Canadian Natural Resources Limited (CNQ) Earnings Call Transcript & Summary

Good morning, everyone. We'll get going here. Welcome to Canadian Natural's 2025 Investor Open House. Today, we will show you why Canadian Natural is the unparalleled independent energy company that investors need to own. Before we get started, a couple of housekeeping items. The bathrooms are back through these doors actually up on the third floor, fire exits on both sides. And of course, coffee and everything is available in the back room here. Canadian Natural is unparalleled in everything we do. Specifically, this is driven by our unparalleled assets, unparalleled execution and unparalleled resilience. Today's agenda is as follows: Scott Stauth, President, will start us off by laying the groundwork, showing why Canadian Natural is an unparalleled independent company. We'll then shift and run through our asset base, where Robin Zabek, CEO of E&P, will run through his conventional assets, followed by Jay Froc, COO of Oil Sands, who will go through both thermal and oil sands mining and upgrading. Our execution section will be next presented by Ron Laing, Chief Commercial and Corporate Development Officer. Then Victor, our CFO, will give a rundown of our resilience. And last, Scott will return for our outlook and summary. At that point, the webcast will conclude and we'll break for 10 to 15 minutes, grab a coffee before beginning the Q&A session with senior management and Murray Edwards, our Executive Chairman. As always, I remind you of our forward-looking statements and of course, the advisory section at the back of the presentation. To start, I'd like to remind you the size and scale of Canadian Natural. We are large with a current market cap of approximately $93 billion and a dividend yield of over 5% from our annualized dividend of $2.35 per share. Our balance sheet is strong today, net debt to EBITDA at 0.9x. And on the operations side, we currently produce over 1.6 million BOEs per day from our significant reserve base, where we have 27 million acres of land, which provides a deep inventory of future value creation opportunities, some of which we will highlight today during the presentation. Next, I'll call up Scott, who will discuss Canadian Natural strategy and advantages. Scott?

Thank you, Lance, and good morning, everyone. Scott Stauth. And today, our team will show the key differentiating factors that set Canadian Natural apart and why we are truly an unparalleled independent. Canadian Natural's strategy is underpinned by these 3 significant factors: our assets, our execution and our resilience. All 3 cohesively tied together and integral to deliver long-term value for our shareholders. Starting with our assets. Canadian Natural holds one of the largest, most diversified resource base in the industry. Our long-life, low-decline nature of our assets provides reliable production, while operatorship of our extensive infrastructure allows us to deliver high utilization, which is key to our low operating costs and strong capital efficiencies. Through our execution, we focus on value growth in a disciplined manner. Our teams deliver strong safety performance and cost efficiencies. We operate our assets with a culture of accountability and funnel down continuous improvement opportunities, driving down costs and enhancing productivity. Our low maintenance capital and low breakeven costs support consistent free cash flow generation, while our strong ESG commitment ensures we operate responsibly. Finally, our resilience is a result of our strong balance sheet and supported by our disciplined free cash flow allocation policy and anchored by our assets that deliver significant and sustainable returns to shareholders. Together, these 3 unique characteristics provide the foundation that sets us apart as an unparalleled independent resource company. Canadian Natural has been delivering long-term shareholder value for decades, which also continued to increase over time on the basis of our large, low-risk, high-value reserves, our diversified assets that have low maintenance capital requirements, a flexible, very disciplined capital allocation strategy and executing effective and efficient operations. We will continue this trend and build and deliver more free cash flow for shareholders returns for decades to come. You will see these advantages in more detail throughout the morning. Canadian Natural's unique culture is a key differentiating factor. It's our driving force that delivers results and strong shareholder value. Our people have the expertise, experience and commitment to do it right by working together. Every team member understands the expectations of executing effectively and always finding ways to optimize more value from the assets. They are inspired by results and appreciate the accountability that goes with it. Every employee is a shareholder at Canadian Natural. When the teams deliver results, all employees benefit and we win together. At every level, our people are empowered to not only bring forward value opportunities, but to champion those ideas. The power of culture is the mindset of continuous improvement at the planning and execution level, which helps our teams to ensure we are always striving to do things more efficiently than before. And 20 of you here today were present on the Albian oil sands mine tour in July, and you're able to experience this culture firsthand. Canadian Natural has always been a very disciplined allocator of capital. And that discipline revolves around the balancing of the 4 pillars that drives our strategy and maximizes shareholder value. Our 4 pillars are designed to maximize value through our balance sheet strength, returns to shareholders, resource value growth and opportunistic acquisitions, all of which are integral to our strategy and our success. Canadian Natural's reserves can only truly be appreciated when compared on a global scale and are significantly more than our Canadian peers. As you can see, we are the second largest globally, showing the magnitude and depth of our reserves, which also has a leading total preserved -- leading total proved reserve life index of approximately 32 years. When you layer on the context of reserves to market capitalization, Canadian Natural provides approximately 177 BOEs of total proved reserves for every USD 1,000 of market capitalization, significantly more than any peer. Even on a global level, the value proposition in Canadian Natural is compelling. To take it one step further, you can see here on the left-hand side how Canadian Natural stacks up when compared to Canadian and U.S. average reserve life indexes, a significant long-term differentiator for our company. We have decades of top-tier development optionality and when combined with our low corporate breakeven on the right-hand side of the slide, that includes long-term dividend growth, we can develop our inventory at a pace that makes sense, maintaining production in low commodity price cycles with breakevens in the low to mid-40s while having significant optionality to grow in stronger commodity price periods. We have a balance of high returns, quick payout conventional assets, long-life, low-decline thermal in situ and long-life, no decline oil sands mining and upgrading assets. All combined, our company is the most resilient over the short, medium and long term, providing sustainable free cash flow generation through the cycle with significant torque and upside to increasing commodity price cycles. Robin and Jay will go through all the details of our 3 core areas. However, I will highlight in advance for you that because of the robust nature of our assets, we have the opportunity to deliver unparalleled value growth in conventional of approximately 295,000 BOEs per day. Our thermal in situ assets of 210,000 barrels per day and our oil sands mining and upgrading of 240,000 barrels per day. Again, Robin and Jay will walk you through that. And with that, I will pass it over to Rob.

