TSX drops after Canadian index edges higher in prior session
CALGARY - Canadian Natural Resources Limited (TSX:CNQ) (NYSE:CNQ) announced Monday it has closed an asset swap with Shell Canada Limited related to the Athabasca Oil Sands Project (AOSP). The energy giant, currently valued at $66.9 billion with shares trading at $32.02, continues to demonstrate strategic growth while maintaining a healthy 5.32% dividend yield for investors.
Under the transaction, Canadian Natural exchanged 10% of its working interest in the Scotford Upgrader and Quest Carbon Capture and Storage facilities for Shell’s remaining 10% working interest in the Albian oil sands mines, associated reserves, and various working interests in other non-producing oil sands leases.
Following the completion of the deal, Canadian Natural now owns and operates 100% of the Albian mines while retaining a non-operated 80% interest in the Scotford Upgrader and Quest facilities. Shell maintains a 20% interest in these facilities and continues as operator of the Scotford Upgrader, which connects to Shell’s wholly owned Scotford refinery.
The transaction, which closed with an effective date of March 1, 2025, did not include cash consideration beyond normal closing adjustments.
The asset swap adds approximately 31,000 barrels per day of bitumen production to Canadian Natural’s portfolio. In light of this addition, the company has updated its 2025 production guidance to between 1,560,000 and 1,580,000 barrels of oil equivalent per day, representing a 15% increase over 2024 production levels. This production boost could further strengthen the company’s financial position, which InvestingPro already rates as "GOOD" with a solid overall financial health score.
Canadian Natural’s 2025 operating capital forecast remains unchanged at approximately $5.9 billion, excluding unbudgeted net acquisition capital of $690 million. The company operates with a moderate debt level, maintaining a debt-to-equity ratio of 0.45 while generating $5.85 billion in levered free cash flow over the last twelve months.
"This is a significant milestone for our Company, enabling more effective and efficient operations between our now 100% owned Horizon and Albian mines," said Scott Stauth, Canadian Natural’s President, in the press release statement.
The company noted that the transaction would enhance its ability to integrate equipment and services across mining operations and unlock further value through continuous improvement initiatives in its Oil Sands Mining and Upgrading business. Trading at a P/E ratio of 11.41, Canadian Natural appears undervalued according to InvestingPro Fair Value estimates. The company has also maintained dividend payments for 25 consecutive years, with current dividend yield at 5.32%. For deeper insights into CNQ’s valuation and comprehensive analysis, investors can access the detailed Pro Research Report, available among 1,400+ top stocks covered on InvestingPro.
In other recent news, Canadian Natural Resources Limited reported its Q2 2025 earnings, surpassing expectations with an earnings per share (EPS) of $0.71. This figure exceeded analyst forecasts of $0.63, marking a 12.7% surprise. The company also reported actual revenue of $8.7 billion, slightly above the anticipated $8.68 billion. These results reflect a strong financial performance for the quarter. Despite the positive earnings report, the stock experienced fluctuations in trading activity. Analysts and investors are closely monitoring these developments. This earnings report highlights Canadian Natural Resources Limited’s ability to perform above market expectations.
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