The stock was up $1.46 at $32.03 in afternoon trading on the Toronto Stock Exchange even as it reported lower second-quarter profits.
The Calgary-based company said overall capital spending for the year is being reduced some $680 million, or about 10 per cent, to $6.7 billion.
Most of the cuts will be at Canadian Natural's (TSX:CNQ) Horizon oilsands expansion and in North American natural gas.
The mid-point of Canadian Natural's target production range for oil and natural gas liquids is now 464,000 barrels per day, compared to the 460,000 barrels it had forecast during the first quarter.
In the previous quarter, Canadian Natural also forecast natural gas production of between 1.22 billion and 1.26 billion cubic feet per day, but now the top end of the range has been lowered to 1.24 billion as the company redirects more of its money toward more lucrative heavy oil developments.
"Canadian Natural's ability to quickly and effectively reallocate capital and at the same time increase production confirms the strength of Canadian Natural's assets, our capital flexibility, the effectiveness of our strategies and the ability of our teams to effectively execute," said chief operating officer Steve Laut on a conference call with analysts.
"Few, if any companies in our peer group, can effectively reduce capital spending and deliver a production increase."
Capital spending on an expansion to the Horizon oilsands mine north of Fort McMurray, Alta., is expected to be just over $1.5 billion this year, some $330 million below budget.
Laut said that's mainly due to Canadian Natural's strategy of tackling the project in small pieces that can be easily stopped and restarted, as economic conditions warrant. That contrasts with the mega-project mentality Canadian Natural had in building the first phase of the mine, which came in significantly over budget.
Just under a third of the lower capital spending this year is from cost-savings. The rest is capital that has been deferred to the future, as the company takes extra time to pore over its contracts to make sure it's getting the lowest costs possible.
"We are not schedule-driven," said Laut. "We're cost driven."
The CEO of fellow oilsands miner Suncor Energy Inc. (TSX:SU) made similar remarks in discussing that company's second-quarter results a few weeks ago. Steve Williams told analysts Suncor is willing to push back schedules of its oilsands expansions in order drive down costs.
Canadian Natural continues to be bearish on natural gas, taking $110 million in gas spending out of its 2012 capital plan.
During the second quarter it halved its drilling program to 35 wells and proactively shut in 20 million cubic feet per day of gas.
Overall production at Canadian Natural during the quarter was 679,607 barrels of oil equivalent per day.
Quarterly crude oil and liquids production averaged 470,523 barrels per day, an increase of 34 per cent from the same quarter a year earlier. Production at Horizon was 115,823 barrels per day, back to normal levels after a five-week outage earlier in the year.
Natural gas production was 1.26 billion cubic feet, a one per cent increase from a year earlier.
Canadian Natural reported Thursday a profit of $753 million, or 68 cents per share, down from $929 million, or 84 cents per share, in the same period last year.
Adjusted earnings for the quarter were $606 million or 55 cents per share compared with $621 million of 57 cents per share in the same period last year. That beat the 53 cents per share average that analysts polled by Thomson Reuters had been expecting.
Revenue totalled $3.83 billion, down from $3.33 billion a year ago.
Canadian Natural is one of Canada's biggest oil and natural gas producers, with the bulk of its operations in Western Canada.Suggest a correction