Thanks, Scott, and good morning, everyone. I'm really pleased to be here today to talk to you a bit about our North America conventional E&P assets and all of the ways that our teams have been working hard to lower costs, improve productivity and deploy technologies to increase value. Our conventional E&P [indiscernible] Manitoba. We are the largest conventional producer in Canada with 715,000 BOE/ds, of which over 40% is liquids. With that production comes the largest reserves in conventional in the country with 2.1 billion barrels of liquids and 27 Tcf of gas 2P reserves. Our 25 million net acres of land has been strategically put together over many years. And as you'll see later from Ron, it gives us significant ownership in the most economic plays in the basin. With over 10,000 locations and an extensive network of infrastructure, we have got a lot of options. Our balanced portfolio means that we are not restricted to one commodity or one area, and we can readily adjust our development plans in response to market conditions. And very importantly, as technology changes and improves, the depth and breadth of our assets means there is no one better positioned to generate incremental value through the adoption and evolution of technology. My next 2 slides highlight some of the continuous improvement in performance of our conventional assets over the last 2 to 3 years. First, on this slide, the left chart is production growth since 2023 and the right chart is our estimated reserves growth since 2023. Through a combination of acquisitions and organic drilling, we've increased both by over 20%. Essentially, we've added the equivalent of a midsized E&P, increasing near-term cash flow and long-term value. And this slide shows that our continued commitment to improving margins drives results year after year. That's reflected in our operating costs on the chart, where over the past 3 years, we're showing sustained decrease in nonenergy costs of 8%. Our teams have achieved that through a constant focus on effective and efficient operations by adopting technologies to improve productivity and lower operating costs and through economies of scale that once again are enabled by the size of our assets and our operations. Now 2 slides ago, I mentioned that I see us as better positioned than anybody else to take advantage of technologies. A great example of that is multilateral heavy oil drilling. This is a technology that really didn't exist a few years ago. And today, it makes up the majority of our drilling. What's key is that multilaterals have opened up areas that a few years ago were not productive. With a deep heavy oil inventory, over 3,000 of which are multilaterals, we have meaningfully extended the life, increased the value and increased the reserves largely on legacy Canadian Natural lands that we've held for a long time. And by continually improving the technology and execution, we're accessing more reservoir for lower costs and reduced service requirements. On average, in 2025, we're drilling wells that are 30% longer than we drilled in 2022. And in fact, in some cases, in stacked pay, we're actually drilling 2 sets of multilaterals from a single surface wellbore, doubling that length to about 20,000 meters per well. And we're doing that without adding a second surface wellbore, without adding additional surface or downhole facilities, lowering costs. And by continuously improving the technology and the execution, we're drilling the wells faster, 24% faster than we did 2 years ago. And that's helping drive our cost down by 9% on a dollar per meter basis. As we've improved the technology and execution, we continue to deliver top-tier results from our multilateral heavy oil wells with 2023, '24 and '25 on this chart essentially being overlays of one another. To me, what this chart really shows is that our programs and our results are dialed in, and we're not going to run out of top-tier inventory anytime soon. And not only are those great results repeatable, they're driving down our operating costs. On the chart in the blue bars, you can see that multilaterals have become a much larger share of our production over the last 5 years. And these longer life, lower OpEx wells are driving our costs, which is the green arrow that you read off the right-hand side of the chart, down. In fact, in the last 5 years, we've lowered our OpEx by $2 a barrel. Over that same 5-year span, we've grown our multilateral heavy oil production by a factor of 6x to the 45,000 barrels a day that we're at now and with multilaterals now making up 90% of our drilling activity in heavy oil. And I'll finish the multilaterals with a look at where they could take us in the near to midterm. With only the defined inventory in front of us today and keeping in mind, we are replenishing that inventory constantly, but only with what we see today, we have the potential to double our primary heavy oil production to over 150,000 barrels per day, surpassing the peak of 140,000 that we saw in 2014 from the older technology of slant well drilling. With our 3 million net acres of primary heavy oil rights, the vast majority of that value creation is going to come from lands that Canadian Natural has held for years. To me, a clear demonstration of the value created by combining industry-leading assets with skilled teams implementing