CNQ Completes Kirby South Project - Analyst Blog
September 20 2013 - 4:00PM
Zacks
Independent exploration and
production (E&P) company, Canadian Natural Resources
Ltd. (CNQ), announced the achievement of first steam
injection at its Kirby South steam assisted gravity drainage (SAGD)
project.
The company’s 100% owned and operated project was completed much
ahead of its planned steam-in date of Nov 2013 and within the
targeted budget, with the expected addition of production valued at
roughly $34,000 per flowing barrel.
The project is expected to reach production levels of 40,000
barrels per day (bbl/d) by the end of 2014. The company plans to
gradually increase production in the greater Kirby area to
approximately 140,000 bbl/d. The Kirby South project is the first
step of the planned expansion.
The thermal in-situ plan of CNQ includes increasing the company’s
total capacity in an incremental manner – from the current 170,000
bbl/d to approximately 510,000 bbl/d – over a span of 15 years.
Management believes that the Kirby project would strengthen the
company’s asset folio and contribute to cash flow generation in the
near as well as long term.
Calgary, Alberta-based CNQ is engaged in the acquisition,
development and exploration of crude oil and natural gas
properties. Its core operations are focused in western Canada, the
United Kingdom sector of the North Sea and offshore West
Africa.
We appreciate the company’s diverse asset base both geographically
and in terms of products. In addition to the conventional oil and
gas production assets, CNQ is also a major oil sands player with
several projects in inventory. However, the company pursues
long-term projects which require large capital outlay and several
years of development. Also, we remain concerned about the effects
of a steep drop in crude prices on the company.
Currently, CNQ 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 companies in the energy sector such as
Pioneer Southwest Energy Partners L.P. (PSE),
Seacor Holdings Inc. (CKH) and Range
Resources Corporation (RRC) as good investment
opportunities. All the three firms sport a Zacks Rank #1 (Strong
Buy).
SEACOR HLDGS (CKH): Get Free Report
CDN NTRL RSRCS (CNQ): Free Stock Analysis Report
PIONEER SW EGY (PSE): Free Stock Analysis Report
RANGE RESOURCES (RRC): Free Stock Analysis Report
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