Canadian Natural Resources Limited's president commented on the company's fourth quarter and year-end 2025 results.

Canadian Natural's (TSX: CNQ) (NYSE: CNQ) President, Scott Stauth, commented on the Company's fourth quarter and year end 2025 results, "The year 2025 was the best operational year in the Company's long history of maximizing value for our shareholders. We set several production records, lowered our operating costs and capital expenditures came in under our forecast. We grew organically and completed several accretive acquisitions, including the Palliser Block assets in southern Alberta and liquids-rich Montney assets in the Grande Prairie area, along with increasing our ownership in the Albian mines to 100% through an asset swap. As a result, we achieved record annual production of 1,571 MBOE/d in 2025, resulting in year-over-year growth of 15% or approximately 207 MBOE/d from 2024 levels. We also achieved record annual liquids production of 1,146 Mbbl/d, of which 65% was comprised of Synthetic Crude Oil ("SCO"), light crude oil and NGLs, which are not subject to widening heavy crude oil differentials.

Strong execution across our large, diverse asset base continues to provide significant opportunities to create shareholder value in 2026 and beyond. This is evident by our increased production, strong free cash flow and growth in reserves achieved in 2025, through organic growth and accretive acquisitions. These successes provided the Board of Directors with the confidence to approve a dividend increase and an enhancement to our direct shareholder returns, by adjusting our net debt targets as a part of our free cash flow allocation policy. Additionally, we are decreasing our 2026 operating capital forecast by approximately $310 million, following the completion of a strategic acquisition early in 2026, and increasing our 2026 production guidance range to 1,615 MBOE/d and 1,665 MBOE/d from the previous guidance range of 1,590 MBOE/d and 1,650 MBOE/d.

Canadian Natural's reserves are significant when compared to other major oil companies, which support long-term organic growth opportunities. Year end 2025 total proved reserves of 15.91 billion BOE and total proved plus probable reserves of 20.75 billion BOE represent increases of approximately 4% and 3%, respectively, from year end 2024 levels. With approximately 73% of the Company's total proved reserves being long life low decline, the strength and depth of our assets is evident and provide us with a total proved reserves life index ("RLI") of 31 years and a total proved plus probable RLI of 40 years. We continue to deliver strong total proved Finding, Development and Acquisition ("FD&A") costs, including changes in Future Development Cost ("FDC"), achieving an industry leading FD&A in 2025 of $3.64/BOE for total proved reserves and $2.42/BOE for total proved plus probable reserves."

Canadian Natural's Chief Financial Officer, Victor Darel, added "In 2025, we generated adjusted net earnings of $7.4 billion or $3.56 per share, and adjusted funds flow of $15.5 billion or $7.39 per share. Throughout the year, we completed several accretive acquisitions, increasing production and cash flow, while reducing net debt by approximately $2.7 billion to just under $16 billion at year end 2025. We returned approximately $9.0 billion to our shareholders in 2025, including $4.9 billion in dividends, $1.4 billion in share repurchases and $2.7 billion in net debt reduction. Subsequent to year end, the Board approved an approximate 6.4% increase to our quarterly dividend, bringing the annualized dividend up to $2.50 per common share. This marks 2026 as the 26th consecutive year of dividend increases by Canadian Natural, with a compound annual growth rate ("CAGR") of 20% over that time, demonstrating the sustainability of our business model, our strong balance sheet and the strength of our diverse, long life low decline reserves and asset base.

Additionally, the Board of Directors have, effective January 1, 2026, adjusted the net debt target levels in our free cash flow allocation policy which results in an acceleration of the next increase to direct shareholder returns. Now, when net debt falls below $16 billion, compared to our previous target of $15 billion, we will increase direct shareholder returns in the form of share repurchases to 75% of free cash flow generated, managed on a forward-looking basis.

Our financial flexibility and long life low decline asset base provide a strong foundation and a competitive advantage with low maintenance capital requirements. Our US$ WTI breakeven remains top tier in the low to mid-$40 per barrel range. Our balance sheet is strong with significant liquidity of approximately $6.3 billion at year end 2025. Our excellent results highlight the cash flow generating capability of our top tier asset base with strong year end metrics including Debt to Book Capitalization at 26% and Debt to Adjusted EBITDA at 0.7x."