the right technology. Speaking of technology, I'm going to finish up my heavy oil section in Pelican Lake and Driftwood. In our world-class Pelican Lake polymer flooding -- polymer flood, we've been injecting polymer since 2006 into the Wabiskaw A pool, recovering over 0.5 billion barrels of oil to date with a low base decline and low maintenance capital. Now we're taking our 20 years of polymer flooding experience from Pelican, and we're bringing it to a new zone, the Wab C in Driftwood, where we started flooding this year, and we're planning to expand and increase and target to grow that production to about 19,000 barrels a day out of Driftwood. Ultimately, we expect to be in the high 20% recovery factor range from both assets, giving us decades of long-life, low decline, high-value production. Switching gears now a bit to the Montney. This slide shows the distribution of our premium Montney assets from Northeast B.C. through Northwest Alberta, with the shading on the map showing that the majority of our lands lie within the high-value liquids-rich gas and light oil windows of the play. With ample infrastructure, over 3,000 locations with short payouts, we've got a deep inventory that we can choose to develop at a measured pace, drilling to fill our existing facilities or we could expand facilities and accelerate development should market conditions support it. This slide just gives a little bit more color to the size and depth of our Montney assets. With our 1.65 million net acres of Montney rights, sitting within a zone, 200 to 300 meters thick with multiple benches of development, we're showing 3 on the diagram on the left. The reality is in some of these areas, there's 4 to 5. And that all sits within a band stretching from Northwest to Southeast, about 400 kilometers long, giving us exposure to virtually every Montney play in the basin. Looking at our Montney cost performance, on average since 2023 in both drilling on the left-hand chart and completion on the right-hand chart, we've reduced our unit costs by 9% since 2023. On the drilling side, we're drilling faster, decreasing costs by optimizing the placement of our wells within the zones to the highest porosity, which gives us the highest rate of penetration in the best reservoir. And on completions, we've increased productive time on our frac spreads, driving costs down. Our teams are doing this by close integration of our drilling, completions and exploration groups, using data analytics and customized dashboards that give our people the information they need in real time to make better decisions to drill faster and to lower our costs. My last Montney slide shows that by using technology to integrate our teams, optimizing location selection and well design upfront and enabling better decisions faster in real time during operations, we are continually improving the performance of our Montney wells every year with 2025 on trend to be 40% higher in first year production than 2023. This means fewer wells to fill our facilities, keeping production up and costs down. I'm going to finish up my conventional section in the Kaybob Duvernay core area. In Kaybob, we're producing about 60,000 BOE/ds, half of which is liquids. We have dedicated processing capacity in place with both drill to fill room and options in place to increase capacity. And as you can see on the map, our lands are extremely concentrated in the very rich liquids-rich gas windows and the light oil window. And further enhancing value, we continue to drive margin improvements with a 20% improvement in our operating cost in 2025 year-to-date. And by applying the lessons that we've learned in the Montney, our Duvernay cost metrics show very similar profiles. Like the Montney, we're extending our well lengths. We're lowering our cost per meter while we're accessing more reservoir, driving our drilling costs down by 5% year-over-year. We're realizing even more significant savings of 17% on completions by maximizing the efficiency of our fracking operations, again, through real-time monitoring and analytics, but also optimizing our tonnage and reducing our water usage through advanced frac modeling and planning and design upfront before we ever touch the ground. And just like the Montney, our focus on continuous improvement in location selection, well design and execution is on trend to increase productivity year-over-year, looking at about a 10% increase over a 1-year period. To conclude, our conventional E&P assets post an extensive, unique land base underpinned by 2.1 billion barrels and 27 trillion cubic feet of reserves. With a 2P RLI of 35 years, there is no shortage of development opportunity, meaning our existing assets will continue to fuel value creation for many years. Our developments are repeatable and scalable, providing options for drill to fill and expansion projects across all product types and giving us the flexibility to very quickly respond to market conditions. By leveraging technology, we have a track record of unlocking additional development and creating new value across our assets. And our culture of continuous improvement means we are constantly driving to find new efficiencies and further improve execution, thereby increasing value. With that, I'm going to hand it over to Jay, who will talk to you about our thermal and mining assets.

