Canadian Natural Resources Limited Announces Record Quarterly Cash Flow, 2006 Budget and Strategic Investment Plans

Business Wire, Nov 2, 2005

CALGARY, Alberta -- Canadian Natural Resources Limited (TSX:CNQ)(NYSE:CNQ):

In commenting on the third quarter 2005 results and the Company's defined growth plan, Canadian Natural's Chairman, Allan Markin, stated "Canadian Natural is in an enviable position. We have a strong asset base and a strong core of technical, operational and financial expertise to unlock the value of these assets as well as the Balance Sheet capacity to finance it. Today, we are announcing our long-term plan to unlock the potential of our vast oil sands assets and in so doing will create significant value for our shareholders. Our plan calls for the evaluation of the combination of Horizon Project Phases 2 and 3 into one combined Project as well as the planned expansion of a further 265,000 bbl/d of Synthetic Crude Oil production from Phases 4 and 5 of the Horizon Project. In addition, we have articulated plans to review the feasibility of constructing a 125,000 bbl/d heavy oil upgrader near our in-situ oil sands developments. This provides additional markets for our heavy oil production and captures a significant portion of the heavy oil value chain. Execution of this strategic plan will allow Canadian Natural to develop its vast oil sands in-situ potential with plans to bring on an incremental 240,000 bbl/d of thermal heavy oil over the next 10-15 years. Management's vision is to build a balanced, sustainable lower-risk exploitation based enterprise and we believe that no other Company has the asset base to define such a plan with such clarity. Just as importantly, we have the skill set and team to deliver on that plan."

Steve Laut, President and Chief Operating Officer of Canadian Natural added, "We have a clearly defined, low-risk plan and the key to value creation is the successful low cost execution of that plan, on a quarter by quarter, year by year basis. The third quarter was a tremendous example of that. In Canada, our natural gas production increased by 5% over the previous year despite weather challenges. Our thermal crude oil sands development as well as our Pelican Lake waterflood continue to exceed expectations. Internationally, we brought Baobab on-stream in only 4.5 years after initial discovery while our infill program at East Espoir has resulted in 27% production gains on that Field. Our world-class Horizon Project continues on time and on budget and the $400 million of engineering work completed prior to construction is paying dividends, allowing us to contain costs and capitalize on construction opportunities going forward. For 2006 we look for continued production growth in each of our segments and 10% overall, all achieved while maintaining strong financial discipline. Of particular note, in 2006 our West Espoir Field located offshore Cote d'Ivoire will come on stream and we will commence development of the newly acquired Olowi Field located offshore Gabon. In Canada, we expect our Primrose in-situ oil sands production volumes to continue to rise to approximately 80 mbbl/d. Construction expenditures on the Horizon Oil Sands Project are expected to reach $2.6 billion in 2006, with construction progress expected to reach 63% completion by December 2006. All of this is to be financed primarily through cash flow. Expected year end debt to book capitalization at the end of 2006 is targeted at approximately 31%. We are definitely capitalizing on our opportunities while maintaining financial and operational discipline."

HIGHLIGHTS
($ millions, except as noted)
                                                          Nine
                             Quarterly Results        Months Results
                          Q3/05    Q2/05    Q3/04      2005     2004
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Net earnings (loss)     $   151  $   219  $   311   $   (54) $   828
 per common share,
 basic (1)              $  0.28  $  0.41  $  0.58   $ (0.10) $  1.54
Adjusted net earnings
 from operations (2)    $   593  $   460  $   381   $ 1,433  $ 1,084
 per common share,
 basic (1)              $  1.10  $  0.86  $  0.71   $  2.67  $  2.02
Cash flow from
 operations (3)         $ 1,386  $ 1,136  $ 1,041   $ 3,531  $ 2,819
 per common share,
 basic (1)              $  2.58  $  2.12  $  1.94   $  6.58  $  5.26
Capital expenditures,
 net of dispositions    $ 1,272  $   609  $   875   $ 3,253  $ 3,212
Debt to book
 capitalization (4)          32%      35%      33%       32%      33%
Daily production,
 before royalties
 Natural gas (mmcf/d)     1,423    1,454    1,396     1,444    1,381
 Crude oil and NGLs
  (mbbl/d)                334.7    289.1    297.3     304.0    278.1
 Equivalent production
  (mboe/d)                571.9    531.4    529.9     544.7    508.2
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(1) Restated to reflect two-for-one common share split in May 2005.
(2) Adjusted net earnings from operations is a non-GAAP term that the
    Company utilizes to evaluate its performance. The derivation of
    this item is discussed in the MD&A.
(3) Cash flow from operations is a non-GAAP term that the Company
    considers key as it demonstrates its ability to fund capital
    reinvestment and debt repayment. The derivation of this item is
    discussed in the MD&A.
(4) Includes current portion of long-term debt.