A Canadian Natural Resources pump jack pumps oil out of the ground near Dorothy, Alberta, June 30, 2009.TODD KOROL/Reuters
Canadian Natural Resources Ltd. on Thursday reported lower second-quarter profit and said it doesn't expect a continuing bitumen spill at its Primrose oil sands project to have a long-term impact on production.
The oil and gas explorer posted profit of $476-million or 44 cents a share compared with $753-million or 68 cents a year earlier.
Stripped of one-time items, adjusted profit was $462-million or 42 cents – coming in just a penny below what analysts had been expecting, according to Thomson Reuters. Revenue dipped slightly, to $3.74-billion from $3.83-billion.
Daily production averaged 623,315 barrels a day, down from 679,607 a year earlier.
An emulsion of bitumen and water has been seeping onto the Cold Lake Air Weapons Range in northeastern Alberta because of what Canadian Natural calls "mechanical failures" on old wells at its Primrose East property.
The company has been ordered to limit the amount of steam it pumps into the Primrose reservoir while the Alberta Energy Regulator investigates. As a result, production next year is expected to be about 10,000 b/d lower than originally targeted.
But company president Steve Laut said he's not concerned about any longer-term impact, as he is confident the company can either repair problematic wellbores or work around them.
Having a small amount of stranded resource at Primrose would be the "very worst case," Mr. Laut told a conference call with analysts. "But the most likely case is when we go by these wellbores, we adjust the steaming strategy. We'll get the reserves, but it may take longer to get the reserves out."
Last week, Canadian Natural said almost a million litres of bitumen had leaked into the bush and muskeg at Primrose. The damage is now contained to a 13.5-hectare area and a "substantial" amount of oil has been recovered.