March 29, 2024 1:40 AM

Canadian Natural Resources for the long term

Sustainable Development initiatives have added another layer to what oil and gas companies must comply with. Can they still make a profit with oil sands development?

/ Published 5 years ago

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When dealing with oil and gas markets undulations and volatility go with the territory. Oil and gas stocks get affected more so than other stocks by politics, environmental concerns and whether the company invests enough in research and development. Though Canadian Natural Resources LTD (TSE: CNQ) has not become directly involved in the Sustainable Development goals set by Canada’s government, looking at a premier company might indicate how oil and gas will fare. Mandates of Sustainable Development shows phrasing of “responsible development and use” of the Canadian landscape. Who defines what that becomes? Does the definition the Canadian Natural Resources LTD. created dovetail into what the Canadian Government defines it as?

The company

Canadian Natural Resources LTD profiles as an independent natural gas and crude oil production and development company. Segmented into Midstream, Production, and Oil Sands Mining and Upgrading it covers North America in Western Canada, the North Sea United Kingdom, South Africa, Cote d’Ivoire and Gabon. The company has many components that can weather economic or government storms.

Its Horizon Oil Sands Mining and Upgrading portion make synthetic crude oil with bitumen. Two pipeline operations became handled by the Midstream portion which also has a co-generation electricity system housed there through Redwater Partnership. Global in nature it has a subsidiary in the United Kingdom known as CNR International. A central processing system located near the Ninian Field that serves as an oil hub for the Lyell and Columba Terraces fields the company has working interests in. It maintains interest in several other fields as well. Exploration ventures continue in the offshores Cote d’Ivoire Africa where it has three licenses as of December 2016. In that same year, it engaged net natural gas wells in Northeast British Columbia and Northwest Alberta.

News

Titanium Corporation, Inc. with Canadian Natural Resources LTD Oct. 30, 2018, announced that the FEED phase (front-end engineering design) of the Horizon Project had phase three fully implemented. Supporting the Emissions Reduction Alberta (ERA) concept both entities gave more funding as in $1.5 million and dependent upon results up to $3.7 million. The proof of concept activity includes building secondary plants next to existing froth treatment plants to create a secondary stage of treatment which accelerates tailings remediation, reduces emissions, recovers minerals and bitumen from the tailing. Completion of mechanical equipment, datasheets, piping and instrumentation diagrams, and the relevant control system architecture have become ready for review.

The oil and gas market can be very volatile. (Source)

Poised for growth?

Analysts continue to have confidence in the stock as a long-term opportunity. 2016 did see negative returns, but the company did acquisitions, exploration licenses, and funding of more environment projects. Analysts expect earnings to return to the positive ends of the scale by 2019. Analysts classified it as a “growth engine.” For short traders, it could make money now. The company has always had stock volatility. Its four-pillar balanced strategy appeals to analysts and the public. With such intelligent thinking that stock just might eventually win.  With a long era of negativity just by the mathematics of probability sunshine positive returns should come soon. The public and analysts like the stock and the company. By faith, they trade it and rate it a good long-term investment much like following a favorite sports team that does not always win but takes the risks and survives anyway.

Looking at the graphic chart of stock performance makes an investor wince. Reading the text makes an investor believe even from outside sources such as NasdaqTimes. In sectors, the company does win repeatedly but looking at overall stats it has had a long-term dip. In recent months till the global shakeup, it has moved toward positive realms. Some companies people invest in because they like what they do and want business done that way. Successful expansions done well normally give good positive returns if the company has not overextended. Nothing indicates an overextension just well thought out calculated risk done well despite obstacles and changing regulations. Many with the October dip have bought the stock.

Other considerations

In May 2018 Royal Dutch Shell Corporation pulled out its 8 percent interest in Canadian Natural Resources due to its debt load. The prior year Shell sold its Alberta oilsands assets to Canadian Natural. This month Ninepoint Partners LP released 423,400 shares.

With money poured into new technologies by the Canadian government through Sustainable Development policies, it may become a case of Canadian Natural Resources has the grit and knowledge to make oils sands profitable and not ruin the environment. If so that would make it a global leader due to United Nations support of Sustainable Development. It has come closer than any other company. Just one more hurdle —do it cleanly.

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