In commenting on the Company's 2011 budget, Allan Markin, Chairman, stated, "Canadian Natural's 2011 budget reflects our strong asset base and a continued focus on projects that provide the best returns for shareholders. We are targeting another year of significant free cash flow generation, debt reduction and a strengthening balance sheet. At the same time as we target production volumes per barrel of oil equivalent to grow by 6% in 2011, we will be investing over $2.4 billion (approximately 45% of 2011 capital expenditures) on long-term growth initiatives that provide no additional volumes in 2011 but will provide sustainable, long-term returns in 2012 and beyond."

Highlights of the 2011 budget • Equivalent production target of 645,000 boe/d to 694,000 boe/d before royalties, representing a midpoint increase of 6% from the midpoint of 2010 forecasted annual average production guidance. • Crude oil and NGLs production target of 449,000 bbl/d to 486,000 bbl/d before royalties, representing a midpoint increase of 10% from the midpoint of 2010 forecasted annual guidance. This increase reflects the following: - Primary heavy crude oil is targeted to increase 10% from 2010 volumes reflecting record drilling programs implemented in 2010 and 2011; - Production response at Pelican Lake due to the Company's ongoing conversion to polymer flood will result in production volumes being targeted to increase by 17% in 2011; - Increased production reliability at Horizon Oil Sands ("Horizon") with budgeted 2011 production targeted to range from 105,000 bbl/d to 112,000 bbl/d of SCO; approximately 19% higher than 2010; - Production increases targeted at Primrose East, North and South of 12% over 2010 levels; and, - Greater production rates of light crude oil due to a combination of acquisitions completed in 2010 and increased light crude oil capital spending over previous years resulting in approximately an 11% annual increase.

The overall increase in crude oil and NGLs production will be partially offset by production declines in Offshore West Africa and the North Sea.

• Natural gas production target of 1,177 mmcf/d to 1,246 mmcf/d before royalties,representing a midpoint decrease of 3% from the midpoint of 2010 forecasted annual guidance. This decrease reflects the Company's continued proactive reduction of natural gas drilling activity by 28% from 2010 levels as a result of the Company's short to mid term outlook for low natural gas pricing, offset somewhat by new Montney production at Septimus and acquired volumes completed over the course of 2010. • Cash flow from operations is targeted to be between $7.0 billion and $7.4 billion ($6.40 - $6.75 per common share), based upon targeted production and forward strip pricing on November 24, 2010 (WTI crude oil price of US$84.32/bbl, Western Canadian Select heavy oil differential of 22%, NYMEX natural gas price of US$4.31/mmbtu and an exchange rate of US$0.98 = C$1.00). • Capital spending in 2011 will range between approximately $5.6 billion and $6.0 billion. Approximately 45% of 2011 capital expenditures are allocated to projects that will result in long-term production growth beginning in 2012 and beyond. This $2.4 billion to $2.8 billion investment will generate more sustainable, long-term returns for the Company. • Free cash flow (cash flow after capital expenditures), is targeted between $1.0 billion and $1.8 billion based on forward strip pricing. • Crude oil and natural gas capital expenditures in North America, including Horizon Oil Sands and thermal projects but excluding acquisitions, are targeted to be $5.0 billion to $5.4 billion in 2011, representing a 52% - 64% increase in capital spending from 2010 levels.

Tags: Canadian Natural Resources Ltd