 

2025 ANNUAL HIGHLIGHTS

Generated net earnings of approximately $10.8 billion and adjusted net earnings from operations of $7.4 billion.

Generated adjusted funds flow of approximately $15.5 billion.

Returns to shareholders totaled approximately $9.0 billion, comprised of $4.9 billion in dividends, $1.4 billion in share repurchases and $2.7 billion through reduction in the Company's net debt.

Approximately 33.5 million common shares were repurchased and cancelled in 2025 at a weighted average price of $43.28 per share.

Record total annual production of approximately 1,571,000 BOE/d, an increase of 207,000 BOE/d or 15% from 2024 levels.

Record total liquids production of approximately 1,146,000 bbl/d, an increase of 141,000 bbl/d or 14% from 2024 levels.

Strong total corporate liquids operating costs(1) of $18.44/bbl (US$13.19/bbl), compared to $18.56/bbl (US$13.55/‍bbl) in 2024.

Record Oil Sands Mining and Upgrading production of approximately 565,000 bbl/d of zero decline SCO, with upgrader utilization of 100%, including the planned turnaround at the Athabasca Oil Sands Project ("AOSP").

Industry leading Oil Sands Mining and Upgrading operating costs of $22.66/bbl (US$16.21/bbl), compared to $22.88/bbl (US$16.70/bbl) in 2024.

Record thermal in situ production of 275,000 bbl/d of long life low decline production.

Record natural gas production of 2,547 MMcf/d, an increase of 400 MMcf/d or 19% from 2024 levels.

Canadian Natural reduced net debt by approximately $2.7 billion from 2024 year end levels.

Repaid US$1.2 billion of US dollar debt securities.

Issued C$1.65 billion in 3, 5 and 10 year medium-term notes.

2025 FOURTH QUARTER HIGHLIGHTS

Generated net earnings of approximately $5.3 billion and adjusted net earnings from operations of $1.7 billion.

Generated adjusted funds flow of approximately $3.7 billion.

Returns to shareholders totaled approximately $2.7 billion, comprised of $1.2 billion in dividends, $0.3 billion in share repurchases and $1.2 billion through reduction in the Company's net debt.

Record total quarterly production of approximately 1,659,000 BOE/d, an increase of 188,000 BOE/d or 13% from Q4/24 levels.

Record total liquids production of approximately 1,215,000 bbl/d, an increase of 125,000 bbl/d or 12% from Q4/24 levels.

Record Oil Sands Mining and Upgrading production of approximately 620,000 bbl/d of zero decline SCO with upgrader utilization of 105%.

Industry leading Oil Sands Mining and Upgrading operating costs of $21.84/bbl (US$15.66/bbl).

On November 1, 2025, Canadian Natural closed the AOSP asset swap with Shell and now owns and operates 100% of the Albian oil sands mines and associated reserves.

The transaction added approximately 31,000 bbl/d of annual, zero decline bitumen production to our Oil Sands Mining and Upgrading portfolio.

ACCELERATING SHAREHOLDER RETURNS WITH REVISED FREE CASH FLOW ALLOCATION POLICY

As a result of the Company's continued strong execution and resilience to volatile commodity prices, combined with continued growth of production, cash flow and reserves through strategic acquisitions and organic development, Canadian Natural is increasing its annual dividend and enhancing direct shareholder returns by updating its net debt targets within the Company's free cash flow allocation policy. The policy was last adjusted in October 2024, when on a proforma basis, including the acquired Chevron assets, annual production was approximately 1,465,000 BOE/d. Since then, through organic growth and strategic acquisitions, annual production has grown by approximately 12% or 175,000 BOE/d, to the mid-point of updated 2026 guidance.

The Board of Directors have approved an approximate 6.4% increase to the quarterly cash dividend to $0.625 per common share, from $0.5875 per common share, payable on April 7, 2026 to shareholders of record at the close of business on March 20, 2026.

This dividend increase represents an annualized dividend of $2.50 per common share and demonstrates the confidence that the Board has in the sustainability of our business model, our strong balance sheet and the strength of our diverse, long life low decline reserves and asset base.

Canadian Natural's leading track record of 26 consecutive years of dividend growth continues with a CAGR of 20% over that time.

The Company's free cash flow allocation policy has been revised based upon the increase in the Company's reserves and production from when it was last reviewed in 2024.

