Boston, MA 04/07/2014 (wallstreetpr) – Canadian Natural Resource Ltd (USA) (NYSE:CNQ) looks well-positioned to benefit from the widely bullish oil and gas sector and its improved operations. The shares of the company are up almost 20 percent year-to-date, and this is due to a combination of favorable industry environment and solid execution within the company. Moreover, the company boasts solid financial position currently. Thus, these are expected to result in further earnings and share price growth for the company in 2014.
For this reason, CNQ comes across as an attractive energy stock play for investors who want more from a safe side.
Improving production and cash flow
The overall drop in production rate is currently moderating. This should allow the company to achieve speedy volume increase in the next few years. As production volume increases, increase in free cash flow is also expected. The company is looking to increase its free cash flow to $1 billion in the current year, significantly up from $200 million in 2013. And from 2018 onwards, free cash flow is expected to come in the range of $6 annually, as long as the right cord is achieved in production levels.
The increase in production and subsequent increase in free cash flow will definitely result in significant increase in capital return to shareholders.
Assuming that oil prices remain flat, it is possible, according to Barclay analysts, for Canadian Natural Resource Ltd (USA) (NYSE:CNQ) to achieve long-term annual return to shareholder of 20 percent from the current year to 2017.
Investment opportunity
Given that Canadian Natural Resource Ltd (USA) (NYSE:CNQ) boasts solid asset base and strong portfolio of underway projects, the company is able to achieve higher production and build significant oil reserve. In the midst of improved production, the stable prices of crude oil and natural gas liquids should increase free cash flow and profitability in the company. Thus, the company looks like a compelling investment opportunity for investors seeking for a solid and safe entry into the energy sector.
