Canadian Natural Resources Limited

Good morning. We would like to welcome everyone to Canadian Natural's 2025 First 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, May 8, 2025, at 7 a.m. Mountain Time. I would now like to turn the meeting over to your host for today's call, Lance Casson, Manager of Investor Relations. Please go ahead.

Lance Casson Thank you, operator. Good morning, everyone, and thank you for joining Canadian Natural's 2025 First Quarter Earnings Conference call. As always, I'd like to remind you of our forward-looking statements, and it should be noted that in our reporting disclosures, everything is in Canadian dollars, unless otherwise stated, and we report our reserves and production before royalties. Also, I would suggest to review the advisory section in our financial statements that include comments on non-GAAP disclosures. Speaking on today's call will be Scott Stealth, our President, and Victor Durrell, our Chief Financial Officer. Additionally, in the room with us this morning is Robin Zabeck, COO of E&P, Jay Frock, COO of oil sands, and Mark Stainthorpe, Executive Advisor. Scott will first provide details of our top-tier operational performance and effective and efficient operations that are driving strong results Victor will then summarize our financial results, including strong financial position and returns to shareholders. To close, Scott will summarize prior to opening up the line for questions. With that, over to you, Scott.

Thank you, Lance, and good morning, everyone. We have a long track record of being a safe, industry-leading, effective, and efficient producer while constantly delivering top-tier operational and financial performance. All our employees, our shareholders, focused on doing it right while driving strong results, and always working on continuous improvement opportunities. We achieved record quarterly production during the first quarter of 2025 of approximately 1.582 million BUEs per day, which included a record quarterly liquids production of approximately 1.174 million barrels per day, 79% of which was long life, low decline production, and record quarterly natural gas production of 2.451 BCF per day. During the first quarter, our world-class oil sands mining and upgrading assets achieved record quarterly SEO production of approximately 595,000 barrels per day of SEO. This was an increase of 34% or approximately 150,000 barrels per day compared to the first quarter of 2024. Gross production of approximately 630,000 barrels per day in the first quarter of 2025, with upgrade utilization of 106%, was the highest quarterly oil plants mining and upgrading gross production in the company's history. This was achieved through successes in the recently completed reliability enhancement project and Scotford Upgrader de-bottleneck work, which drove the strong performance. These achievements were anchored by industry-leading FCO operating costs of $21.88 per barrel, which drove significant free cash flow in the quarter. Importantly, when comparing to peers in 2024, our annual oil sands mining and upgrading operating costs were in the range of $7 to $10 per barrel lower than our peer average. This equates to incremental annual margin of approximately $1.2 to $1.7 billion based on our 2024 annual production. Our record natural gas production in the quarter includes the recently acquired DuVernay assets that closed in December of 2024. We are achieving strong production results and cost reductions on these assets. We are confident we will add even more value than what we planned at the time of the acquisition. This is made possible through our commitment to continuous improvement and a strong team culture that focuses on improving our already top-tier operating costs, driving execution of organic growth opportunities, and maximizing value for our shareholders. Additionally, as a result of good work by our teams funding efficiencies, we are reducing our 2025 capital budget by $100 million and are now forecasting capital for 2025 at 6.05 billion excluding abandonments. Importantly, this reduction will have no impact on our planned activities or targeted production volumes for 2025. I will now run through the remaining first quarter operational results. On the conventional side of the business, primary heavy oil production averaged approximately 85,600 barrels per day for the first quarter, an increase of 9% over the first quarter of 2024, reflecting strong drilling results from our multilateral well programs, which offset natural field declines. Primary heavy oil operating costs averaged $18.13 per barrel, which is down 5% from the first quarter of 2024, primarily reflecting higher production and lower energy costs. Pelican Lake production averaged just over 43,000 barrels per day in the first quarter of 2025, a decrease of 4% from the first quarter of 2024, reflecting low natural gas declines for this long life, low decline asset. Operating costs at Pelican averaged $9.77 per barrel in the first quarter, which is comparable to the last year. North American light crude oil and NGL production averaged approximately 147,800 barrels per day in the first quarter, which is up 30% from the first quarter of 2024, primarily driven by our recently acquired DuVernay assets, and strong drilling results in our liquid-rich natural gas assets. Operating costs on our light crude oil and NGL's operations averaged $13.15 per barrel, a decrease of 14% compared to the first quarter of 2024, reflecting higher production and lower energy costs. On the recently acquired DuVernay assets, our effective and efficient operations, various synergies, and expertise in similar plays such as the have resulted in both capital and operating cost efficiencies. Additionally, we are on track to achieve 2025 budget production of approximately 60,000 barrels per day. By optimizing well lengths and completion designs in the DuVernay combined with their top tier execution, we are drilling longer wells with improved reservoir access at lower costs. On a length normalized basis, combined drilling and completions costs for 2025 are targeting an improvement of approximately 14% or $1.8 million per well compared to 2024. We're targeting to drill 43 gross wells in the Duvernay as part of the 2025 Capital Development Program. Additionally, operating costs in the Duvernay during the first quarter of 2025 were strong, averaging approximately $9.52 per BUE. North American natural gas production for the first quarter was a record, averaging more than 0.45 BCF per day, an increase of 14% over the first quarter of 2024. Operating costs on our North American natural gas averaged $1.16 per MCF, which is down 9% compared to the first quarter of 2024, primarily resulting from higher production volumes. In our thermal in situ operations, we achieved strong thermal production in the first quarter, averaging approximately 284,700 barrels per day, This is up 6%, approximately 16,500 barrels per day from the first quarter of 2024, resulting from a capital efficient thermal pad ad development program. First quarter thermal and situ operating costs averaged $11.23 per barrel, which is down 20% compared to the first quarter of 2024, primarily reflecting higher production volumes and lower energy costs. A primrose, following strong results from the recently drilled CSS pad, we are planning to reallocate a portion of pad add capital in 2025 to Primrose from Kirby to maximize returns. We now target to drill a CCS pad, DSS pad in the fourth quarter this year with production targeted to come on in 2026. At Jackfish, we finished drilling a SAGD pad in the fourth quarter of 2024 with production targeted to come on in the third quarter of this year. At Pike, we completed drilling one SAGD pad and we're currently drilling a second SAGD pad, both of which will be tied into existing jackfish facilities. These two pads are targeted to come on production in 2026 and keep the jackfish plants at full capacity. At Kirby, we recently finished drilling a SAGD pad, which is targeted to come on production in the fourth quarter of this year. At our commercial scale solvent SAGD pad at Kirby North, We began solvent injection in June of 2024 and solvent recoveries continue to meet expectations exceeding 80%. As we continue to build off the successes, we identified several work over opportunities targeting enhancing injection, liner steam and steam solvent distribution, SORs and production. These work overs are targeted to be completed in the second quarter and we will continue monitoring over the second half of 2025. Canadian Naturals' advantage is our ability to effectively allocate cash flow to our four pillars. We have a well-balanced, diverse, and large asset base, of which a significant portion is long-life, low-decline assets, requiring less capital to maintain our volumes. We will continue to allocate cash flow to our four pillars in a disciplined manner to maximize value for our shareholders, which is all driven by effective capital allocation, effective and efficient operations, and by our team who deliver top-tier results. Now, I will turn it over to Victor for our first quarter financial review.