Canadian Natural Resources earnings: Oil surge sees Q1 profit more than double

·2-min read
Canadian Natural Resources Limited's Primrose Lake oil sands project near Cold Lake, Alberta August 8, 2013. REUTERS/Dan Riedlhuber
Canadian Natural Resources Limited's Primrose Lake oil sands project near Cold Lake, Alberta August 8, 2013. REUTERS/Dan Riedlhuber

Canadian Natural Resources (CNQ.TO)(CNQ), the country's largest oil and gas producer, says surging energy prices in the wake of Russia's war in Ukraine saw its net profit more than double in its latest quarter.

The Calgary-based company reported $3.1 billion in net earnings, or $2.63 per share, for the first three months of the year, compared to $1.38 billion, or $1.16 per share, in the same period last year.

CNRL says its average realized price per barrel shot up to $93.54 in its first quarter of 2022, a 77 per cent year-over-year increase, as production rose marginally to 1.28 million barrels of oil equivalent per day (boepd).

The company reported $3.4 million in quarterly free-cash-flow after dividends and net capital expenditures. CNRL says it returned approximately $1.8 billion to shareholders through dividends and share repurchases in the first quarter. The company says additional free-cash-flow will be allocated to its investors once net debt falls to $8 billion, from $13.8 billion at the end of Q1.

"Our ability to generate significant and sustainable free cash flow ensures a strengthening balance sheet and a sustainable and growing returns to shareholders," CNRL president Tim McKay told analysts on a post-earnings conference call on Thursday.

CNRL raised its dividend in March by 28 per cent to $0.75 per share.

Toronto-listed shares fell 3.09 per cent to $81.04 as at 11:52 a.m. ET on Thursday. The stock has climbed more than 117 per cent over the past 12 months. Last month, CNRL became the first TSX-listed oil and gas company to surpass $100 billion in market value.

"With free cash flow beating expectations and an updated capital allocation framework for incremental shareholder returns, we expect the update to be positive for shares," Tudor, Pickering, Holt & Co. analyst Matt Murphy wrote in a note to clients on Thursday.

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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