Mr. Tim McKay reports

CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES 2024 BUDGET

Canadian Natural Resources Ltd.'s Tim McKay, president, commented on the company's 2024 budget: "Our teams remain focused on safe, reliable, effective and efficient operations throughout our asset base. Our unique and diversified asset base provides us a key competitive advantage as we can manage the pace and timing of development activities to maximize value growth from our assets. As part of our 2024 budget, the drilling program is weighted towards longer-cycle projects in the first half of the year, primarily thermal in situ. During the second half of the year, we will focus on shorter-cycle development opportunities to better align with incremental market egress and potentially improved commodity pricing, maximizing value for our shareholders.

"Our 2024 capital budget is disciplined, targeted at approximately $5.4-billion, as we look to deliver strong returns on capital, resulting in targeted exit 2024 production levels of approximately 1,455 Mboe/d [million barrels of oil equivalent per day], an increase of approximately 40 Mboe/d from targeted exit 2023 production levels, and driving targeted 2025 average annual production growth of approximately 4 per cent to 5 per cent compared to 2024 targeted average annual production levels. Annual production in 2024 is targeted to range between 1,330 Mboe/d and 1,380 Mboe/d, resulting in targeted production per share growth between 3 per cent and 7 per cent when compared to 2023 production per share levels, based upon recent strip pricing.

"We are committed to supporting Canada's climate goals and continuing to reduce our environmental footprint with our aspirational goal of net-zero greenhouse gas (GHG) emissions in the oil sands by 2050, along with our other robust environmental targets. An example of our commitment is at Kirby North, where we are targeting to begin solvent injection at our commercial-scale solvent steam assisted gravity drainage (SAGD) pad development, which targets to reduce GHG intensities by approximately 50 per cent. Our strong track record in research and development (R&D) investment will continue in 2024 and beyond, and is targeted to grow with our participation in the Pathways Alliance and its foundational carbon capture and storage (CCS) project. We believe Canadian energy is one of the most responsibly produced sources of energy in the world and should be the preferred energy choice."

Mark Stainthorpe, Canadian Natural's chief financial officer, continued: "In 2023, we successfully executed on our disciplined capital program, delivering significant free cash flow, driving strong returns to shareholders. We are focused on increasing returns to shareholders, as shown by our most recent quarterly dividend increase in November, 2023, to $1 per common share, making 2024 the 24th consecutive year of dividend increases, and we are nearing our net debt level of $10-billion, targeted for Q1 2024, at which time we will increase returns to shareholders to 100 per cent of free cash flow.

"Our financial position is very strong, with debt to adjusted funds flow of approximately 0.7 times while our net debt level is approaching $10-billion. This net debt level is conservative for a company our size, and is supported by our world-class assets and long-life, high-value reserves. With our prudent 2024 capital budget, low maintenance capital requirements and a long-life, low-decline asset base, we target to deliver strong returns on capital with robust free cash flow, while continuing to provide significant returns to shareholders in 2024."

Two thousand twenty-four budget highlights

Canadian Natural's strategy of maintaining a large, diverse portfolio of high-quality assets, supported by the company's long-life, low-decline assets, enables the company to maximize shareholder value through flexible capital allocation and optimized product mix. Canadian Natural maintains a high ownership level and operatorship in its properties, and has an extensive infrastructure network, allowing it to control the nature, timing and extent of development in each of its project areas.

The company's focus on effective and efficient operations drives high return on capital projects that deliver industry-leading free cash flow. Canadian Natural's ability to be nimble and flexible with capital allocation decisions within its diverse asset base is a significant competitive advantage as it can allocate capital to the highest-return projects without being reliant on any one asset or commodity type, allowing the company to maximize value for its shareholders:

