CNQ Canadian Natural Resources Ltd

On Jan 9, 2014, independent exploration and production (E&P) company, Canadian Natural Resources Ltd. (CNQ) reported that it has annulled the divestiture of a portion of its natural gas resources in British Columbia-based Montney Formation.

Canadian Natural was seeking prospective buyers for its Montney Shale holdings since March last year. However, the company did not receive any suitable offer and hence, has decided to retain the assets.

Canadian Natural believes its Montney acreage has roughly 6.7 trillion cubic feet of gas equivalent of natural gas reserves.

The news was out in the company’s press release on Jan 9, 2014 after the market closed. The stock opened at $32.52 the next day, almost flat with Thursday’s closing price. Hence, we can conclude that investors have not reacted to the news.

Calgary, Alberta-based Canadian Natural is engaged in the acquisition, development and exploitation of crude oil and natural gas properties. It is one of the largest E&P companies in Canada, with extensive heavy crude oil and natural gas developments. The company is also a major oil sands player with a number of projects in its inventory.  

However, environmental organizations argue that oil sands crudes are greenhouse-gas intensive, thereby aggravating global warming. As such, there are numerous laws regulating Canada’s oil sands development in an attempt to stem global climate change and meet the country’s emission-reduction goals. These policies could impact the future profitability of the company’s oil sand business.

Currently, Canadian Natural holds a Zacks Rank #3 (Hold), implying that it is expected to perform in-line with the broader U.S. equity market over the next one to three months.

Meanwhile, one can look at better-ranked players in the oil and gas E&P sector like ARC Resources Ltd. (AETUF), Crescent Point Energy Corp. (CSCTF) and Bellatrix Exploration Ltd. (BXE). ARC and Crescent sport a Zacks Rank #1 (Strong Buy), while Bellatrix carries a Zacks Rank #2 (Buy).
 

 
ARC RESOURCES (AETUF): Get Free Report
 
BELLATRIX EXPLR (BXE): Get Free Report
 
CDN NTRL RSRCS (CNQ): Free Stock Analysis Report
 
CRESCENT PT EGY (CSCTF): Get Free Report
 
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