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SECOND QUARTER REPORT Canadian Natural SIX MONTHS ENDED JUNE 30 , 2021 TSX & NYSE : CNQ CANADIAN NATURAL RESOURCES LIMITED 2021 SECOND QUARTER RESULTS Commenting on the Company's second quarter 2021 results , Tim McKay , President of Canadian Natural stated " Canadian Natural is in a strong position as our vast and diverse asset base delivered strong operational and financial results in Q2 / 21 , as we achieved production volumes of approximately 1,142 MBOE / d in the quarter , notwithstanding the planned turnaround at our Oil Sands Mining and Upgrading operations . Canadian Natural's long life low decline asset base generated significant free cash flow in the quarter maximizing value for our shareholders , as we balanced free cash flow to our four pillars of capital allocation ; balance sheet strength , returns to shareholders , economic resource development and opportunistic acquisitions . In the first two quarters of 2021 we have reduced net debt by approximately $ 3.1 billion , returned approximately $ 1.3 billion to our shareholders through dividends and share repurchases , maintained capital discipline and executed on various opportunistic and strategic transactions which add long term value . With the increased positive outlook for commodity prices for the remainder of 2021 , we have increased our 2021 capital budget by $ 275 million to $ 3.48 billion as we undertake lead activities for future growth opportunities . The increase includes $ 120 million for conventional and unconventional assets , $ 110 million for long life low decline assets and $ 45 million in additional well abandonment activities . These increased investments are being financed out of the repayment of the North West Redwater Partnership ( " NWRP " ) subordinated debt . This additional capital , along with strong operating performance from our existing 2021 drilling program , now has us targeting natural gas production above our previous guided production range and corporate production on a BOE basis above the mid - point of our previous guided production range for the 2021 year . As previously announced , the Oil Sands Pathways initiative to achieve net zero greenhouse gas emissions by 2050 is an unprecedented initiative by the Canadian energy industry , by which Canadian Natural and our industry partners will strengthen our leading environmental , social and governance ( " ESG " ) performance , while delivering meaningful emissions reductions and balancing sustainable economic development . Collaboration with the federal and Alberta governments on this initiative will be critical for Canada to achieve its climate goals . " Canadian Natural's Chief Financial Officer , Mark Stainthorpe , added " Canadian Natural's robust business model and world class assets delivered strong adjusted funds flow in Q2 / 21 of approximately $ 3.05 billion , resulting in approximately $ 1.5 billion in free cash flow after dividends and capital expenditures , excluding acquisitions . In Q2 / 21 , net debt was reduced by approximately $ 1.7 billion as we repaid and retired the remaining $ 2.125 billion on our non - revolving term loan originally maturing in June 2022. In addition , subsequent to quarter end , we exercised the par call option on our US $ 0.5 billion November 2021 public bond , allowing us to repay the bond early in August 2021 , capturing interest cost savings and further retiring absolute debt . Annual 2021 WTI strip pricing has continued to strengthen from Q2 / 21 quarter end and using an annual average of US $ 66 / bbl WTI , our 2021 targeted free cash flow increases significantly to a range of $ 7.2 billion to $ 7.7 billion , after dividends and net capital expenditures , excluding acquisitions . As a result of this strong free cash flow and increasing balance sheet strength achieved through 2021 , the Board of Directors has revised its share repurchase policy effective July 1 , 2021 and has authorized management to increase returns to shareholders through incremental share repurchases of approximately 1 % of shares outstanding , or approximately 11 million shares , per quarter . Additionally , the new policy provides that once the Company reaches an absolute debt level of $ 15 billion , currently targeted to occur in Q4 / 21 , 50 % of free cash flow is targeted to be allocated to share repurchases under the Company's Normal Course Issuer Bid ( " NCIB " ) , with the remaining 50 % allocated to further strengthening of the Company's balance sheet . "