CALGARY, ALBERTA (NYSE: CNQ) ("Canadian Natural") is pleased to
provide its regular quarterly update on the Horizon Oil Sands
Project ("Horizon Project").
Commenting on fourth quarter progress on the Horizon Oil Sands
Project, Real Doucet, Sr. Vice President, Oil Sands stated, "We
achieved 90% completion of the Horizon Project by year-end 2007, a
major accomplishment, which remains on track for first oil in the
third quarter of 2008. The remaining 10%, however, is in many ways
the toughest as it is the most labour intensive portion of the
Horizon Project. Unfortunately, mid to late January and early
February saw a significant deterioration in labour productivity on
the construction site as much colder than normal weather seriously
curtailed activity. The weather also affected the commissioning
schedule of certain plants; however, at present this is not
expected to have any impact on our targeted completion of Phase
1."
"As of December 31, 2007 our forecasted total costs of the
Horizon Project were at 13.4% over our $6.8 billion Board of
Directors authorization. We just completed a thorough review of the
productivity that we have recently experienced at the Horizon
Project construction site and have determined that should no
improvements in productivity be achieved through the remainder of
construction, then the cost estimate for Phase 1 of the Horizon
Project would need to be increased to 28% above the original $6.8
billion Board authorization. If we can regain targeted labour
efficiencies and productivity, this overage could be reduced to
approximately 25% above the original $6.8 billion Board
authorization. This range of outcomes will result in an on-stream
cost of less than $80,000 bbl/d of capacity, including the benefits
of the significant pre-build capital invested for Phase 2/3.
In the fourth quarter of 2007, we reached many significant
milestones including completion of the tailings pond, filling of
the raw water pond and preparing two tanks to receive start-up
diluent in January. We have experienced minor slippage in certain
non-critical path plants where mechanical completion has moved from
the end of the second quarter to early in the third quarter -
having no expected impact however on targeted Project completion.
Our critical path plants, Delayed Coker / Diluent Recovery Unit and
Hydrotreater remain on track for first oil in the third quarter of
this year.
In parallel with completing major systems, we are getting ready
for operations. Our rate of operations hiring and training has
gained significant momentum with 100% of Mining, 89% of Bitumen
Extraction, 80% of Upgrading and 76% of Utilities and Offsites
staffing requirements hired to date. We have also now awarded all
of the maintenance contracts, with these contractors immediately
mobilizing to site in the last part of the fourth quarter of
2007.
We remain focused on timely completion of Phase 1, while getting
ready to operate the new facilities. Meanwhile, following Board
authorization to proceed with Tranche 2 of our next expansion, we
were immediately able to award a contract for an additional Ore
Prep Plant to an existing contractor that is performing well. In
addition, other long lead equipment (Coke Drums and Reactors) for
Phase 2/3 will be delivered to site during the first quarter of
2008, as we look forward to successful construction and completion
of future phases."
PROJECT STATUS SUMMARY
September 30, December 31, March 31,
2007 2007 2008
Q4/07 Original Q1/08 Original
Actual Actual Forecast Plan Forecast Plan
------ ------ -------- -------- -------- --------
Phase 1 - Work
progress
(cumulative) 84% 90% 90% 94% 95% 97%
Phase 1 - Construction
capital spending(1) 89% 99% 99% 92% 110% 97%
(cumulative)
(1) Relative to overall Phase 1 project capital of $6.8 billion
Accomplished to the end of the Fourth Quarter of 2007
Detailed Engineering
- Overall detailed engineering 98.5% complete and substantially
complete in most areas.
Procurement
- Overall procurement progress is 99% complete.
- Awarded over $5.6 billion in purchase orders and contracts to
date.
- Only one significant contract remains to be awarded for Phase
1 - mechanical for Sulphur Blocking.
- Commenced receipt and site assembly of Mine Operations
Equipment (Shovels and Heavy Haul Trucks).