When net debt is at or above $16 billion (formerly $15 billion), 60% of free cash flow will be allocated to direct shareholder returns in the form of share repurchases and 40% to the balance sheet.

When net debt is between $13 billion (formerly $12 billion) and $16 billion (formerly $15 billion), 75% of free cash flow will be allocated to direct shareholder returns in the form of share repurchases and 25% to the balance sheet.

When net debt is at or below $13 billion (formerly $12 billion), 100% of free cash flow will be allocated to direct shareholder returns in the form of share repurchases.

The Company targets to manage the allocation of free cash flow on a forward-looking annual basis, while managing working capital and cash requirements as needed.

Free cash flow is calculated as adjusted funds flow less dividends on common shares, net capital expenditures and abandonment expenditures.

On March 4, 2026, the Board of Directors approved the renewal of the Company's Normal Course Issuer Bid ("NCIB"), which states that during the 12 month period commencing on March 13, 2026 and ending on March 12, 2027, the Company can repurchase for cancellation up to 10% of the public float (as determined in accordance with the rules of the TSX), subject to TSX approval.

 

UPDATED 2026 GUIDANCE

Canadian Natural is utilizing its capital flexibility in 2026 by reducing forecasted Operating Capital Expenditures by approximately $310 million, which reflects continuous improvement and efficiency gains on our development program and a deferral of front-end engineering and design ("FEED") capital on our Jackpine mine expansion opportunity at Albian.

As first communicated at the Company's 2025 investor day held on November 7, 2025, Canadian Natural continues to progress on its budgeted defined short-term growth strategy through the development of its Conventional E&P assets and thermal drill to fill pad additions, and its medium-term growth strategy by expending FEED capital on both its 70,000 bbl/d Pike 2 growth project and 30,000 bbl/d Jackfish expansion project.

As a part of its long-term growth strategy, the Company is deferring FEED and defined capital for our Oil Sands Jackpine mine expansion opportunity at Albian, that was originally included in our 2026 capital budget. This approximately $8.25 billion project is being deferred due to the lack of finalization of government regulatory policies as it relates to carbon pricing and methane, which creates uncertainty and economic burden for long-term growth investments. Once there is more certainty on these regulatory policies, approval timelines and egress, we will reassess the viability of this project.

Additionally, subsequent to year end, Canadian Natural has acquired assets in the Peace River area of Alberta, which are adjacent to existing operations in the area, and elsewhere for approximately $765 million.

RESERVES HIGHLIGHTS

A key differentiator for Canadian Natural is the strength, diversity and balance of its world class, top tier assets. The Company's total proved reserve life index ("RLI")(1) of 31 years is supported by long life low decline assets that have been strategically assembled and developed over several decades. The low maintenance capital requirements relative to the size and quality of the reserves affords the Company significant flexibility when balancing its four pillars of capital allocation to maximize shareholder value.

The Company's reserves were evaluated and reviewed by Independent Qualified Reserves Evaluators ("IQREs"). The following highlights are based on the Company's reserves using forecast prices and costs at December 31, 2025 (all reserves values are Company Gross unless stated otherwise).

Total proved reserves increased 4% to 15.910 billion BOE, with reserves additions and revisions of 1.253 billion BOE. Total proved plus probable reserves increased 3% to 20.750 billion BOE, with reserves additions and revisions of 1.213 billion BOE.

The strength and depth of the Company's assets are evident as approximately 73% of total proved reserves are long life low decline reserves. This results in a total proved BOE RLI of 31 years and a total proved plus probable BOE RLI of 40 years.

Additionally, high value, zero decline SCO and bitumen from the Horizon and Albian mines represent approximately 50% of total proved reserves with a RLI of 39 years.

Proved developed producing reserves additions and revisions for 2025 were 1.129 billion BOE, replacing 2025 production by 197‍%. The proved developed producing BOE RLI is 20 years.

Total proved reserves additions and revisions for 2025 replaced 2025 production by 218%. Total proved plus probable reserves additions and revisions for 2025 replaced 2025 production by 212%.

In 2025, Canadian Natural continued to achieve strong Finding, Development and Acquisition ("FD&A") costs:

FD&A costs, including changes in Future Development Cost ("FDC"), are $3.64/BOE for total proved reserves and $2.42/BOE for total proved plus probable reserves.

