Canadian Natural Resources (NYSE:CNQ) is focusing the majority of its capital in 2011 into developing various oil properties in North America. These assets include an extensive number of light oil opportunities across the company's portfolio.
TUTORIAL: Commodity Investing 101
Canadian Natural Resources has allocated $544 million in 2011 to develop light oil properties in North America. The company plans to drill 159 wells during the year and produce between 54,000 and 58,000 barrels of oil per day in 2011. This would be 15% growth compared to 2010 and includes the company's production of natural gas liquids as well.
Canadian Natural Resources will put approximately $500 million in capital into light oil projects annually over the next five years and is targeting annual production growth between 3 and 15%.
Canadian Natural Resources estimates that it has gross proved and probable light oil reserves of 150 million barrels, along with another 83 million barrels of natural gas liquids.
Canadian Natural Resources plans to develop the company's light oil assets using secondary and tertiary oil recovery methods along with horizontal exploitation of conventional and unconventional formations.
Canadian Natural Resources has more than 100 existing water flood operations and uses this method to recover additional oil from its properties. The company also injects carbon dioxide and alkali surfactant polymer (ASP) into wells to recover additional oil.
Canadian Natural Resources plans an ASP operation at the Grand Forks project with initial work in late 2011, followed by injection in the third quarter of 2012. The company also has one carbon dioxide flood under way and another planned on its properties.
Another company conducting an ASP operation is Rex Energy (Nasdaq:REXX), which is conducting a pilot program at the Bridgeport Field in the Illinois Basin. The company recently reported increased oil flow at several of its wells in the program.
In the Rocky Mountains region, Resolute Energy (NYSE:REN) is involved with carbon dioxide operations at the Aneth field in Utah. Denbury Resources (NYSE:DNR) is also active with carbon dioxide operations in North America and has properties in both the Gulf Coast and Rocky Mountains regions.
Horizontal Light Oil
Canadian Natural Resources plans to use horizontal development on its conventional and unconventional assets. The company plans to drill 100 horizontal wells in 2011 on various properties in Canada.
One area the company is pursuing is the Spearfish formation at the Pierson project. Canadian Natural Resources has already drilled 14 wells here and has 126 future locations to drill. The company is also working to develop the Cardium and Baldonnel formations on its acreage.
The Bottom Line
Canadian Natural Resources has devoted most of its capital in 2011 towards oil development, and is working on various light oil properties across the company's inventory. (For related reading, also take a look at How Does Crude Oil Affect Gas Prices?)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
Stock AnalysisUnderstand why energy companies' stock are volatile when oil prices are volatile. Learn about the top five energy companies to buy and hold.
InvestingCommodity prices have been heading lower for more than four years, being the worst performing asset class of 2015 with more losses in cyclical commodities.
Stock AnalysisHere are five stocks that pay safe dividends and should be at least somewhat resilient to a bear market.
InvestingThe further you fall, the harder it is to climb back up. It’s a universal truth that is painfully apparent in the investing world.
InvestingWest Texas Intermediate oil futures have recently made pronounced movements. What do they bode for the world market?
InvestingGrowing global demand for quinoa has impacted Bolivian farmers' way of life. Should the American consumer be wary of buying this product?
MarketsDepressed crude oil prices are here to stay for the foreseeable future. Here's how it will affect an oil industry riddled with unsustainable debt.
Fundamental AnalysisOptions market trading data can provide important insights about the direction of stocks and the overall market. Here’s how to track it.
Stock AnalysisCan these two oil stocks buck the trend?
Investing NewsAlcoa plans to split into two companies. Is this a bullish catalyst for investors?
Discounted cash flow (DCF) analysis can be a very helpful tool for analysts and investors in equity valuation. It provides ... Read Full Answer >>
When a company issues a cash dividend to its shareholders, the retained earnings listed on the balance sheet are reduced ... Read Full Answer >>
The compound annual growth rate, or CAGR for short, measures the return on an investment over a certain period of time. Below ... Read Full Answer >>
The difference between called-up share capital and paid-up share capital is investors have already paid in full for paid-up ... Read Full Answer >>
Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>
A convertible bond represents a hybrid security that has bond and equity features; this type of bond allows the conversion ... Read Full Answer >>