- Operations and maintenance service and supply agreements have
been awarded.
Modularization
- Delivered an additional 54 oversized loads to site for a total
of 1,560 loads, representing approximately 94% of the total
requirement. Remaining deliveries consist primarily of the balance
of required Mine Operations Equipment (Shovels and Heavy Haul
Trucks).
Construction
- Overall construction progress is 85% complete.
- Mine overburden removal has moved 49.9 million bank cubic
meters, which represents approximately 72% of the total to be moved
and is 0.6 million bank cubic meters ahead of schedule.
- Main Control Room Distributed Control Systems equipment
powered and tested.
- Commissioned 260kV Transmission line and turned over to
operations.
- Commissioned Raw Water Pumphouse and turned over to
operations.
- Completed reformer erection in Hydrogen Plant.
- Completed installation and pre-commissioning of CPI Separator
Building.
- Completed the closure of Dyke 10 (external tailings pond) in
Mining.
- Completed erection of Crushing Plants and conveyors in Ore
Preparation Area.
- Completed Primary Separation Cells in Extraction.
- Completed construction of Main Laboratory.
Milestones for the First Quarter of 2008
- Mechanically Complete Extraction Plant.
- Mechanically Complete Froth Treatment Plant.
- Mechanically Complete Amine Plant.
- Complete Auxiliary Boiler installation in Cogeneration.
- Complete Piping in Heat Integration.
Plant and System Commissioning Schedule
Completed
- Permanent Potable Water Treatment
- Permanent Sewage Treatment
- Natural Gas Pipeline
- Raw and Recycled Water Pipelines
- River Water Intake and Pumphouse
- Raw Water Pond and Pumphouse
- Recycle Water Pond and Pumphouse
- Electrical Distribution System
Q1 2008
- Tanks 11 and 12 completed for early diluent fill
- Main Piperack
- Instrument and Utility Air System
- Flare System
Q2 2008
- Cogeneration
- Cooling and Heating
- Delayed Coker / Diluent Recovery Unit
- Gas Treating and Sulphur Recovery
- West Tank Farm (inter plant)
- Sulphur Block Pipelines
- Synthetic Crude Oil Pipeline
Q3 2008
- Ore Preparation Plant
- Extraction
- Froth Treatment
- Pipeline Corridors
- Hydrogen Plant
- Hydrotreater
- East Tank Farm (product)
A picture gallery providing visual updates on construction
progress is available on the Company's website
(http://www.cnrl.com/horizon/about_horizon/photo_gallery.html).
CONFERENCE CALL
A conference call will be held at 7:30 a.m. Mountain Time, 9:30
a.m. Eastern Time on Tuesday, February 12, 2008. The North American
conference call number is 1-866-540-8136 and the outside North
American conference call number is 001-416-340-8010. Please call in
about 10 minutes before the starting time in order to be patched
into the call. The conference call will also be broadcast live on
the internet and may be accessed through the Canadian Natural
website at www.cnrl.com.
A taped rebroadcast will be available until 6:00 p.m. Mountain
Time, Tuesday, February 19, 2008. To access the postview in North
America, dial 1-800-408-3053. Those outside of North America, dial
001-416-695-5800. The passcode to use is 3252546.
WEBCAST
This call is being webcast by Vcall and can be accessed on
Canadian Natural's website at
www.cnrl.com/investor_info/calendar.html.
The webcast is also being distributed over PrecisionIR's
Investor Distribution Network to both institutional and individual
investors. Investors can listen to the call through www.vcall.com
or by visiting any of the investor sites in PrecisionIR's
Individual Investor Network.
2007 FOURTH QUARTER RESULTS
The Company's results for the fourth quarter of 2007 will be
released on February 28, 2008. A conference call will be held on
that day at 9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time.
Canadian Natural is a senior oil and natural gas production
company, with continuing operations in its core areas located in
Western Canada, the U.K. portion of the North Sea and Offshore West
Africa.
