Canadian Natural Resources rises as dividend hike outweighs Q4 miss (NYSE:CNQ)

Canadian Natural Resources (NYSE:CNQ) +2.3% in Thursday’s trading as its pledge to return 100% of its free cash flow to shareholders after hitting a C$10B net debt target offsets lower than expected Q4 adjusted earnings.

The company said it will raise its quarterly dividend to C$0.90/share from C$0.85/share and will enhance its free cash flow allocation policy to accelerate incremental shareholder returns to 100% of free cash flow when net debt reaches C$10B, changed from the previous $8B net debt level.

The changes reflect $10.7B in debt reduction during the last two years as well as increases in oil and gas production and the reserve base.

Q4 net earnings dropped to C$1.52B, or C$1.36/share, from C$2.53B, or C$2.14/share, in the year-earlier quarter, and adjusted funds flow fell to C$4.18B, or C$3.73/share, from C$4.34B, or C$3.66/share, a year ago.

Q4 production slipped 1.5% Y/Y to 1.29M boe/day, hit by severe winter weather that forced the company to complete multiple mining equipment repairs; output of natural gas rose, while crude oil and natural gas liquids fell.

For FY 2022, production rose 4% Y/Y to a record 1.28M boe/day, with record annual natural gas output of 2.1B cf/day.

Canadian Natural Resources (CNQ) shares have gained 13.5% so far this year and 8% during the past 12 months.