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FIRST QUARTER REPORT Canadian Natural THREE MONTHS ENDED MARCH 31 , 2021 TSX & NYSE : CNQ CANADIAN NATURAL RESOURCES LIMITED 2021 FIRST QUARTER RESULTS Commenting on the Company's first quarter 2021 results , Tim McKay , President of Canadian Natural stated " The COVID - 19 pandemic continues to challenge our everyday living and the way we operate our businesses . With our strong measures in place we have minimized impacts on our operations , but it remains a daily challenge for our field staff to do it safe and do it right . As the global vaccine distribution increases and crude oil demand recovers , especially in the United States , we are seeing improved commodity pricing , and when combined with our top tier execution and disciplined capital program we are well positioned to generate significant free cash flow in 2021 . Our first quarter results were strong as we achieved record quarterly production of approximately 1,246 MBOE / d and record quarterly liquids production of over 979,000 bbl / d , as a result of our effective and efficient operations and high operating levels . As our large and diverse asset base realized strong netbacks , we drove significant adjusted funds flow in the quarter of over $ 2.7 billion . In Q1 / 21 our Oil Sands Mining and Upgrading segment continued to achieve strong operating results with record quarterly production of approximately 468,800 bbl / d of high value Synthetic Crude Oil ( " SCO " ) and industry leading operating costs of $ 19.82 / bbl ( US $ 15.66 / bbl ) , a decrease of 5 % from Q1 / 20 levels , despite increased energy costs . " Canadian Natural's Chief Financial Officer , Mark Stainthorpe , added " Canadian Natural is in a strong financial position . Our robust business model delivered strong financial results with net earnings of approximately $ 1.4 billion and adjusted net earnings of over $ 1.2 billion in the first quarter . Our top tier operating results generated strong quarterly free cash flow of approximately $ 1.4 billion after capital expenditures and dividends . Accordingly our balance sheet strengthened significantly in Q1 / 21 , as we were able to reduce our net long - term debt by approximately $ 1.4 billion in Q1 / 21 . Our first quarter debt reduction included the permanent repayment and cancellation of term debt totaling approximately $ 1.0 billion . Subsequent to quarter end we permanently repaid and cancelled approximately $ 0.7 billion of additional term debt . Annual 2021 WTI strip pricing has strengthened and using approximately US $ 60 / bbl our targeted free cash flow increases significantly to $ 5.7 billion to $ 6.2 billion , after our budgeted capital program of approximately $ 3.2 billion and dividends of approximately $ 2.2 billion . As a result our balance sheet is targeted to further strengthen throughout 2021 , with debt to adjusted EBITDA targeted to improve to approximately 1.1x and debt to book capitalization targeted to improve to approximately 29 % , at the mid - point of our targeted free cash flow range . "