Forward-Looking Statements
Certain statements in this document or documents incorporated
herein by reference for Canadian Natural Resources Limited (the
"Company") constitute "forward-looking statements" within the
meaning of the United States Private Securities Litigation Reform
Act of 1995. These forward-looking statements can generally be
identified as such because of the context of the statements
including words such as the Company "believes", "anticipates",
"expects", "plans", "estimates", "targets", or words of a similar
nature.
The forward-looking statements are based on current expectations
and are subject to known and unknown risks, uncertainties and other
factors that may cause the actual results, performance or
achievements of the Company, or industry results, to be materially
different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such
factors include, among others: general economic and business
conditions which will, among other things, impact demand for and
market prices of the Company's products; foreign currency exchange
rates; economic conditions in the countries and regions in which
the Company conducts business; political uncertainty, including
actions of or against terrorists, insurgent groups or other
conflict including conflict between states; industry capacity;
ability of the Company to implement its business strategy,
including exploration and development activities; impact of
competition; availability and cost of seismic, drilling and other
equipment; ability of the Company to complete its capital programs;
ability of the Company to transport its products to market;
potential delays or changes in plans with respect to exploration or
development projects or capital expenditures; ability of the
Company to attract the necessary labour required to build its
projects; operating hazards and other difficulties inherent in the
exploration for and production and sale of crude oil and natural
gas; availability and cost of financing; success of exploration and
development activities; timing and success of integrating the
business and operations of acquired companies; production levels;
uncertainty of reserve estimates; actions by governmental
authorities; government regulations and the expenditures required
to comply with them (especially safety and environmental laws and
regulations); asset retirement obligations; and other circumstances
affecting revenues and expenses. Our domestic operations are
subject to governmental risks that may impact our operations. Our
domestic operations have been, and at times in the future may be
affected by political developments and by federal, provincial and
local laws and regulations such as restrictions on production,
changes in taxes, royalties and other amounts payable to
governments or governmental agencies, price or gathering rate
controls and environmental protection regulations. The impact of
any one factor on a particular forward-looking statement is not
determinable with certainty as such factors are interdependent upon
other factors, and the Company's course of action would depend upon
its assessment of the future considering all information then
available.
Statements relating to "reserves" are deemed to be
forward-looking statements as they involve the implied assessment
based on certain estimates and assumptions that the reserves
described can be profitably produced in the future.
Readers are cautioned that the foregoing list of important
factors is not exhaustive. Although the Company believes that the
expectations conveyed by the forward-looking statements are
reasonable based on information available to it on the date such
forward-looking statements are made, no assurances can be given as
to future results, levels of activity and achievements. All
subsequent forward-looking statements, whether written or oral,
attributable to the Company or persons acting on its behalf are
expressly qualified in their entirety by these cautionary
statements. Except as required by law, the Company assumes no
obligation to update forward-looking statements should
circumstances or Management's estimates or opinions change.
Contacts: Canadian Natural Resources Limited Allan P. Markin
Chairman (403) 514-7777 (403) 514-7888 (FAX) Canadian Natural
Resources Limited John G. Langille Vice-Chairman (403) 514-7777
(403) 514-7888 (FAX) Canadian Natural Resources Limited Steve W.
Laut President and Chief Operating Officer (403) 514-7777 (403)
514-7888 (FAX) Canadian Natural Resources Limited Douglas A. Proll
Chief Financial Officer and Senior Vice-President, Finance (403)
514-7777 (403) 514-7888 (FAX) Canadian Natural Resources Limited
Corey B. Bieber Vice-President, Finance & Investor Relations
(403) 514-7777 (403) 514-7888 (FAX) Canadian Natural Resources
Limited 2500, 855 - 2nd Street S.W. Calgary, Alberta T2P 4J8 Email:
ir@cnrl.com Website: www.cnrl.com
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