Thanks, Robin. Good morning. My name is Jay Froc. I'm the Chief Operating Officer of our Oil Sands operations. I'm going to -- this morning, I'm pleased to walk you through both our world-class mining and upgrading assets, along with our top-tier thermal in situ. Canadian Natural's thermal assets produced approximately 274,000 barrels per day in Q3 2025, with strong operating costs of $10.35 per barrel. These assets are significant with over 5.2 billion barrels of 2P reserves. Our primary assets, Primrose, Jackfish and Kirby have a total combined facility capacity of 340,000 barrels per day. And with that, we have significant opportunities to utilize this capacity at low cost. We are a top-tier thermal in situ operator with almost 30 years of experience focusing on enhancing our margins, utilizing Cyclic Steam Stimulation, Steam Assisted Gravity Drainage and Steam Flood. One of our strengths at Primrose wolf Lake is our substantial infrastructure. With current capacity -- with current production of approximately 95,000 barrels per day and with approximately 45,000 barrels per day of available capacity, we are allowing for development opportunities, again at relatively low costs. We have about 90 potential future pad locations where we are able to bring on production at a very strong capital efficiency of approximately $10,000 per flowing barrel. This deep inventory allows for brownfield expansion opportunities, which could increase the total capacity by 40,000 to 180,000 barrels per day. Our SAGD operations at Kirby and Jackfish are another great example of how we can add significant value through economies of scale. With our current production of 177,000 barrels per day, we have about 23,000 barrels per day of available capacity. Our development program has room to grow. And at Kirby and Jackfish, we have 110 potential pad additions with development capital efficiencies, again of approximately $10,000 per flowing barrel. I do want to draw your attention to the black line at the top right corner of the map. This connects Jackfish to Pike 1, and I'm going to talk about it on the next slide. On our Pike 1 acreage, we recently completed a key piece of strategic infrastructure. The new 18-kilometer interconnect pipeline between Pike 1 and our Jackfish facilities allows us to accelerate our access to the massive resource of approximately 2.7 billion barrels of original in place bitumen. We are targeting to bring this production on stream in January of next year, 2026. A key part of our continuous improvement in SAGD performance is the use of technology and well design. Our use of steam splitters, wire wrap screens, inflow control devices and fiber optics, all work together to allow improved steam distribution from the well pairs. This results in higher production rates and lower SORs. We are also using artificial intelligence to maximize steam throughput, fuel usage and steam quality to help ensure our operations are optimized. The result of leveraging technology has helped to improve our well performance. And as such, our current oil production has shown significant improvement over wells drilled in 2019, as you can see in the graphs in the top right corner. Another opportunity is co-injecting solvent with steam, which reduces SORs and frees up steam for additional thermal development and brings forward reserves across our extensive asset base. On this slide, we're highlighting how we're unlocking additional value by drilling new producers in mature areas. By drilling into existing pads, typically with a new producer lower in the reservoir, as shown in the schematic, we are adding both production and reserves. These wells come online quickly, about 2 months and achieve strong production and lower SORs. These wells represent highly efficient capital barrels, and we think it's a smart way to enhance our performance without expanding our footprint. Leveraging technology, innovation and our culture of continuous improvement has resulted in significant cost reductions. This has allowed us to capture an impressive 13% reduction in drilling cost per meter. And at the same time, we've increased our drilling efficiency by drilling 32% more meters per day. These lower drilling costs, combined with increased drilling efficiency, lowers the overall development costs and combined with the higher well productivity I showed on the previous slide, drives strong thermal capital efficiencies and robust returns. The Jackfish Brownfield Expansions are a growth initiative designed to leverage our existing infrastructure. By focusing on steam capacity expansion and process debottlenecking across the 3 operating Jackfish plants, we expect to add approximately 30,000 barrels per day of bitumen capacity. These brownfield expansions will increase total Jackfish production to 150,000 barrels per day, and we're going to implement that at a steady pace of about 10,000 barrels per day each year over the last 3 years of the 5-year program. This capital investment is estimated between $650 million and $750 million with a target range of $22,000 to $25,000 per flowing barrel. This level of efficiency underscores our disciplined approach to development and our focus on maximizing returns from existing assets. Front-end engineering for this project is targeted for 2026. In summary, the Jackfish expansion strengthen our medium-term value creation strategy, leveraging proven assets and driving cost effective production growth. Pike 2 is a greenfield thermal expansion project targeting roughly 70,000 barrels per day of bitumen. We expect regulatory approval late this year, 2025, with front-end engineering beginning in 2026. Development will be phased over 6 years, allowing us to manage capital efficiency efficiently. Total investment is targeted at $2.5 billion to $2.8 billion, delivering strong capital efficiency in the range of $35,000 to $40,000 per flowing barrel. When completed, Pike 2 targets to contribute approximately 20% additional capacity growth across our thermal portfolio, reinforcing our strategy of disciplined organic growth. Capital investment in both the SAGD growth opportunities would take place over several years. However, the respective time lines of these projects are independent of each other. These projects would ultimately deliver approximately 100,000 barrels per day of highly capital-efficient production ranging from $22,000 to $40,000 per flowing barrel, which is highly competitive when compared to both the original Jackfish acquisition of approximately $35,000 per flowing barrel or recent in situ transactions in the public market. To conclude, our Thermal In Situ business is underpinned by roughly 5.2 billion barrels of 2P reserves, giving us long-term running room and significant optionality for decades of development and production. Our development strategy remains focused on highly capital-efficient growth. We have the flexibility to adjust development pace with market conditions, ensuring a disciplined investment strategy. With