• As part of Canadian Natural's 2024 budget, the drilling program is weighted toward longer-cycle projects in the first half of the year, primarily thermal in situ. In the second half of the year, assuming commodities do not have material price declines in 2024, the program will shift to being weighted toward shorter-cycle development opportunities to better align with incremental market egress, allowing the company to maximize value for its shareholders:
  • The company targets to drill approximately 65 per cent of the total net budgeted conventional exploration and production (E&P) wells during the second half of 2024.
• The company's 2024 capital budget is disciplined, targeted at approximately $5.4-billion, excluding abandonment and reclamation expenditures, and targets to provide near-term production growth in 2024, and mid- and long-term production and capacity growth beyond 2024. Highlights of the 2024 budget include:
  • Canadian Natural is progressing with its highly capital efficient drill-to-fill development strategy across its conventional E&P assets, including the following:
    • Across its extensive liquids-rich natural gas and light crude oil assets in British Columbia and Alberta, the company targets to drill 134 net wells. The program consists of 91 net natural gas wells, of which approximately 70 per cent are targeting the liquids-rich Montney formation and 43 net light crude oil wells.
    • The company is continuing with its successful multilateral heavy crude oil program with a total of 135 net wells targeted to be drilled in 2024, primarily targeting the Mannville/Clearwater formations. Approximately 80 per cent of the multilateral heavy crude oil program is targeted to be completed in the second half of the year.
    • Canadian Natural has a unique and diverse asset base which allows the company to be nimble and adapt quickly to changing market conditions. The company's 2024 budget ensures it has flexibility to manage effective capital allocation through the year.
  • In thermal in situ, the company continues to expand its previously announced highly capital efficient pad-add program, with four additional pads targeted to be drilled in 2024, as outlined below:
    • At Primrose, the company is targeting to drill two CSS pads, which are targeted to come on production in Q2 2025, and one SAGD pad at Wolf Lake, which is targeted to come on production in Q1 2025.
    • At Jackfish, the company is targeting to drill one SAGD pad in 2024, with production from this pad targeted to come on production in Q3 2025.
    • At Kirby North, the company is moving forward with the commercial-scale solvent SAGD pad development, with the objective to increase bitumen production, reduce the steam-to-oil ratio (SOR) by up to 50 per cent and GHG intensity by approximately 40 per cent to 50 per cent, while realizing high solvent recoveries. The company is targeting to begin solvent injection in mid-2024.
  • At the company's Pike thermal in situ asset, the final investment decision to proceed with the Pike 1 project was achieved as part of the company's 2023 capital budget. As part of Canadian Natural's 2024 budget, the company targets drilling and pipeline development activity in late 2024. This Pike 1 project is targeted to add approximately 25,000 bbl/d of low-cost, drill-to-fill production in 2027.
  • The company continues to pursue opportunities to debottleneck and increase production at both Horizon and at the Athabasca oil sands project (AOSP):
    • At Horizon, the company targets to complete the remaining components and tie-ins related to the reliability enhancement project during the planned turnaround in Q2 2024:
      • This project targets to increase capacity of the zero-decline, high-value synthetic crude oil (SCO) production at Horizon over a two-year time frame by shifting the planned turnarounds to once every two years from the current annual cycle. In 2025, Horizon annual production is targeted to increase by approximately 28,000 bbl/d, with the two-year average annual SCO capacity at Horizon targeted to increase by approximately 14,000 bbl/d.
    • At the Scotford upgrader, during the 49-day turnaround in Q4 2024, a debottlenecking project will be completed, which targets to add incremental capacity of approximately 5,600 bbl/d net.
    • At Horizon, the company is progressing its naphtha recovery unit tailings treatment (NRUTT) project that targets incremental production of approximately 6,300 bbl/d of SCO in Q3 2027, for a total capital investment of approximately $350-million, with approximately $48-million in the 2024 budget. This project is targeted to reduce GHG emissions, equivalent to approximately 6 per cent of Horizon's total Scope 1 emissions, and will result in lower reclamation costs over the life of the Horizon project.

