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After reporting a loss for the second quarter and a decline in output, Canadian Natural Resources said it was on the verge of an “inflection point.”
One of the larger companies in Canada, the company reported a loss for the second quarter of $259 million, compared with a loss of $310 million during the same quarter last year. Cash flow declined from $1.1 billion last year to $718 million as the price for crude oil lost about 20 percent of its value of the course of the year.
Canadian Natural joins most of its peer companies in adjusting to an era of lower crude oil prices. Canada’s whole oil sector was impacted further this year by May wildfires in Alberta that shut in about 1 million barrels per day worth of total production.
Corey Bieber, the chief financial officer at the company, said the company was able to enact cost control measures and raise its production forecast for the year, thanks in part to the pending start of operations at additions to its Horizon oils sands facility, which was largely spared by wildfires.
“Canadian Natural is nearing an inflection point, with the completion of Horizon Phase 2B,” he said in a statement. “Upon completion, decreased project capital expenditures, coupled with greater cash flow generation potential, significantly enhances our ability to strengthen our balance sheet, maximize returns to shareholders, invest in economic resource development and execute on opportunistic acquisitions.”
For the second quarter, the company said total production was around 784,000 barrels of oil equivalent per day, down 7 percent from last quarter and 3 percent lower year-on-year. The declines were attributed to everything from pipeline issues to declines in capital spending.
Lower oil prices means less capital is available for companies to spend on drilling. In April, the Canadian Association of Petroleum Producers estimated capital spending in the sector was on pace to decline 62 percent from 2014 levels to $24 billion, the largest two-year decline since record-keeping began in 1947.