drill-to-fill opportunities, we can grow production economically, ensuring we maximize existing facility capacity. We continue to leverage technology and by integrating AI-based monitoring, we're able to improve well performance, reduce steam-to-oil ratios, lowering cost and generating strong returns. A cornerstone of our success is our culture of continuous improvement. Our well pad design initiatives have reduced costs and improved onstream timing, ensuring predictable, repeatable area development. In summary, our Thermal In Situ program combines scale, efficiency and innovation. We have a long-life, low-decline resource base that continues to deliver returns to shareholders through strong resource development. Canadian Natural's world-class mining and upgrading assets have a total capacity of approximately 592,000 barrels per day, 90% of which is highly valued SCO barrels. We have 8.3 billion barrels of 2P SCO reserves with a reserve life index of approximately 47 years. This underscores the magnitude of this resource and its ability to support stable, long-term cash flow generation. Beyond the booked reserves, there's a substantial future potential with 20.4 barrels of bitumen initially in place. Our industry-leading operating costs capture significant value with highly -- with upgraded high-quality SCO barrels with no decline and no reserve risks. We have the advantages of economies of scale with our teams focused on optimizing production, increasing reliability and improving our cost structure through continuous improvement. Additionally, with a strong -- very strong focus on safety performance. Our maintenance capital requirements are low, and our teams remain focused on safety, reliability and high utilization rates, all key drivers of consistent performance and margin strength. Canadian Natural clearly leads the industry in oil sands upgrading utilization, a significant advantage. Our operating costs have trended down in recent years with 2025 forecasted to be approximately 12% lower than 2017 when we completed Phase 2 and 3 at Horizon and acquired our initial acquisition at AOSP. This slide shows the AOSP value proposition by reducing costs and increasing production. Beginning in 2017 with our acquisition of a 70% working interest of AOSP, we have added gross capacity in the mines by improving efficiency while pushing costs even lower. We did this while keeping safety as a core value. Less than a year ago, we acquired Chevron's 20% working interest. And on November 1, we closed on the swap transaction with Shell that saw us take our ownership in the Albian mines to 100%. It's important to note that from 2017 to 2025, we have reduced operating costs by 38%, while adding approximately 57,000 barrels of gross production to AOSP. As I mentioned before, on November 1, we completed the swap transaction with Shell that took our ownership in the Albian mines to 100%. Simply, this translates into incremental free cash flow and ultimately supports higher shareholder returns. Beyond production growth, full ownership enables greater operational control and synergies across both the Horizon and Albian mines. We are now able to optimize utilization of equipment, including heavy haul trucks, shovels, dozers, cranes and other shared assets. By combining warehousing, we eliminate redundant stock while streamlining supply chain operations and maintenance. This consolidation also enhances the value of future growth projects and allows us to pursue integrated optimization strategies across both mining operations. We estimate annual savings of about $30 million in addition to approximately $30 million of onetime savings. By aligning ownership, operations and strategy, we're setting the stage for long-term scalable and efficient growth. At Horizon, 2017 was a key milestone for us as we completed Phases 2 and 3, which took our capacity to 250,000 barrels per day. And in 2024, we completed the reliability enhancement project, which increased our capacity by about 14,000 barrels per day. This shifted our planned turnarounds to once every 2 years from the previous annual cycle. Most importantly, over the past 8 years, our culture of continuous improvement has allowed us to optimize production, which results in 2025 targeted production of approximately 275,000 barrels per day, an increase of 25,000 barrels per day, and that's along with a 10% reduction in operating costs. Currently, we're progressing with our naphtha recovery unit tails treatment project, which targets to bring an additional 6,300 barrels per day of SCO production following its mechanical completion in Q3 of 2027. This project has a strong capital efficiency of approximately $55,000 per flowing barrel and benefits of reduced future tailings costs. Relentless pursuit of improvement year after year have consistently delivered material results driving increased value for shareholders. Through our culture of accountability and continuous improvement, a long list of efficiencies and cost savings are constantly being identified. Some examples listed here are the safe introduction of mining traffic circles, which resulted in annual cost savings of approximately $10 million. Using metallurgical advances and new teeth design in our crushers saves us $3 million per year. And optimizing the pigging processes in our Horizon cokers reduced downtime, which resulted in approximately $80 million of incremental annual revenue. These improvements matter because they all add up and they all contribute to significant value on an annual basis. Utilizing artificial intelligence and operations has resulted in increased efficiency and cost savings. An example of how we are leveraging AI to enhance operations is on our flotation cells where virtual operators boost efficiency through real-time adjustments, resulting in an incremental 400,000 barrels per day per year -- barrels per year, excuse me. Using AI for smart monitoring has increased reliability, resulting in reduction of unplanned downtime while extending pump maintenance intervals. We also use AI to assist in pipe integrity monitoring, reducing the time technicians spend on this task while maintaining a high level of reliability. Whether through the use of virtual operators or early warning detection offered up by real-time dashboards, AI is a useful tool in our relentless pursuit of efficiency and cost savings. This slide outlines the Jackpine mine expansion, a significant value creation opportunity within our oil sands portfolio. It represents a development opportunity that leverages proven technology to deliver high-value, capital-efficient production. This project targets approximately 150,000 barrels per day of bitumen, a significant opportunity to contribute to our long-term growth. We're targeting capital costs in the range of $7.5 billion to $9 billion with development expected to occur over a 6-year time frame. Importantly, we've already secured regulatory approval for the project, which clears -- which provides a clear pathway. The Jackpine