Record natural gas production and rising commodity prices propelled Canadian Natural Resources Ltd. (CNRL) in the first three months of this year, enabling shareholder returns and corporate debt reduction.

Natural gas production jumped 25% in 1Q2022 from a year earlier to 2 Bcf/d, management noted. Liquids production hovered at 945,809 bpd from 979,352 due to plant maintenance and processing limitations.

The gas gains followed a decision last year to increase production from Montney Shale, following a series of deals that took its holdings to 1.3 million acres.

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“Our unique, diverse, low-decline, long-duration asset base with large, low-risk, high-value reserves is a differentiator,” said Chairman Tim McKay. “We are resilient through the commodity price cycle while generating substantial returns in the current environment.”

Major oil sands operations in northern Alberta produced 691,569 bbls/d in the quarter, compared to 736,333 bbls/d in 1Q2021. Throughputs were 62% upgraded synthetic crude oil (SCO) and 38% low-grade bitumen.

CNRL reached an average natural gas price of $5.26/MMcf in 1Q2022, compared to $3.42 a year earlier. The average price for all grades of liquids almost doubled from $52.68 to $93.54/bbl.

Higher liquids prices more than offset higher costs for natural gas used in thermal oil sands processes, management noted.

SCO production costs rose 24% to $24.60/bbl, while bitumen costs rose 26% to $14.35.

The Calgary firm reports in Canadian dollars ($1.00 CAD/80 cents US).

Net earnings rose to $3.1 billion ($2.63/share) from earnings of $1.37 billion a year ago ($1.16). Corporate debt fell by $1.5 billion to $13.8 billion.

CNRL paid $1.8 billion in dividends and share buybacks during the quarter. Total investor returns through early May had reached $3.1 billion.

While keeping spending at budgeted levels ahead of current highs in oil and gas prices, management promised further increases for investors after debt repayments further reduced the burden on businesses to $8 billion.