Canadian Natural Resources beats Q4 profit, sweetens shareholders' returns

By Tanay Dhumal

(Reuters) -Oil and gas firm Canadian Natural Resources on Thursday beat Wall Street estimates for fourth-quarter profit on record production, and raised its quarterly dividend by 5%.

Shares of the company were up about 2.3% at C$91.98.

The company said it achieved a net debt level of C$10 billion ($7.37 billion) in the quarter, months ahead of its target set to achieve in the first quarter.

Canadian Natural said it would now aim to return 100% of its free cash flow (FCF) to shareholders through dividends and share buybacks, underscoring the energy industry's focus on shareholder returns and reining in costs.

"This is one of our positive catalysts as CNQ will return 100% of FCF to shareholders. We expect investors will look for more details on the execution of the payout along with the trajectory of capex with the shift in turnaround timing," said Jefferies analysts in a note.

The company's overall production in the fourth quarter was up 9.6% at 1.42 million barrels of oil equivalent per day (boepd), compared with last year.

Total U.S. oil demand rose 3.4% in October versus the prior year, according to U.S. Energy Information Administration (EIA)data, benefiting Canadian firms as the U.S. is the largest importer of the country's oil and gas.

The company reported an adjusted profit of C$2.34 per share for the quarter ended Dec. 31, compared with analysts' average estimate of C$2.15 per share, according to LSEG data.

The Canadian firm's reported profit jumped nearly 73% to C$2.63 billion ($1.94 billion) in the quarter, compared with the previous year.

($1 = 1.3563 Canadian dollars)

(Reporting by Tanay Dhumal in Bengaluru; Editing by Savio D'Souza and Shweta Agarwal)