The Calgary-based oil and gas producer (TSX:CNQ) has set a budget of $6.9 billion for next year, a nearly $500 million increase over what it expects to spend in 2012.
"Our 2013 budget reflects the strength and breadth of our assets," said president and chief operating officer Steve Laut in a release.
"Our capital program is balanced in allocation to near term growth and longer term growth that will support and drive sustainable free cash flow in 2013 and beyond."
Canadian Natural is calling for 482,000 to 513,000 barrels per day of crude oil and natural gas liquids output in 2013, a nine per cent increase from the midpoint of its 2012 expectations.
Production of dry natural gas, which has been fetching low prices lately, is expected to drop nine per cent as Canadian Natural continues to invest in higher-return oil and NGL projects.
"When gas prices strengthen, Canadian Natural is in great shape," Laut told analysts on a conference call to discuss the company's 2013 plans.
The company is the second-largest natural gas producer in Canada, has a vast land base and controls much of the infrastructure near its assets.
Canadian Natural forecasts total 2013 production of 663,000 to 704,000 barrels per day, a three-per cent midpoint increase from this year's guidance.
The biggest increase in the company's capital budget is at its Horizon oilsands mining project, which will see its spending rise to $2.55 billion next year from $1.68 billion in 2012.
The mine north of Fort McMurray, Alta., is being expanded in phases to eventually produce 250,000 barrels of refinery-ready crude per day. So far, projects under construction are coming in below budget.
Horizon production is slated to increase by 10,000 barrels per day in 2015, 45,000 barrels in 2016 and 80,000 barrels in 2017.
Canadian Natural expects to spend about $2 billion to $2.5 billion at Horizon each year for the next five years until the expansion is complete.
"We are very happy with the execution of the project to this point," said Laut.
"Canadian Natural maintains a flexible schedule for the construction to ensure capital efficiencies."
Production at Horizon next year is expected to be between 100,000 and 108,000 barrels, which takes into account an 18-day period of planned maintenance work scheduled for May.
About $1.3 billion — roughly $200 million less than this year — will be spent on in-situ oilsands projects, which use steam to soften the bitumen.
Canadian Natural has cut about $100 million from its budget for property acquisitions, which drops to $85 million.
A total of $3.015 billion — $65 million less than last year — will be spent on other oil and gas operations.
That includes $1.9 billion budgeted for North American crude exploration and production, $605 million for international crude and $445 million for natural gas.
Canadian Natural shares were off nearly three per cent to close at $27.43 Tuesday on the Toronto Stock Exchange.Suggest a correction