Canadian Natural Resources - Earnings ($CNQ)

Canadian Natural Resources: the current market capitalization (at a $56 share price) is $61 billion, and the enterprise value is $70 billion. They reported earnings of $1.4 billion for Q1, which means that shares are trading for 11 times annualized earnings. Adjusted funds from operations for the quarter were $2.5 billion, which is an annualized AFFO/EV yield of 14%. Adjusted funds flow less base capex was $1.7 billion for the quarter, which is a "FCF"-like yield of almost 10% on the EV.

Liquids production was up 2% Q1 2023 vs Q1 2022, and BOEs were up 3% thanks to strong natural gas growth. Capital expenditures in E&P were down 10% and in oil sands mining and upgrading were up about 8%. The total net capital expenditures were down 4% year over year. This is much better than we have seen at any other the producers we have looked at.

During the first quarter, they spent $680 million on dividends and $500 million on share repurchases, for total shareholder returns of $1.18 billion, which is an annualized shareholder yield of almost 8%.

The proved plus probable net reserves at the end of 2022 (10-K, AIF) were 14.4 billion BOE, which includes 10.7 billion barrels of oil and the rest natural gas and NGLs. That is an enterprise value of $6.5 per barrel of oil alone.

The net present value at a 10% discount rate, after tax, of their proved and probable reserves is $103 billion. Another way to look at it is that their current enterprise value of $70 billion is about equal to the after-tax NPV of the reserves at a 15% discount rate. The pricing assumption is based on an oil price of WTI in the high $70s for the next five years.

Investor presentation for May 2023 [PDF].