SWOT Analysis - Canadian Natural Resources (CNQ)

Canadian Natural Resources (CNR) is a significant producer of natural gas in Canada, representing approximately 10% of western Canadian output. Its undeveloped land base represents the second largest portfolio in the Western Canadian Sedimentary Basin (WCSB) and it also has an exposure to virtually every play type found in the basin. Strong market position allows the company to take advantage of economies of the scale and reduce risk. However, increased cost pressures and environmental regulations may adversely impact the company’s future net earnings, cash flow, and capital projects.

Strengths

Leadership position in Canada - The company’s production is concentrated in five North American core regions: Northeast British Columbia, Northwest Alberta, the Foothills, the Northern Plains, and the Southern Plains. In addition, the company holds extensive leases in the Athabasca region that are estimated to contain approximately 16 billion barrels of original bitumen in place. It also dominates the infrastructure in its core areas allowing it to control its cost. Moreover, natural gas remains its largest single product offering, representing 45% of its production mix in 2008. Strong market position allows the company to take advantage of economies of the scale and reduce risk.

Strong oil reserves - The company has strong oil reserves. CNR’s crude oil and NGLs proved reserves, before royalties increased from 1,123 million barrels (mmbbl) in FY2004 to 1,543 mmbbl in FY 2007, at a CAGR of 11%. Further, the crude oil and NGLs proved reserves, after royalties, also increased from 1,066 mmbbl in FY2004 to 1,358 mmbbl in FY2007. The company’s strong oil reserves give it a significant competitive advantage, especially when a large proportion of global oil fields are reaching maturity.

Strategic land base - CNR has the second largest undeveloped land inventory in the WCSB, with undeveloped net acreage in excess of 12 million acres, excluding leases at the Horizon Project. The strength of the company’s land base is a result of continued land purchases, and strategic acquisitions including the incorporation of the ACC properties that were acquired in late 2006. The vast majority of the company’s land base is positioned to utilize existing owned and operated infrastructure and also strategically positions CNR. Further, it also maximizes the benefit of new play types developed by the company and industry. This strong concentrated land base affords significant opportunities to control operating costs, along with minimizing finding and on-stream costs.

Weaknesses

Poor performance of North Sea geographic segment - The revenues and the crude oil production from CNR’s North Sea geographic segment have been witnessing a decline over the years. The revenues from North Sea declined from C$1,656 million (approximately $1,490.4 million) in FY2005 to C$1,594 million (approximately $1,434.6 million) in FY2007, at a CAGR of 1.9%. Further, crude oil production before royalties from North Sea declined from 68,593 barrels per day (bbl/d) in FY2005 to 55,933 bbl/d in FY2007, at a CAGR of 9.7%. The decline in production was due to lower than anticipated production from the Lyell Field development and water injection problems experienced during the year at the Ninian Field.

Declining natural gas reserves - The company has witnessed a significant decline in its natural gas reserves in 2008 compared with FY2006. Natural gas remains its largest single product offering, representing 45% of its production mix in 2008. The natural gas reserves, before royalties, declined from 4,613 billion cubic feet (Bcf) in FY2006 to 4,435 Bcf in 2008, representing a decline of 3.9%. Further, its natural gas reserves, after royalties, declined from 3,798 Bcf in FY2006 to 3,666 Bcf in 2008, representing a decline of 3.5%.

Opportunities

Rising demand for oil and natural gas - The strong economic growth in the developing countries will drive global oil and natural gas demand. The overall global energy demand is expected to grow about 1.6% annually to 2030. With the growing transportation sector, the demand for liquid fuels is expected to rise at a rate of 1.4% per year. Driven by increasing demand for electricity, natural gas demand is expected to increase by 1.7% annually to 2030. The projected increase in demand for liquid fuels and natural gas in the coming years would help the company boost its sales and strengthen its financial base.

Horizon Oil Sands Project - The Horizon Oil Sands Project is located 70 kilometres north of Fort McMurray, where CNR owns and operates leases covering 115,000 acres through lease arrangements with the Province of Alberta.The Horizon Project includes a surface oil sands mining and bitumen extraction plant coupled with on-site bitumen upgrading and associated infrastructure to produce synthetic crude oil. Drilling on these leases indicates an estimated 16 billion barrels of bitumen in place, with approximately 6-8 billion recoverable barrels under existing mining technologies. The Horizon Project asset is substantial and is anticipated to provide significant free cash flow in the future to CNR.

Threats

Environmental regulations - CNR’s businesses are subject to numerous laws and regulations relating to the protection of the environment.The company’s associated risk management strategies focus on working with legislators and regulators to ensure that any new or revised regulations reflect a balanced approach to sustainable development. Further, specific measures in response to existing or new legislation include focus on the company’s energy efficiency, air emissions management, released water quality, reduced fresh water use, and minimization of the impact on the landscape.

Increasing cost pressures - Strong commodity prices in recent years have resulted in increased demand and costs for oilfield services. This has lead to inflationary production and capital cost pressures throughout the North American oil and gas industry, particularly related to natural gas drilling activity and oil sands developments. The strong commodity price environment has also impacted costs in international basins. Specifically, the high demand for offshore drilling rigs continues and securing rigs on commercially acceptable terms is an ongoing challenge.

Adverse weather conditions - Adverse weather conditions could pose a substantial threat to the company both in terms of curtailed activity and its potential effect on natural gas prices. Warmer than normal weather can impact the demand for natural gas, resulting in lower realized price for the company.

