- Canadian Natural Resources' (CNQ +1.1%) pledge to keep spending on expanding output at its biggest oil sands mine regardless of the price of crude shows that Canadian oil sands operators are intent on maintaining their production thanks to huge upfront costs, long-term breakeven points and lengthy production lives, continuing to add to the global oil glut, WSJ reports.
- CNQ said yesterday that it still expects overall output to grow beyond 2014 levels, and that it will continue expanding production because it expects higher volume will cut operating expenses at its Horizon mine - currently C$37.13/bbl - by at least another C$10/bbl.
- Existing oil sands surface mines can make money at ~$30/bbl, and the most efficient underground oil sands projects run by Cenovus Energy (CVE -1%) can stay profitable at $35/bbl, according to the report.
- Suncor (SU +1.9%) CEO Steve Williams said in November that his company’s strong balance sheet would allow it to ride out the turbulence and stick with a bullish growth strategy.