Canadian Natural Resources Ltd. shares sank 4 per cent on Tuesday after the company said its Horizon oil sands upgrader in northern Alberta would be shut down for several weeks longer than expected so it could repair a processing unit.
Canadian Natural, the country’s largest independent oil explorer, said late Monday that the 110,000 barrel a day plant would be down until mid- to late March so it could fix a fractionator unit. The initial expectation was for a two- to three-week outage.
The extended shutdown has forced the company to cut its 2012 production target for Horizon to 93,000-103,000 barrels a day from the previous forecast of 105,000-115,000 bpd.
The operation was shut down for seven months last year after a devastating fire in January.
The reduction in expected output could reduce 2012 cash flow by 4 per cent but have “no meaningful impact” on net asset value, CIBC World Markets analyst Andrew Potter wrote in a research note. However, he warned about the possibility of a less tangible impact.
“We highlight potential reputation risk as the market starts to see Horizon reliability as an issue, not long after the fire last year,” he wrote.
Despite short-term pressure on the stock, however, the company “remains a quality opportunity” over the medium and long terms, Potter said.
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