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10 Ways to Cut Your Moving Costs

Moving can be a very chaotic and expensive task, one that needs to be accomplished very carefully. A move carried out in haste can bring about several unnecessary problems. Almost everyone looks for cheap movers. After all, most of us want to save on out of pocket expenses but there are several disadvantages of selecting cheap movers. There are professional moving companies, who offer competitive rates that are easily affordable by everyone. However, there are certain techniques or methods of preparation that can also help you minimize your expenses.

When planning your moving budget, it is very important to keep a check on the outflow of cash. This will make you better prepared to understand the unnecessary expenses. Create a budget template in Excel or Microsoft Word—this will make your calculations easier.

Decide if you will hire a professional moving company or you will do it yourself. If you are hiring a mover, collect quotes from at least three different professional moving companies and include the highest quote in your budget.

Check all the items that you are moving. This will help you evaluate if you need more insurance because the default insurance offered by movers might not be sufficient for you. Along with added insurance, find out if you require extra services.

Because of rising fuel costs and a shortage of drivers, the cost of a full service mover has risen in the past few years. Anything you can do yourself—even if seemingly small—will help cut your moving bill and give you extra money to spend on other relocation costs (like the pizza and beer for after your move).


1. Reduce your load. Get rid of household items that you no longer need. Hold a garage sale and leave books with friends, the local library or sell them to a used bookstore. Anything you can't sell, give to a local charity. Weight equals money. The less weight, the less money. It's that simple.

2. Pack it yourself. Packing services performed by the mover are expensive and could amount to 25% of the moving cost. Even if you don't want to pack it all yourself, you can always do a partial pack, and have the movers handle the rest. For example, items that are nonbreakable such as linens and bedding can be packed easily without the risk of damage. Every box you pack yourself is money in your pocket.

3. Save on packing. Luggage and carrying bags are perfect for packing sheets, towels and clothing. Also, the bottoms of wardrobe boxes are great for bulky, lightweight items. Be wary of packing tips that might save you money initially but won't protect your stuff, for example, using newspaper instead of bubble wrap. Sure, it might save a few bucks, but in the end, is breaking something worth it?

4. Drive your own moving truck
Using a full service moving company is extremely expensive. You can rent your own truck and hire movers to help load up and unload.

5. Recruit help from friends or family
If you have friends or family in the area, getting them to help you load up and/or unload is a blessing, because it saves time and money. If you’re going to recruit help, make it a fun event. Order some food, and make it a moving party.

6. Avoid the busy season. If you are using a full service moving company, avoid June, July, and August as these are the most expensive months to move because of demand for moving services. Also, try to plan your move during the middle of the month—rates are higher at the beginning and the end because of the large number of apartment leases with month-end dates. If you can be flexible with your move-in times, you can also save money because the moving company can combine shipments.

7. Get organized. Time is Money. Color-code boxes according to the room they belong in so they all end up in the same place, saving time for both you and your mover.

8. Avoid storage costs by moving into your new property immediately and make sure that you have payment ready for when the truck arrives. Any delay could result in storage-in-transit fees if your things have to be stored until they can be unloaded and after the move is paid in full.

9. Make sure you are insured. Your existing homeowner’s insurance policy might cover your move so you don't have to buy additional moving protection.

10. Your move may be tax-deductible. Keep all receipts and visit the Canada Revenue Agency's website for specific details about which moving expenses you can claim, or consult a professional accountant to maximize your tax return.

Canada Auto Sales for August 2009

Here is the new auto sales statistics in Canada for August, 2009 compared to same period last year.

Acura: +26.4% to 1,644
Audi: +89.6% to 1,058
BMW: +20.5% to 2,292
Chrysler: -6.8% to 14,393
Ford: +7% to 22,166
General Motors: -27.5% to 23,018
Honda: -21.8% to 10,574
Hyundai: +38.4% to 10,418
Infiniti: -13.6% to 604
Jaguar: -18.1% to 68
Kia: +20.6% to 4,672
Land Rover: -27.2% to 134
Lexus: +31.3% to 1,532
Mazda: -10.7% to 6,880
Mercedes-Benz: +20.5% to 1,992
Mini: -9.5% to 457
Mitsubishi: +24.9% to 1,860
Nissan: +4.2% to 7,071
Porsche: +7.1% to 120
Saab: -79.8% to 36
smart: -30.4% to 268
Subaru: +4.2% to 1,940
Suzuki: +1.3% to 1,315
Toyota: -24.2% to 16,707
Volkswagen: -5% to 3,605
Volvo: +16.3% to 527

August 2009 Net Worth Update

After I sold my car, I bought a new car using some money from my saving account and non-registered investment account. I am not a new car buyer in general, but I bought it for the following reasons,

1. Safety - As Canadian's winter could take as long as 6 months, this is my primary reason to sell my old car earlier this year, and get all-wheel-drive (AWD) vehicle for safety purposes.

2. Cash Purchase Promotion - almost 10% cash back + another 10% off the original price. This justifies a bit new car depreciation cost.

3. Re-sale value - after some research, I found that Japanese AWD vehicles could hold their resale value the most.

Here are the assets/liabilities result for August, 2009:

Assets

Vehicles: $26,000

Cash: $6,000

Savings: $14,400

TFSA: $5,100

Registered Investment Account: $23,200

Non-Registered Investment Account: $8,400

Total Assets: $8,3100

Debts

Credit Card Debt: $1,600

Total Debts: $1,600

Total Net Worth: $81,500

Started 2009 with Net Worth: $65300

Year-to-Date Gain/Loss: +24.81%

My net worth goal at the end of year 2009 is $90,000, and I still have $8,500 to make in the next 4 months.