Canadian Natural Resources Limited (NYSE:CNQ) Q3 2023 Earnings Call Transcript

Mark Stainthorpe: Yes, sure, Greg. I mean, in Q4, like I kind of mentioned earlier, we’re targeting strong operational performance, so given this pricing environment and our net packs, we’re looking at strong cash flow generation and free cash flow generation in the quarter. When you look at working capital, I mean, to me, the biggest thing is look, think about receivables. So, in September, very strong operational month, pricing month, but we don’t get paid for that until October. So, that’s really, one of the main drivers of the working capital. The other being, of course, when you have turnaround activity in one quarter, you tend to have the payables happen in the following quarter. So, those are just natural ways the business runs.

So, to comment on exactly what working capital will be like in the fourth quarter is somewhat difficult, but you can just kind of take that away that the receivables are one of the big things. And then as far as TMX, yes, there will be a working capital bill for TMX line fill, but that is not going to be significant to us at all.

Greg Pardy: Okay, got it.

Tim McKay: And, of course, right now, we don’t know if that’ll happen here in the fourth quarter or early into next year. Obviously, if it happens earlier this year, between now and the end of the year, that’s actually very positive in the sense that that should start to tighten in the WCS diffs and such. But we haven’t yet to be getting the information that they would be doing that, but we hope that we’ll hear from them soon on that.

Greg Pardy: Okay. Got it. Thanks, guys.

Tim McKay: Thanks, Greg.

Operator: Thank you. The next question comes from Menno Hulshof at TD Securities. Please go ahead.

Menno Hulshof: Thanks. And good morning, everyone. I will start with a question on autonomous haul trucking. One of your peers just achieved full fleet conversion with reasonable cost savings. And just going through the transcripts, I understand that you haven’t shown much of an interest in the past. But has your thinking changed at all? And if so, what could the staging for deployment of autonomous hauling look like at Horizon or even the AOSP? I believe you had a pilot going there at Jack Pine a number of years ago. Any color there would be helpful.

Tim McKay: Sure. I’ll just have Scott, because that’s a perfect lead-in for that’s his area of expertise. So, Scott, talk to that.

Scott Stauth: Thanks, Tim. So we continue to evaluate the opportunities for autonomous haul on our equipment in the mines. We have looked at it in the past number of years, we pay close attention to what our peers are doing and what’s going on in the rest of the hard-rock mining world. But at this time we’ve looked through it and reviewed it, and with a lot of the efficiencies that we’ve been able to achieve in our mining operation, we have very close to the equivalent of autonomous haul. In fact, we believe we’re at the equivalency of autonomous haul efficiencies. So from our perspective, we’ll continue to watch the technology as it improves over the years and stay abreast from the vendors of anything breaking through from news from that perspective. But really, we are quite strong in terms of our efficiencies that our folks in the mining operations have been able to deliver. So we like what we see from that perspective.

Menno Hulshof: Thanks, Scott. And just to clarify, is that pilot at Jackpine still running, or did you wind that down?

Scott Stauth: There was an original pilot years ago, but it was more from collision avoidance that Shell had carried on before our time that we took over in 2017.

Menno Hulshof: Okay, got it. And then maybe just moving on to the heavy oil program and the Lloydminster, Manville, given the re-emergence of that play, what is old is new. It looks like you drilled 34 multilaterals in the quarter. Can you just update us on what you are seeing in terms of performance? And how is the Manville competing for capital with your other liquids growth opportunities?