mine expansion delivers strong capital efficiency with a targeted range of $50,000 to $60,000 per flowing barrel, a highly competitive, capital-efficient oil sands development. In summary, the Jackpine mine expansion represents a material growth opportunity, large in scale and highly capital efficient. This slide highlights the North Mine expansion opportunity at Horizon. The project builds on our proven expertise while integrating advanced technologies to deliver efficient and cost-effective production growth. The North Mine expansion presents a unique opportunity to combine our in-pit extraction process technology with paraffinic froth treatment. The project is expected to increase production by approximately 90,000 barrels per day of bitumen, providing a meaningful uplift to our overall oil sands output. We are maintaining a disciplined capital approach with an estimated investment in the range of $4.5 billion to $5.5 billion spread over a 7-year time frame. This project delivers strong capital efficiency targeting between $50,000 and $60,000 per flowing barrel, a highly competitive metric for development of this scale. Before proceeding to full execution, this project will require regulatory approval, and we're continuing to constructively engage with regulators and stakeholders on an ongoing basis. In summary, the North Mine expansion combines innovation and discipline. It's a clear example of how we're pursuing strategic growth that creates significant values for our shareholders. Combining the future growth opportunities in our mining assets through Jackpine mine expansion and Horizon's North mine expansion offers the opportunity to grow mine production without the necessity of upgrader expansion. In the longer term, our 100% ownership of both Horizon and Albian provides us with the opportunity to grow production capacity of combined SCO and bitumen to approximately 840,000 barrels per day. Capital investment in both growth opportunities would take place over several years and results in approximately 240,000 barrels per day at capital efficiency targeted to be in the range of $50,000 to $60,000 per flowing barrel. These projects are an opportune way to increase production of high-value, 0 decline assets creating significant value for our shareholders. To conclude, our mining oil sands business is anchored by approximately 8.3 billion barrels of 2P reserves, representing one of the largest, most stable reserve bases in Canada. These reserves support a 2P resource life index of 47 years, providing a secure and reliable foundation for decades of production. We continue to pursue growth opportunities across both mines, which positions us for increased 0 decline production. Technology continues to be a key enabler in how we operate. The integration of artificial intelligence into our operations allows us to prevent issues before they occur, reducing unplanned downtime and improving our utilization. Our success is built on a culture of continuous improvement where we realized significant capacity increases through creep capacity projects, ensuring we maximize the use of our existing assets. Additionally, our culture of accountability keeps us focused on cost savings, operational excellence and efficiency gains across every part of our business. In summary, our oil sands mining and upgrading operations combine scale, longevity and innovation with extensive reserves, high reliability, strong growth opportunities and a culture that relentlessly pursues improvement. We are well positioned to deliver sustainable value for shareholders for decades to come. With that, I'll turn it over to Ron Laing, our commercial -- Chief Commercial and Corporate Development Officer.

Thanks, Jay. Good morning, everyone. My name is Ron Laing, and I'll be walking you through Canadian Natural's unparalleled execution of a strategy that has created a portfolio of diverse and low-decline assets, achieved industry-leading F&D costs, diversified our market strategy to maximize returns, all while doing it safely and responsibly and while working with industry partners to provide leadership on a national scale on the carbon file through the Pathways project. Canadian Natural has a balanced and diverse product mix, which in 2026 will produce approximately 1.6 million BOE a day, including approximately 1.2 million barrels a day of liquids and approximately 2.5 Bcf a day of natural gas. Our targeted 1.2 million barrels per day of liquids in 2026, 50% is targeted to be high-value SCO, while light oil and NGLs make up roughly 16% and heavy crude oil makes up approximately 34%. Diversity of product streams limits our pricing exposure to any one product. Further, we are maximizing value from our liquids stream through our committed exports to the West Coast of Canada and the U.S. Gulf Coast. Natural gas is targeted to be approximately 2.5 Bcf a day or roughly 25% of our total targeted production. We are extracting value from our natural gas production through a balanced portfolio of sales points where over 800 million a day are exported out of Western Canada, maximizing our netbacks. With over half our production being long-life, low-decline or 0 decline assets, we have -- 12%, largely made possible through the approximately 56% of our production coming from our long-life, low decline or no decline assets in our oil sands. This low corporate decline rate means our portfolio of assets require less maintenance to maintain production volumes, again, making our free cash flow more predictable and sustainable. Comparing our low corporate decline to our peers, you can see Canadian Natural's industry-leading decline rate. We estimate that on an annual basis, it costs us approximately CAD 9 to CAD 10 per barrel in maintenance capital to maintain our production levels. Our oil sands represent the most economic source of sustained oil supply and production is more easily maintained through periods of commodity price volatility, such as what we saw in 2020. According to BMO research, you can see how much more sustainable oil sands is versus typical energy companies shown on the left side of the slide in estimated U.S. dollars sustaining capital required per barrel. In Situ oil sands operations have sustaining capital of just USD 4 per barrel, while mining oil sands has a sustaining capital level of approximately USD 8 per barrel. Again, highly competitive when compared to typical conventional operations. Oil sands is a significant part of Canadian Natural's portfolio, and we have top-tier low capital rate -- a low sustaining capital ratio when compared to Canadian and U.S. peers shown on the right side. Switching to a peer comparison of F&D costs. Our 5-year average is the lowest in our peer group at less than USD 6 per barrel. Our teams are focused on constantly adding reserves through cost-effective development activities across our high-quality asset base and through value-adding acquisitions. Canadian Natural's high-quality conventional assets are top tier. As shown