CALGARY, ALBERTA (NYSE: CNQ) ("Canadian Natural") is pleased to
provide its regular quarterly update on the Horizon Oil Sands
Project ("Horizon Project").
"It is an exciting time for the Horizon Project as we
methodically progress towards first oil targeted for the third
quarter of 2008." commented Rï¿1/2al Doucet, Senior Vice President,
Oil Sands. "In the first quarter, Mine Production commenced
operations, using our mine operators and equipment to work on the
overburden removal. This is the second area of the Horizon Project
where we have begun operations, with water systems being the first,
and represents a significant milestone for Canadian Natural. This
early operation provides tremendous training benefits for our
operators prior to full start up.
We reached an overall 94% completion at the end of the first
quarter of 2008, with craftspeople actively performing hydrotests,
airblows, rotation checks and various pre-commissioning activities.
Our operations teams are walking down the systems in each plant
ensuring they are complete prior to commissioning. We have
energized the last substation on site and the Extraction Plant
started operating on water in late April to ensure there are no
surprises when we begin processing oil sands and extract the
bitumen through these plants.
Commissioning is progressing very well as we have already turned
over and commissioned 96 plant systems (out of an estimated 820),
10 mine haul trucks (out of 23), 2 hydraulic shovels and are
preparing to commission the first electric shovel, all according to
schedule. The balance of the mine equipment will be turned over and
commissioned to support the ramp up of oil sands mining and bitumen
production.
As we move to construction completion, challenges arise on a
regular basis; however due to the strength, experience and depth of
our team we continue to meet and find solutions as we target start
up and synthetic crude oil production in the third quarter of this
year.
At the end of the first quarter, capital spending on Phase 1 of
the Horizon Project was at 111% of the original budget of $6.8
billion. Looking forward to completion, targeted for the third
quarter of 2008, we currently anticipate capital spending on Phase
1 construction to be within the previously announced range of
25%-28% above the original budget.
We have maintained solid progress in our hiring of operators
with 89% of required personnel in place and have finalized all of
our maintenance contracts and mobilized all supervision on site. We
are prepared to start up the plants and have received on site the
190,000 barrels of diluent for start up.
Once we have completed commissioning and begun operations, it is
anticipated that ramp up to full production will occur over a 3 to
4 month period. We are targeting to be at 85% design capacity by
year end 2008. Full capacity is anticipated to be achieved during
Q1/09 as planned.
The sales pipeline which will transport production from the site
to Edmonton is on track for completion in the second quarter of
2008. Approximately 750,000 barrels of synthetic crude oil from
initial production volumes will be used to fill the pipeline.
While our focus remains on completion and startup of Phase 1, we
continue to plan for future expansions. We have received the 2 coke
drums and all components for the 2 hydrotreating reactors that will
be installed as part of the Phase 2/3 expansion."
HORIZON PROJECT STATUS SUMMARY
December 31,
2007 March 31, 2008 June 30, 2008
--------------------------------------------------------
Actual Actual Q1/08 Original Q2/08 Original
Forecast Plan Forecast Plan
--------------------------------------------------------------
Phase 1 - Work
progress
(cumulative) 90% 94% 95% 97% 97% 99%
Phase 1 -
Construction
capital
spending(1)
(cumulative) 99% 111% 110% 97% 122% 100%
(1) Relative to overall Phase 1 project capital of $6.8 billion
Accomplished to the end of the First Quarter of 2008
Procurement
- Site assembly of Mine Operations equipment (Shovels and Heavy
Haul Trucks) is on schedule.
- Fixed Plant Maintenance contractors have mobilized.
Modularization
- All oversized loads for construction have been delivered to
site. Ongoing deliveries of mine equipment (trucks & shovels)
will continue through the summer.
Construction
- Overall construction progress is 91% complete.
- Mine overburden removal has moved 56.7 million bank cubic
meters, which represents approximately 80% of the total to be moved
before start up.
- Completed Tar River Diversion and Fish Habitat
construction.
- Substantially completed Extraction Plant in the first quarter
and have introduced water to the plant in April.
- Completed construction of Tanks 11 and 12 in the East Tank
Farm and filled with diluent for start up.
- Installed 3 nitrogen storage tanks and completed construction
of the Nitrogen Plant, now ready for operations.
- Installed Auxiliary Boiler in Cogeneration.
- Assumed occupancy of Main Warehouse.
- Substations energized for Sulphur Recovery and Gas Treating,
representing the last on-site substations to be energized.
- Substantially completed construction of Amine Plant and moving
into Pre-Commissioning.
- Started construction of Sulphur Pipeline.
- Completed piping in Heat Integration.
