Canadian Natural Resources Limited Announces Normal Course Issuer Bid

Rhea-AI Summary

Canadian Natural Resources (CNQ) has announced a new Normal Course Issuer Bid (NCIB) program, allowing the company to purchase and cancel up to 178,738,237 shares (10% of public float) between March 13, 2025, and March 12, 2026. The daily purchase limit on TSX is set at 2,835,635 shares.

The company has outlined its free cash flow allocation strategy:

• 60% to shareholder returns and 40% to balance sheet until net debt reaches $15 billion
• 75% to shareholder returns and 25% to balance sheet when net debt is between $12-15 billion
• 100% to shareholder returns when net debt is at or below $12 billion

Under its previous NCIB program, CNQ purchased 52,380,000 common shares at a weighted average price of $48.35. The company plans to implement an automatic share purchase plan (ASPP) on March 13, 2025, facilitating share repurchases during blackout periods.

Positive

• Significant share buyback program of up to 178.7M shares (10% of float)
• Strong shareholder return policy with up to 100% of free cash flow allocation
• Implementation of ASPP ensures continuous buyback execution during blackout periods
• Demonstrated commitment to capital returns with previous NCIB completion

Negative

• Share buybacks contingent on net debt levels
• Daily purchase limitations may restrict buyback execution speed

Insights

Financial Analyst

Canadian Natural Resources' announcement of a substantial share buyback program represents a significant commitment to shareholder returns in the current energy market environment. The company plans to repurchase up to 178.7 million shares (10% of public float) over the next 12 months, signaling management's belief in the underlying value of its assets and operations.

What deserves attention is CNQ's structured free cash flow allocation policy, which creates a transparent framework for capital deployment: 60% to shareholders and 40% to debt reduction until reaching $15 billion in net debt, increasing to 75%/25% between $12-15 billion, and then 100% to shareholders below $12 billion. This tiered approach demonstrates disciplined financial management while prioritizing shareholder returns.

The implementation of an Automatic Share Purchase Plan (ASPP) enables continuous execution during blackout periods, ensuring consistent deployment of capital. Their previous buyback program's execution - purchasing 52.4 million shares at $48.35 average - demonstrates a track record of following through on capital return commitments.

This buyback program reinforces CNQ's position among major Canadian energy producers focused on returning capital rather than aggressive production growth, a strategy increasingly valued by institutional investors in the energy sector who prioritize disciplined capital allocation and stable returns.

Calgary, Alberta--(Newsfile Corp. - March 10, 2025) - Canadian Natural Resources Limited (TSX: CNQ) (NYSE: CNQ) ("Canadian Natural") announced today that the Toronto Stock Exchange ("TSX") has accepted notice filed by Canadian Natural of its intention to make a Normal Course Issuer Bid ("NCIB") through the facilities of the TSX or other alternative Canadian trading systems. Purchases may also be made through the facilities of the New York Stock Exchange.

The notice provides that Canadian Natural may, during the 12 month period commencing March 13, 2025 and ending March 12, 2026, purchase for cancellation up to 178,738,237 shares, being 10% of the public float as at February 28, 2025. Canadian Natural will not acquire through the facilities of the TSX more than 2,835,635 common shares during a trading day, being 25% of the average daily trading volume of its common shares on the TSX for the six calendar months prior to the date of approval of the NCIB, subject to certain prescribed exceptions. The price which Canadian Natural will pay for any such shares will be the market price at the time of acquisition. The actual number of common shares that may be purchased and the timing of any such purchases will be determined by Canadian Natural.

Canadian Natural targets to manage the allocation of free cash flow on a forward looking annual basis, while managing working capital and cash management as required. In October 2024, the Board of Directors adjusted the allocation of free cash flow as follows: (i) 60% of free cash flow to shareholder returns and 40% to the balance sheet until net debt reaches $15 billion; (ii) when net debt is between $12 billion and $15 billion, free cash flow allocation will be 75% to shareholder returns and 25% to the balance sheet; and (iii) when net debt is at or below $12 billion, free cash flow allocation will be 100% to shareholder returns. Free cash flow is a non-GAAP financial measure. Canadian Natural considers free cash flow a key measure in demonstrating Canadian Natural's ability to generate cash flow to fund future growth through capital investment, pay returns to shareholders and to repay or maintain net debt levels, pursuant to the free cash flow allocation policy. Canadian Natural's free cash flow is used to determine the targeted amount of shareholder returns after dividends. Free cash flow is calculated as adjusted funds flow less dividends on common shares, net capital expenditures and abandonment expenditures.