Two thousand twenty-four targeted production:

• In 2024, the company is targeting a production guidance range of 1,330 Mboe/d to 1,380 Mboe/d, with 2024 exit rates targeted at approximately 1,455 Mboe/d, as the company controls pace and timing of projects, in conjunction with incremental egress, ensuring value growth, maximizing value for its shareholders. This is targeted to deliver 2025 annual average production growth of approximately 4 per cent to 5 per cent compared with 2024 targeted annual average production levels:
  • Production-per-share growth in 2024 is targeted to range from 3 per cent to 7 per cent when compared with targeted 2023 levels as a result of the company's robust free-cash-flow generation, which it targets to allocate 100 per cent to shareholders when the company reaches $10-billion in net debt, targeted for Q1 2024.
  • Targeted production mix is balanced in 2024, consisting of approximately 45 per cent high-value light crude oil and SCO, 28 per cent bitumen and heavy crude oil, and 27 per cent natural gas.
  • Liquids production, including SCO volumes, is targeted to range between 977 Mbbl/d (million barrels per day) to 1,008 Mbbl/d. The company's long-life, low-decline production represents approximately 79 per cent of its total targeted liquids production in 2024:
    • At Jackfish and Kirby North, planned turnarounds are targeted to occur in Q2 2024, and impact quarterly average production by approximately 17,100 bbl/d.
    • At Horizon, a planned turnaround is targeted to occur in Q2 2024, with a full plant outage targeted for approximately 30 days, impacting quarterly average production by approximately 89,000 bbl/d.
    • At the non-operated Scotford upgrader, planned turnarounds are targeted to occur throughout the year, beginning with a 10-day turnaround in April, 2024, followed by a 49-day turnaround in September, 2024, and October, 2024, when the Scotford upgrader will operate at reduced rates. The total impact to annual average production from these turnarounds is targeted at approximately 12,400 bbl/d.
  • Natural gas production is targeted to range between 2,120 MMcf/d (millions of cubic feet per day) to 2,230 MMcf/d, with strong targeted natural gas production growth of approximately 7 per cent from exit-2023 levels to exit-2024 levels.

Environmental, social and governance (ESG) highlights

Canada and Canadian Natural are well positioned to deliver affordable, reliable, safe and responsibly produced energy that the world needs, through leading ESG performance. Canadian Natural's diverse portfolio is supported by a large amount of long-life, low-decline assets which have low-risk, high-value reserves that require low maintenance capital. This allows the company to remain flexible with its capital allocation, and creates an ideal opportunity to pilot and apply technologies for GHG emissions reductions. Canadian Natural continues to invest in a range of technologies to reduce emissions, such as solvents for enhanced recovery, and carbon capture, utilization and storage (CCUS) projects. Canadian Natural's culture of continuous improvement provides a significant advantage to delivering on its strategy of investing in GHG technologies across its assets, including opportunities for methane emissions reduction, which will enhance the company's environmental performance and long-term sustainability.

Canadian Natural continues to support the Pathways Alliance, driven by the six major oil sands companies, including Canadian Natural, that operate approximately 95 per cent of Canada's oil sands production. The goal of this unique alliance is to support Canada in meeting its climate commitments and position Canada to be the preferred source of crude oil globally. Working collectively with the federal and provincial governments, Pathways has a goal to achieve net-zero GHG emissions from oil sands operations by 2050, and is pursuing realistic and workable solutions to deliver significant emissions reductions.

Environmental targets

Canadian Natural is committed to reducing its environmental footprint and, as previously announced, has committed to the following environmental targets:

• 40-per-cent reduction in corporate Scope 1 and Scope 2 absolute GHG emissions by 2035, from a 2020 baseline.
• 50-per-cent reduction in North America E&P (including thermal in situ) methane emissions by 2030, from a 2016 baseline.
• 40-per-cent reduction in thermal in situ fresh water usage intensity by 2026, from a 2017 baseline.
• 40-per-cent reduction in mining fresh river water usage intensity by 2026, from a 2017 baseline.

Details of the Canadian Natural's leading ESG performance can be found in the company's 2022 stewardship report to stakeholders on the company's website.

Conference call and presentation

This press release will be accompanied by a conference call and presentation, where the company will discuss its 2024 budget and strategy for maximizing shareholder value.

Note: The presentation materials will be available for download from the company's website 30 minutes prior to the conference call.

The event will take place on Thursday, Dec. 14, 2023, at 9 a.m. MT/11 a.m. ET.

Dial-in to the event:

• North America: 1-888-886-7786;
• International: 001-416-764-8658.

Webcast presentation:

• Access to the webcast can be found on the company's website.

Conference call replay:

• North America: 1-877-674-7070;
• International: 001-416-764-8692;
• Passcode: 347111 followed by the pound sign.

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