in this ranking of the top plays in North America, our significant ownership position in each of these play types provides Canadian Natural with significant optionality as we allocate capital each year. Included in this, we have a significant land base in Western Canada of approximately 25 million acres with approximately 10,000 premium drilling locations in the leading North American plays, which Robin discussed earlier. Canadian Natural's world-class oil sands mining assets deliver top-tier results through low-cost operations at our 2 projects, Horizon and AOSP, which deliver a combined 592,000 barrels a day of capacity, 90% of which is high-quality SCO. These long-life, no-decline oil sands mining assets combine effective and efficient operations to support a low WTI breakeven price, delivering us significant and superior returns. Switch gears to talk a bit about our marketing. Our marketing strategy is focused on maximizing netbacks through strong market access and balanced commodity exposure. We're diversified across natural gas, NGLs, synthetic crude, light and heavy oil, giving us flexibility in rapidly changing markets. With committed export capacity on TMX, pipeline access to the U.S. Gulf Coast and North America's gas networks, we ensure reliable egress and premium market reach. Infrastructure planning is critical by optimizing our blending, transportation and upgraded production capacity, we consistently maximize our netbacks, delivering long-term value for shareholders. We also support projects that enhance heavy crude oil and bitumen conversion such as the North West Redwater refinery, which increases our upgraded production capacity. Canadian Natural produces approximately 2.5 Bcf a day of natural gas. As you can see, this breakdown shows our diverse and balanced portfolio of natural gas sales, which helps maximize netbacks. Our exports are spread across key hubs, which you'll see noted on the slide, with a total of 823 million a day exported out of Alberta. This diversified approach allows us to capture stronger North American pricing and generate approximately $375 million of incremental margin in 2025. Our strategy ensures flexibility and resilience in a dynamic market. At Canadian Natural, we're also expanding our reach into global LNG markets through our commitment with Cheniere LNG at Sabine Pass in Louisiana. This 15-year contract provides exposure to JKM pricing, offering pricing diversification and access to international markets. This project is expected to be in service by 2030, pending a positive final investment decision by Cheniere. This commitment further diversifies our portfolio and positions us to benefit from global LNG demand growth. On the crude oil side, our marketing strategy is built around accessing multiple target markets. Canada's West Coast, which obviously opens us up to more international markets than previously able as well as the U.S. Midwest and the U.S. Gulf Coast markets. Canada has more egress options for crude oil than ever before. Here, we see the various options available to Canadian Natural to move our share of the roughly 5.3 million barrels per day of Western Canadian supply on pipelines such as TMX, Keystone, Enbridge, Flanagan South and Express. With the addition of TMX to the list of export options, significant value has been created, which I'll speak to in a little more detail shortly. We continue to work with industry partners to pursue options for further expansion of egress capacity to ensure that there is sufficient capacity to allow our teams to continue to grow production with the certainty that adequate capacity to move the additional barrels will be available well into the future. Potential expansions on Express and Enbridge Mainline as well as the Trans Mountain expansion are just some of the opportunities being developed. The Western Canadian oil market currently enjoys some spare egress capacity out of the basin with the addition of TMX. This slide shows production today with the dash line being the production forecast. This is a roll-up of local refining demand and pipeline export capacities, which depending on growth, indicates we could see egress constraints as early as 2027. If this happens and pipelines are full, the question becomes, what are we going to do about it? The top boxes show there are debottlenecks that can occur on both the Enbridge Express Pipeline and Enbridge Mainline, as I mentioned previously. This could add 150,000 barrels per day and up to 300,000 barrels per day, respectively, on these pipelines. In addition, TMX has expansion capability that could add incremental 240,000 barrels a day by 2030 or 2031. In addition to these projects, there are other new build pipeline projects that could add significant capacity. But these are large builds. They would be subject to significant permitting processes and significant producer commitments to see them proceed. Industry is currently working closely with pipeline service providers to evaluate each of these projects and others to mitigate any constraints caused by production growth. Heavy crude oil and bitumen continue to drive significant value for Canadian Natural. The completion of TMX led to an improvement of more than USD 7 per barrel in the WCS differential. This translated to approximately nine -- Natural in 2025. This further reinforces one of the main pillars of Canadian Natural's marketing strategy, that is to support the development of sufficient market egress to mitigate the risk of apportionment and to ensure narrow differentials, pardon me, on a long-term basis. This slide highlights our diversified portfolio of approximately 1.2 million barrels a day of liquids. Our liquids production is comprised of 16% light crude oil and NGLs, 50% SCO and 34% heavy crude oil. We have a total of 256,500 barrels per day of committed export capacity. This includes 169,000 barrels per day to the West Coast via TMX and 87,500 barrels a day to the U.S. Gulf Coast via Flanagan South and Keystone. The light crude and SCO add significant value as they are priced at or near the value of WTI, generating significant cash flow for Canadian Natural. These pipeline export options enhance netbacks, reduce egress constraints and provide access to expanded refining markets. Canadian Natural's focus on effective and efficient execution of liability management programs continues with substantial well abandonment and reclamation programs. Our land management performance highlights our commitment to responsible resource development. Over the last 5 years, we've successfully abandoned approximately 11,300 inactive wells, a major step in reducing our environmental footprint. In addition, since 2009, we planted roughly 5 million trees across our oil sands mining operations and another 5.9 million trees across North American exploration and production areas, contributing to the long-term ecosystem restoration. In addition, we've also reclaimed over 17,600 hectares since 2016. And in 2024, we submitted more than 