In connection with the NCIB, Canadian Natural expects to enter into an automatic share purchase plan ("ASPP") in relation to purchases made by it under the NCIB. The ASPP has been pre-cleared by the TSX and is expected to be implemented on March 13, 2025. The ASPP is intended to facilitate repurchases of common shares at times under the NCIB when Canadian Natural would ordinarily not be permitted to make purchases due to regulatory restrictions or customary self-imposed blackout periods. Before the commencement of any particular trading black-out period, Canadian Natural may, but is not required to, instruct its designated broker to make purchases of common shares under the NCIB during the ensuing black-out period in accordance with the terms of the ASPP. Such purchases will be determined by the designated broker at its sole discretion based on purchasing parameters set by Canadian Natural in accordance with the rules of the TSX, applicable securities laws and the terms of the ASPP. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. The ASPP will terminate on March 6, 2026. The ASPP constitutes an "automatic securities purchase plan" under applicable Canadian securities law. Outside of pre-determined blackout periods, common shares may be purchased under the NCIB based on management's discretion, in compliance with TSX rules and applicable securities laws.

As of February 28, 2025, after giving effect to the two for one common share split effective for shareholders of record as of market close on June 3, 2024 (the "Share Split"), Canadian Natural purchased 52,380,000 of its common shares at a weighted average price of $48.35 under its previous NCIB, which commenced on March 13, 2024 and expires on March 12, 2025 and which authorized the purchase for cancellation of up to 180,462,858 common shares (after giving effect to the Share Split).

Canadian Natural is a senior crude oil and natural gas production company, with continuing operations in its core areas located in Western Canada, the U.K. portion of the North Sea and Offshore Africa.

	CANADIAN NATURAL RESOURCES LIMITED T (403) 517-6700 F (403) 517-7350 E ir@cnrl.com 2100, 855 - 2 Street S.W. Calgary, Alberta, T2P 4J8 www.cnrl.com
	SCOTT G. STAUTH President MARK A. STAINTHORPE Chief Financial Officer LANCE J. CASSON Manager, Investor Relations    Trading Symbol - CNQ Toronto Stock Exchange New York Stock Exchange

 

Certain information regarding the Company contained herein may constitute forward-looking statements under applicable securities laws. Such statements are subject to known or unknown risks and uncertainties that may cause actual results to differ materially from those anticipated or implied in the forward-looking statements. The Company does not undertake to update forward-looking statements except as required by applicable securities laws. Refer to our website for detailed forward-looking statements and notes regarding Non-GAAP and Other Financial Measures at www.cnrl.com.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/244031

FAQ

How many shares can Canadian Natural Resources (CNQ) buy back under the new NCIB program?

CNQ can purchase and cancel up to 178,738,237 shares, representing 10% of the public float, between March 13, 2025, and March 12, 2026.

What is CNQ's daily purchase limit on the TSX under the new buyback program?

CNQ cannot purchase more than 2,835,635 common shares during a trading day on the TSX, which represents 25% of the average daily trading volume.

How does Canadian Natural Resources allocate its free cash flow?

CNQ allocates 60% to shareholders and 40% to balance sheet until net debt reaches $15B, 75% to shareholders when debt is $12-15B, and 100% to shareholders when debt is below $12B.

What was CNQ's share repurchase performance under the previous NCIB program?

Under the previous NCIB, CNQ purchased 52,380,000 common shares at a weighted average price of $48.35.

When will CNQ implement its automatic share purchase plan (ASPP)?

CNQ plans to implement the ASPP on March 13, 2025, allowing share repurchases during blackout periods until March 6, 2026.