Canadian Natural Resources Limited Announces 2025 Fourth Quarter and Year End Results

Executive Summary

• Canadian Natural Resources reported record full-year 2025 financial results, generating $10.8 billion in net earnings and $15.5 billion in adjusted funds flow, driven by record production and accretive acquisitions including the 100% ownership of Albian assets.
• The Board approved a 6.4% increase in the quarterly dividend to $0.625 per share (annualized $2.50) and updated the Free Cash Flow Allocation Policy to accelerate share repurchases, lowering the net debt trigger threshold for 75% allocation from $15 billion to $16 billion.
• The company updated its 2026 guidance, increasing production forecasts to 1,615–1,665 MBOE/d while reducing operating capital expenditures by $310 million to $5.99 billion, largely due to the deferral of the $8.25 billion Jackpine mine expansion.

Key Details

• 2025 Annual Financials:
  • Net earnings: $10.8 billion ($5.17 basic EPS).
  • Adjusted net earnings from operations: $7.4 billion ($3.56 basic EPS).
  • Adjusted funds flow: $15.5 billion ($7.39 basic EPS).
  • Cash flows from operating activities: $15.1 billion.
• 2025 Quarterly Financials (Q4):
  • Net earnings: $5.3 billion ($2.55 basic EPS).
  • Adjusted net earnings from operations: $1.7 billion ($0.82 basic EPS).
  • Adjusted funds flow: $3.7 billion ($1.80 basic EPS).
• Dividend & Shareholder Returns:
  • Quarterly dividend increased by ~6.4% to $0.625/share, payable April 7, 2026.
  • Total returns to shareholders in 2025: ~$9.0 billion ($4.9B dividends, $1.4B share repurchases, $2.7B net debt reduction).
  • ~33.5 million shares repurchased and cancelled at a weighted average price of $43.28.
  • Normal Course Issuer Bid (NCIB) renewed for up to 10% of public float (March 13, 2026 – March 12, 2027).
• Free Cash Flow Allocation Policy Update (Effective Jan 1, 2026):
  • Net debt at/above $16B: 60% FCF to share repurchases, 40% to balance sheet.
  • Net debt between $13B and $16B: 75% FCF to share repurchases, 25% to balance sheet.
  • Net debt at/below $13B: 100% FCF to share repurchases.
• Production & Reserves:
  • Record 2025 annual production: 1,571 MBOE/d (+15% YoY).
  • Record 2025 annual liquids production: 1,146 Mbbl/d (+14% YoY).
  • Year-end 2025 Total Proved Reserves: 15.91 billion BOE (+4% YoY).
  • Year-end 2025 Total Proved Plus Probable Reserves: 20.75 billion BOE (+3% YoY).
  • Reserves Life Index (RLI): 31 years (Proved), 40 years (Proved + Probable).
  • FD&A costs: $3.64/BOE (Proved), $2.42/BOE (Proved + Probable).
• 2026 Guidance & Capital Budget:
  • Updated 2026 Production Guidance: 1,615 – 1,665 MBOE/d (previously 1,590 – 1,650 MBOE/d).
  • Updated 2026 Operating Capital Expenditures: $5.99 billion (reduced by $310 million from budget).
  • Total 2026 Capital Expenditures: $6.88 billion (includes $765 million in net acquisitions).
  • Deferral of Jackpine mine expansion ($8.25B) due to regulatory uncertainty on carbon pricing/methane.
• Operational Highlights:
  • Oil Sands Mining & Upgrading: Record 565,102 bbl/d SCO; operating costs $22.66/bbl.
  • Thermal In Situ: Record 275,086 bbl/d bitumen; operating costs $11.09/bbl.
  • Conventional E&P: 294,315 bbl/d liquids; operating costs $16.68/bbl (heavy), $12.39/bbl (light/NGLs).
  • Natural Gas: Record 2,538 MMcf/d; operating costs $1.11/Mcf.
  • International: Crude oil production averaged 11,672 bbl/d (down 52% due to Baobab FPSO refurbishment and North Sea decommissioning).
• Balance Sheet:
  • Net debt reduced by ~$2.7 billion to ~$16 billion at year-end 2025.
  • Liquidity: ~$6.3 billion.
  • Debt to Book Capitalization: 26%.
  • Debt to Adjusted EBITDA: 0.7x.
  • US$ WTI breakeven: Low to mid-$40 per barrel.

Notable Quotes

• Scott Stauth, President: "The year 2025 was the best operational year in the Company's long history of maximizing value for our shareholders. We set several production records, lowered our operating costs and capital expenditures came in under our forecast... As a result, we achieved record annual production of 1,571 MBOE/d in 2025, resulting in year-over-year growth of 15%... We also achieved record annual liquids production of 1,146 Mbbl/d."
• Victor Darel, CFO: "In 2025, we generated adjusted net earnings of $7.4 billion or $3.56 per share, and adjusted funds flow of $15.5 billion or $7.39 per share... Subsequent to year end, the Board approved an approximate 6.4% increase to our quarterly dividend, bringing the annualized dividend up to $2.50 per common share. This marks 2026 as the 26th consecutive year of dividend increases by Canadian Natural, with a compound annual growth rate ("CAGR") of 20% over that time..."