1,300 reclamation certificates, exceeding our goal in 2024 of approximately 1,100 per year, demonstrating our strong commitment to the environment and land reclamation. Canadian Natural's strong safety performance continues to reflect the safety is a core value at Canadian Natural. Since 2020, we've achieved a 37% reduction in total recordable injury frequency, a clear indicator of continuous improvement in incident prevention. Lost time incident frequency is down 70% over the same period. In 2024 alone, our teams conducted over 100,000 worksite safety observations, helping identify and address risk before they led to incidents. Our comprehensive safety management system focuses on proactive measures, including safety audits, coaching frontline supervisors and reinforcing expectations through safety excellence meetings. Our ultimate goal remains unchanged, no harm to people, no safety incidents. And if you're safe, your operations are reliable. And if you're reliable, your free cash flow is sustainable. Canadian Natural continues to be a global leader on the CO2 capture and sequestration. We own more carbon capture and sequestration capacity than anyone else in Canada. We have 3 major capture facilities at Horizon, Quest and North West Redwater, capturing roughly 2.7 million tons of CO2 per year. The Pathways Alliance is a coalition of 6 major Canadian oil sands producers working together to reduce greenhouse gas emissions from oil and gas production. Their main goal is to achieve net zero emissions from their production by 2050 through collaborative projects, most notably a large-scale carbon capture and storage network. The proposed CO2 transportation line is a key part of the Pathways project as it connects facilities which capture CO2 emissions to the storage hub where the CO2 is sequestered underground. The front-end engineering for this project has been completed. and the necessary regulatory applications have been filed. In addition, Pathways has also started consultation with the 25 indigenous groups located along the Pathways -- the path of the pipeline, pardon me. The pipeline project consists of over 400 kilometers of high-pressure main transportation line as well as a number of laterals connecting oil sands capture facilities to the transportation line. The pipeline runs from the mining operations north of Fort McMurray down through the Christina Lake area where many In Situ facilities are located, then continues down to the Cold Lake region where more thermal facilities are located and finally, to the storage hub. Pathways continues to work closely with all levels of government to move this nation-building project forward. Now I'd like to pass it over to Victor to talk about our unparalleled resilience.

Thanks. So moving on to our 2025 outlook and 2026 as well as our summary. So inclusive of the swap with Shell that closed earlier this week as well as opportunistic acquisitions that closed earlier in the year, we are now targeting 2025 annual production of between 1,560,000 barrels BOEs per day and 1,580,000 BOEs per day. Compared to 2024 annual production levels, the midpoint of our updated forecast represents significant annual growth of approximately 15% or 207,000 BOEs per day. Importantly, our liquids production remains strong in 2025, consisting of approximately 73% of total production. On the capital side, we maintained our operating capital of $5.9 billion from the reduced levels announced in May 2025, while also executing additional activity on our acquired assets, which is excellent execution and results from our teams as they drove even more efficiencies across our operations than we announced in May. For 2026, our outlook has averaged annual production of between 1,590,000 barrels per day and 1,650,000 BOEs per day. The midpoint of this range represents annual growth production of approximately 50,000 BOEs per day or 3% over 2025 levels. Consistent with our strategy of disciplined and flexible capital allocation, 2026 operating and capital and carbon capital outlook is targeted to be approximately $6.425 billion. We are planning to finalize our 2026 budget in early to mid-December, and we remain flexible and nimble with our execution plans with respect to changing commodity. To summarize our value creation opportunities, our portfolio of North American conventional assets has significant opportunities to create value in the short term through potential drill to fill of approximately 180,000 BOEs per day through maximizing existing facility capacity and approximately 115,000 BOEs per day in the medium term through facility expansions, indeed, a significant value opportunity. Across our thermal assets, we have medium-term opportunities that include approximately 210,000 barrels per day of future growth potential. This includes drill-to-fill development to maximize available facility capacity plus the 2 opportunities in Jackfish and Pike 2 that set the stage for significant value creation from our thermal in situ assets, as Jay detailed earlier. In 2026, we are targeting front-end engineering for Jackfish and Pike 2 as part of our capital outlook. At our world-class mining and upgrading assets, expansion projects in our mines could increase the production of bitumen at Jackpine and Horizon by 240,000 barrels per day. Again, as part of our 2026 capital outlook, we are targeting front-end engineering for Jackpine mine expansion. With the additional Western Canadian egress and narrow WCS differentials, growing production of 0 decline volumes represents a significant value creation opportunity for Canadian Natural. All these significant value creation opportunity underscores the magnitude of development potential Canadian Natural has, totaling future potential of approximately 745,000 BOEs per day, unlocking massive value for shareholders for decades to come. To summarize, our strategy is anchored in 3 distinct differentiators: assets, execution and resilience, which together position Canadian Natural as the most reliable and value-driven independent in the industry. It begins with our very significant reserves and our extensive infrastructure that provides a clear differentiation from our peers. Our low-cost, long-life, low decline production base generates sustainability while maintaining the flexibility to grow meaningfully when it makes sense to do so. On execution, we operate safely, reliably and efficiently. We deliver cost control, asset optimization and value-driven performance. And finally, our resilience is underpinned by our disciplined capital and free cash flow allocation policy. We continue to strengthen our financial position and return significant value to shareholders. Our low maintenance capital requirements further enhance that flexibility across our commodity cycles. So wrapping up today, we want to leave you with this message. Our unparalleled assets, execution and our financial resilience provides the best choice for reliable long-term value to shareholders as an unparalleled independent.