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A Canadian Natural Resources pumpjack works near Dorothy, Alta., on June 30, 2009.

Todd Korol/Reuters

Canadian Natural Resources Ltd., Canada’s biggest oil producer, beat analysts’ estimates for fourth-quarter profit on Thursday and forecast much stronger cash flow this year, as crude prices staged a steady recovery from pandemic-driven lows.

Rising crude and natural gas prices have given operators some respite after a tumultuous 2020, when the COVID-19 pandemic wiped out one-fifth of global fuel demand.

Canadian Natural expects to generate $4.9-billion to $5.4-billion in free cash flow in 2021, helping it to reduce debt. Last year, it generated $692-million.

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President Tim McKay, asked whether the company could increase capital spending, said it would remain cautious.

“2020 started very robust and changed very quickly. The volatility can still be quite extreme,” Mr. McKay said on a conference call, adding that the OPEC group of oil-producing countries has spare production capacity that it could deploy.

The company hiked its quarterly dividend to 47 cents per share payable on April 5, from 42.5 cents.

Canadian Natural said it reduced its greenhouse gas emissions intensity by 2 per cent in 2020 from 2019, operating largely in the oil sands, one of the world’s highest emitting crude regions. The company is evaluating ways to reduce emissions further, including by expanding carbon capture, Mr. McKay said.

The company produced 1.2 million barrels of oil equivalent a day (boe/d) in the fourth quarter, compared with 1.1 million boe/d in the third.

Canadian Natural said average realized prices for crude rose 1 per cent to $40.56 a barrel.

Canadian Natural booked a $143-million charge for the canceled Keystone XL oil pipeline project, on which it planned to ship crude.

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On an adjusted basis, the Calgary-based company earned $176-million, or 15 cents per share, in the quarter, compared with $135-million, or 11 cents, in the third quarter.

Excluding one-time items, the company earned 15 cents per share, beating analysts’ average estimate of 13 cents, according to Refinitiv data.

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