North Sea oil and gas firm Canadian Natural Resources (CNR) will boost its drilling programme in the basin after stating it was “is now a more robust and sustainable company”.
The Calgary-based firm added that economic investment in the North Sea has become “more viable” due to “changes in the United Kingdom’s tax regime in 2016”.
CNR said its spending in its international operations, including offshore Africa, would be similar to that of 2016 at around CDN$420million (£253million). This includes an estimated £114million for decommissioning of the Murchison field and “other abandonments”.
CNR is owner and operator of the Murchison field, off Shetland, where decomissioning started in late 2013.
The Murchison field was discovered in 1975.
It plans to forge ahead with three North Sea wells in 2017 which is good news for the basin, having suffered from record low exploration and appraisal activity in the wake of the oil price crash.
CNR president Steve Laut bullishly hailed CNR’s “robustness” as the firm revealed it would shave $1billion from costs as investment in a major oil sands project north of Fort McMurray, Canada, comes to its final phase and comes on stream by the end of the year.
As a result, the company said it is targeting 6% production growth in 2017 with a capital program of £2.3billion “well below targeted cash flow, generating free cash flow” of around £1billion, it said.
Mr Laut added: “Canadian Natural will take a balanced approach on how we allocate free cash flow between enhancing balance sheet strength, increasing returns to shareholders, investing in economic resource development and opportunistic acquisitions.”
It said its North Sea operating costs are expected to continue to improve in 2017 and are targeted to be in the range of $33 to $36 per barrel in 2017.
The company’s other UK North Sea interests include stakes in the Ninian, Lyell, Columba, Banff, Kyle, Tiffany, Toni and Thelma fields.
Last month the group reported third quarter pre-tax losses of £354million, compared with losses of about £59million a year ago, on revenue down by 25% at £1.4billion.
Recommended for you