Systems Commissioned and Turned Over during the Quarter
- Firewater in both tank farms.
- Tanks 11 and 12.
- Electrical Distribution to Heat Integration, Coker/DRU, Tank
Farms and Froth Treatment.
- Substations in Sulphur and Gas Treating energized.
Commissioning Schedule
Completed To Date
- 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, including all substations
- Tanks 11 and 12 completed for diluent fill
- Main Piperack (air, water, gas, power)
- Instrument and Utility Air System
On Track for Q2 2008
- Extraction
- Flare System
- Cogeneration (steam)
- Cooling and Heating
- Delayed Coker / Diluent Recovery Unit
- Hydrogen Plant
- Gas Treating and Sulphur Recovery
- West Tank Farm (inter plant)
- Sulphur Block Pipelines
- Synthetic Crude Oil (product) Pipeline
On Track for Q3 2008
- Ore Preparation Plant
- Froth Treatment
- Cogeneration (power)
- Pipeline Corridors
- Hydrotreater
- Remainder of 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).
2008 FIRST QUARTER RESULTS
2008 first quarter results are scheduled for release after
market close on Thursday, May 8, 2008. A conference call will be
held on Friday, May 9, 2008 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.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this document or documents incorporated
herein by reference constitute forward-looking statements or
information (collectively referred to herein as "forward-looking
statements") within the meaning of applicable securities
legislation. Forward-looking statements can be identified by the
words "believe", "anticipate", "expect", "plan", "estimate",
"target", "continue", "could" "intend", "may", "potential",
"predict", "should", "will", "objective", "project", "forecast",
"goal", "guidance", "outlook", "effort" "seeks", "schedule" or
expressions of a similar nature suggesting future outcome or
statements regarding an outlook. 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.
There are numerous uncertainties inherent in estimating quantities
of proved crude oil and natural gas reserves and in projecting
future rates of production and the timing of development
expenditures. The total amount or timing of actual future
production may vary significantly from reserve and production
estimates. In addition, these statements are not guarantees of
future performance and are subject to certain risks and the reader
should not place undue reliance on these forward-looking statements
as there can be no assurance that the plans, initiatives or
expectations upon which they are based will occur.
The forward-looking statements are based on current
expectations, estimates and projections about Canadian Natural
Resources Limited (the "Company") and the industry in which the
Company operates, which speak only as of the date such statements
were made or as of the date of the report or document in which they
are contained and are subject to known and unknown risks,
uncertainties and other factors that could cause the actual
results, performance or achievements of the Company 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; volatility
of and assumptions regarding crude oil and natural gas prices;
fluctuations in currency and interest rates; assumptions on which
the Company's current guidance is based; 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; the Company's defense of
lawsuits; availability and cost of seismic, drilling and other
equipment; ability of the Company and its subsidiaries to complete
its capital programs; the Company's and its subsidiaries' ability
to secure adequate transportation for its products; unexpected
difficulties in mining, extracting or upgrading the Company's
bitumen products; 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 thermal and oil sands mining 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; the Company's and its subsidiaries' success of
exploration and development activities and their ability to replace
and expand crude oil and natural gas reserves; timing and success
of integrating the business and operations of acquired companies;
production levels; imprecision of reserve estimates and estimates
of recoverable quantities of crude oil, bitumen, natural gas and
liquids not currently classified as proved; actions by governmental
authorities; government regulations and the expenditures required
to comply with them (especially safety and environmental laws and
regulations and the impact of climate change initiatives on capital
and operating costs); asset retirement obligations; the adequacy of
the Company's provision for taxes; and other circumstances
affecting revenues and expenses.
Certain of these factors are discussed in more detail under the
heading "Risk Factors". The Company's 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.
Should one or more of these risks or uncertainties materialize, or
should any of the Company's assumptions prove incorrect, actual
results may vary in material respects from those projected in the
forward-looking statements. 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.
Readers are cautioned that the foregoing list of important
factors is not exhaustive. Unpredictable or unknown factors not
discussed in this report could also have material adverse effects
on forward-looking statements. 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) 517-7370 (FAX) Canadian Natural
Resources Limited John G. Langille Vice-Chairman (403) 514-7777
(403) 517-7370 (FAX) Canadian Natural Resources Limited Steve W.
Laut President and Chief Operating Officer (403) 514-7777 (403)
517-7370 (FAX) Canadian Natural Resources Limited Douglas A. Proll
Chief Financial Officer and Senior Vice-President, Finance (403)
514-7777 (403) 517-7370 (FAX) Canadian Natural Resources Limited
Corey B. Bieber Vice-President, Finance & Investor Relations
(403) 514-7777 (403) 517-7370 (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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