The net present value of future net revenues, before income tax, discounted at 10%, is $110.1 billion for proved developed producing reserves, $157.8 billion for total proved reserves, and $191.0 billion for total proved plus probable reserves.

OPERATIONS REVIEW 

North America Oil Sands Mining and Upgrading

Oil Sands Mining and Upgrading achieved record annual production in 2025, averaging 565,102 bbl/d of SCO, an increase of 20% or approximately 93,000 bbl/d from 2024 levels, reflecting the additional working interests acquired in AOSP, combined with effective and efficient operations.

Oil Sands Mining and Upgrading achieved strong annual upgrader utilization, averaging 100% in 2025, which included a planned turnaround at AOSP.

Industry leading Oil Sands Mining and Upgrading operating costs averaged $22.66/bbl (US$16.21/bbl) of SCO in 2025, compared to $22.88/bbl (US$16.70/bbl) in 2024.

Oil Sands Mining and Upgrading production has strong realized pricing, averaging $86.41/bbl in 2025.

At Horizon, the Company is progressing its Naphtha Recovery Unit Tailings Treatment ("NRUTT") project which targets incremental production of approximately 6,300 bbl/d of SCO, following mechanical completion in Q3/27.

As a part of its long-term growth strategy, the Company is deferring FEED and defined capital for our Oil Sands Jackpine mine expansion opportunity at Albian, that was originally included in our 2026 capital budget. This approximately $8.25 billion project is being deferred due to the lack of finalization of government regulatory policies as it relates to carbon pricing and methane, which creates uncertainty and economic burden for long-term growth investments. Once there is more certainty on these regulatory policies, approval timelines and egress, we will reassess the viability of this project.

 

North America Exploration and Production

Thermal in situ achieved record annual production in 2025, averaging 275,086 bbl/d, an increase of 2% from 2024 levels, reflecting the Company's capital efficient pad add and development program, partially offset by natural field declines.

Thermal in situ operating costs remain strong, averaging $11.09/bbl (US$7.93/bbl) in 2025, comparable to 2024 levels.

As part of the Company's defined short-term growth strategy, Canadian Natural has decades of robust capital efficient drill to fill growth opportunities on its long life low decline thermal in situ assets, which we continue to develop in a disciplined manner to deliver safe and reliable thermal in situ production.

The first Pike 1 pad was brought on production ahead of schedule in December 2025 which is tied into the Jackfish 3 facility. Current production rates from this pad of approximately 27,000 bbl/d are exceeding expectations, with a Steam to Oil Ratio ("SOR") of approximately 1.8x. A second Pike 1 pad is targeted to come on production in April 2026 and is targeted to keep production at the Jackfish 3 facility at full capacity.

At Primrose, the Company completed drilling a Cyclic Steam Stimulation ("CSS") pad in February 2026, with production targeted to come on in Q3/26. The Company is drilling two additional CSS pads which are targeted to come on production in 2027.

At Kirby, the Company is planning to commence drilling a Steam Assisted Gravity Drainage ("SAGD") pad in Q2/26, which is targeted to come on production in 2027.

As part of the Company's defined medium-term growth strategy, in 2026, front end engineering is progressing on both its 70,000 bbl/d Pike 2 greenfield project and 30,000 bbl/d Jackfish expansion project. In December 2025, Canadian Natural received regulatory approval for the Pike 2 greenfield SAGD project.

Canadian Natural has been piloting solvent enhanced oil recovery technology on certain thermal in situ assets with an objective to increase bitumen production while reducing the SOR and Greenhouse Gas ("GHG") emissions, at the same time optimizing solvent recovery. This technology has the potential for application throughout the Company's extensive thermal in situ asset base.

The Company continues to operate the commercial scale solvent SAGD pad at Kirby North and the solvent enhanced steam flood pilot at Primrose. An additional solvent SAGD pilot at Kirby South is targeted to begin injection in Q2/26 to evaluate additional future commercial development opportunities.

North America E&P liquids production, excluding thermal in situ, averaged 294,315 bbl/d in 2025, an increase of 24% or approximately 56,000 bbl/d from 2024 levels, reflecting opportunistic acquisitions and strong organic growth from heavy crude oil multilaterals, light crude oil and liquids-rich natural gas.

