Oil and natural gas company Canadian Natural Resources (TSX: CNQ) (NYSE: CNQ) announced Thursday its budget for 2011, with plans to spend between $5.6-$6.0 billion in capital during the year, and to increase production volumes of oil equivalent by 6% year-over-year.
The company, which operates in Western Canada, the UK portion of the North Sea and offshore West Africa, said that next year's capital expenditures are an increase from the $5.6 billion forecast in 2010, primarily a result of the planned 52-64% boost in monies planned for crude oil and natural gas expenses in North America, including the expansion project at Horizon Oil Sands in Alberta.
Approximately 45%, or between $2.4-$2.8 billion, of capital expenditures in 2011 are being allocated to projects that will result in "long-term production growth beginning in 2012 and beyond", it added.
"Canadian Natural's 2011 budget reflects our strong asset base and a continued focus on projects that provide the best returns for shareholders," said chairman Allan Markin.
The production target for barrels of oil equivalent was estimated at between 645,000 boe/d to 694,000 boe/d before royalties for 2011, representing a midpoint increase of 6% from the midpoint of the 2010 forecasted annual average production guidance.
The company's crude oil and NGLs production target was set at between 449,000 bbl/d to 486,000 bbl/d before royalties - a midpoint increase of 10% from the midpoint a year earlier - primarily reflecting increased production volumes of primary heavy crude oil and improved reliability from its Horizon Oil Sands, with plans to increase production volumes by 19% at the site from 2010.
However, Canadian Natural also said that the overall increase in crude oil and NGLS production will be partially offset by declines in natural gas production targets on offshore West Africa and the North Sea.
For 2011, cash flow from operations is targeted to be between $7.0 billion and $7.4 billion, or$6.40 - $6.75 per common share.
Separately, the company also announced Thursday that its monthly production of synthetic crude oil at Horizon Oil Sands was 107,900 bbl/d in November, compared with 83,809 bbl/d in the third quarter and 87,600 bbl/d a month earlier.
This was a result of the better-than-expected recovery of the Pressure Swing Adsorption (NYSE:PSA) beds, but the perfomance of the beds will continue to be closely monitored. Though, the likelihood of a complete shut down of the unit has reduced significantly, the oil and gas company said.
Canadian Natural continues to target fourth quarter production of between 90,000 bbl/d and 100,000 bbl/d, and overall annual production of between 90,000 bbl/d and 93,000 bbl/d.
The company was up more than 3% on Thursday, trading at $41.79 as of 12:12pm EST.