise improve reliability, enhance our production at both sites, as well as finding operating efficiency to drive our costs down with consistency. With that, I will now turn it over to Mark for a financial review.