Primary heavy crude oil production averaged 87,888 bbl/d in 2025, an increase of 11% from 2024 levels, reflecting strong drilling results from the Company's multilateral wells.

Canadian Natural's highly successful multilateral drilling program continues to unlock opportunity on our 3 million net acres of high quality land throughout our primary heavy crude oil assets.

Operating costs in the Company's primary heavy crude oil operations averaged $16.68/bbl (US$11.93/‍bbl) in 2025, a decrease of 8% from 2024 levels, primarily reflecting lower operating cost multilateral production.

Pelican Lake production averaged 42,470 bbl/d in 2025, a decrease of 5% from 2024 levels, reflecting the low natural field declines from this long life low decline asset.

Operating costs at Pelican Lake averaged $9.24/bbl (US$6.61/bbl) in 2025, comparable to 2024 levels.

North America light crude oil and NGLs production averaged 163,957 bbl/d in 2025, an increase of 43% or approximately 50,000 bbl/d from 2024 levels, primarily reflecting opportunistic acquisitions and strong drilling results.

Operating costs in the Company's North America light crude oil and NGLs operations averaged $12.39/‍bbl (US$8.87/bbl) in 2025, a decrease of 9% from 2024 levels, primarily reflecting higher production volumes.

Record North America natural gas production was achieved in 2025, averaging 2,538 MMcf/d, an increase of 19% from 2024 levels, primarily reflecting opportunistic acquisitions and strong drilling results in the Company's liquids-rich natural gas assets.

North America natural gas operating costs averaged $1.11/Mcf in 2025, a decrease of 7% from 2024 levels, primarily reflecting higher production volumes and cost efficiencies. 

 

International Exploration and Production

International E&P crude oil production volumes averaged 11,672 bbl/d in 2025, a decrease of 52% compared to 2024 levels. The decrease reflects temporary suspension of production at Baobab in Offshore Africa due to the planned refurbishment of its floating production storage and offloading ("FPSO") vessel which is expected to return to service in Q2/26, planned decommissioning activities in the North Sea and natural field declines.

MARKETING

Canadian Natural has a balanced and diverse product mix of SCO, light crude oil, NGLs, heavy crude oil, bitumen and natural gas, complemented with a balanced and diverse marketing strategy.

Canadian Natural has total contracted crude oil transportation capacity of 256,500 bbl/d, consisting of committed volumes to Canada's west coast and to the United States Gulf Coast, being approximately 21% of 2026 forecasted liquids production. The egress supports Canadian Natural's long-term sales strategy by targeting diverse refining markets which drive stronger netbacks while also reducing exposure to egress constraints.

The North West Redwater refinery, 50% owned by the Company, primarily utilizes bitumen as feedstock, with production of ultra-low sulphur diesel and other refined products averaging 68,139 bbl/d in 2025.

Canadian Natural has a diversified natural gas marketing strategy with the Company in 2026 to consume the equivalent of approximately 31% of forecasted natural gas production in its Oil Sands Mining and Upgrading and thermal operations, with approximately 37% targeted to be sold at AECO/Station 2 pricing, and approximately 32% targeted to be exported to other North American and international markets capturing higher natural gas prices, maximizing value.

Canadian Natural has a long-term natural gas supply agreement with Cheniere Energy, Inc. ("Cheniere") as part of the Sabine Pass Liquefaction Expansion Project where the Company has agreed to sell 140,000 MMBtu/d of natural gas to Cheniere for a term of 15 years, with delivery anticipated to begin in 2030.

Under the terms of the agreement, Canadian Natural will deliver natural gas to Cheniere in Chicago and receive a Japan Korea Marker ("JKM") index price less deductions for transportation and liquefaction.

 

2025 YEAR END RESERVES

Determination of Reserves

For the year ended December 31, 2025, the Company retained IQREs, Sproule International Limited and GLJ Ltd., to evaluate and review all of the Company's proved and proved plus probable reserves. The evaluation and review was conducted and prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook. The reserves disclosure is presented in accordance with NI 51-101 requirements using forecast prices and escalated costs.

The Reserves Committee of the Company's Board of Directors has met with and carried out independent due diligence procedures with the IQREs as to the Company's reserves.

Additional reserves information is disclosed in the Company's Annual Information Form.

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