Canadian Natural Resources Ltd. CNQ declared the pricing of medium-term notes worth C$500 million. The notes are set to mature on Aug 14, 2020.
This independent exploration and production company announced that the notes are priced at a premium − C$101.932 per $100 amount principal – and will yield 2.49% on maturity. It is to be noted that the notes will be sold only to Canadian investors.
The company will use the net proceeds from the offering for general corporate activities, associated with core operations, and repaying debt.
The Calgary, Alberta-based company has a broad portfolio of low-risk exploration and development projects that yield long-term volume growth at above-average rates. The company’s diverse asset base both geographically and in terms of products, comprising approximately 33% natural gas and 67% crude oil, with the bulk of production located in G8 countries, is commendable.
However, being an upstream energy firm, the persistent weakness in crude prices has put pressure on Canadian Natural’s financials as it has been able to extract less value for its products. Most importantly, as a result of the plunge in oil price compelled the company incurred a loss of 23 Canadian cents (approximately 3 U.S. cents) per share in first-quarter 2015 against the Zacks Consensus Estimate of earnings of 4 U.S. cents and the year-ago quarter’s profit of 57 Canadian cents.
Weighing such factors, Canadian Natural currently carries a Zacks Rank #3 (Hold), which implies that the stock will perform in line with the broader U.S. equity market over the next one to three months.
However, some better-ranked players in the energy sector are Pembina Pipeline Corporation PBA, LRR Energy LP LRE and WPX Energy Inc. WPX sporting a Zacks Rank #1 (Strong Buy).
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