Oilsands giant CNRL pays down debt, trims 2025 capital budget amid Trump-fuelled oil price slump

CNRL president Scott Stauth (right) declined to say whether deteriorating oil prices would result in a further capex cut or reduced activity in its conventional operations. Photo by Gavin Young/Postmedia files

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The Calgary-based oilsands major beat analysts’ expectations on cash flow and notched another all-time quarterly production record in its first quarter, the results of which were released Thursday, averaging more than 1.58 million barrels of oil equivalent per day on the strength of its US$6-billion acquisition of Chevron Canada Ltd.’s Alberta assets last year.

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CNRL and other Canadian oilpatch firms had strong first quarters, but have faced questions about how they plan to weather the steep slide in crude prices that accelerated in April after Trump enacted worldwide tariffs.

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CNRL reported adjusted net earnings from operations of $2.4 billion for the three months ending March 31, compared to $1.5 billion in the same period last year.

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But despite the strong quarter, CNRL said it is reducing its 2025 capital budget by $100 million to $6.05 billion, though the company said the trim is the result of finding cost efficiencies and not from plans to slash production targets. The company reaffirmed its full-year target range of 1.51 million boe/d to almost 1.56 boe/d.

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CNRL president Scott Stauth declined to say whether deteriorating oil prices would result in a further capex cut or reduced activity in its conventional operations, where pivoting production is typically easier and less costly than in the oilsands.

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“Every week, we monitor our cash flows at our management committee to stay on top (of things), and if we have to make any changes to our capital program, we can usually make that pretty quickly,” he said on a conference call on Thursday. “In the lowest possible price environments, we will make adjustments as necessary in any one of those areas.”

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CNRL’s oilsands rivals are also looking to flatten or reduce capital spending in the months ahead.

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Cenovus Energy Inc. has cut an undisclosed number of jobs and chief executive Jon McKenzie said on a conference call on Thursday that the company’s capital spending would start dropping in the fourth quarter of the year and fall below $5 billion in 2026.

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Suncor Energy Inc. chief executive Rich Kruger said the company already expects lower capital spending in 2026 of around $5.7 billion, compared to $6.1 billion this year, and there could be further cuts to come.

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“It does show (it) coming down, year on year,” he told analysts on Wednesday. “And if the business environment warrants that further, that’s exactly what we’ll evaluate as we go through our business planning process this year.”

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Conventional oil and gas producer Baytex Energy Corp. earlier this week said it expects its capital spending and production to trend towards the lower end of its guidance for 2025. It also said it is pausing share buybacks to focus on reducing debt.