OREANDA-NEWS. Canadian Natural's Exploration and Production ("E&P") assets continue to generate free cash flow and support the transition to a longer life and lower decline asset base.

Q1/15 operational highlights include: Record overall quarterly corporate production of 898,053 BOE/d driven by records in both quarterly crude oil and NGL, and natural gas production volumes.

Corporate quarterly crude oil and NGL production reached record levels averaging 602,809 bbl/d for Q1/15, an increase of 23% and 5% from Q1/14 and Q4/14 levels respectively.

The Company's E&P crude oil and NGL segment showed strong overall production volumes driven by: a. Record North America light crude oil and NGL quarterly production volumes of 97,561 bbl/d. b. Record thermal in situ oil sands ("thermal") quarterly production performance of 146,086 bbl/d. c. Strong primary heavy crude oil production volumes of 137,687 bbl/d. d. Strong Pelican Lake quarterly production volumes of 51,085 bbl/d. e. International quarterly production volumes of 36,224 bbl/d.

Record quarterly production volumes of 134,166 bbl/d were achieved at Horizon Oil Sands ("Horizon"). Natural gas production achieved record quarterly volumes averaging 1,771 MMcf/d in Q1/15, an increase of 51% and 2% from Q1/14 and Q4/14 levels respectively.

Canadian Natural Resources Limited 3 Canadian Natural's 2015 capital expenditure guidance has been updated to reflect capital cost savings across all business segments. The Company's targeted 2015 capital expenditure guidance has been reduced further by approximately USD 300 million, as compared to capital guidance released in March 2015, to approximately USD 5.7 billion. Annual production guidance remains unchanged and is targeted to deliver 11% annual production growth in 2015 over 2014 levels.

Canadian Natural targets to achieve approximately USD 390 million of additional operating costs savings in 2015 in comparison to the 2015 original budgeted operating cost targets announced in November 2014. In comparison to 2014, these savings plus the initiatives underway through effective and efficient operations, innovation initiatives, reduced energy costs and higher production volumes result in 2015 operating costs being approximately USD 925 million less than what they would have been at 2014 unit cost rates. Overall corporate crude oil and NGL operating costs of USD 19.03/bbl in Q1/15 decreased by USD 5.33/bbl and USD 3.01/bbl from Q1/14 and Q4/14 levels, respectively. a. In Q1/15, North America E&P (including thermal) crude oil and NGL quarterly operating costs were USD 13.75/bbl, which decreased by 16% and 4% from Q1/14 and Q4/14 levels respectively. Annual operating cost guidance is targeted to range from \\$12.50/bbl to USD 14.50/bbl. b.

Horizon quarterly operating costs showed significant improvement at USD 29.73/bbl in Q1/15, with decreases of 28% from \\$41.11/bbl in Q1/14 and 13% from USD 34.34/bbl in Q4/14. The annual operating cost guidance has been reduced and is targeted to range from USD 31.00/bbl to USD 34.00/bbl in 2015. Strong operating costs reflect safe, steady, reliable production and improved operating efficiencies.

In Q1/15, North America natural gas operating costs were USD 1.38/Mcf, a 10% decrease from Q1/14 levels of USD 1.54/Mcf, reflecting a continued focus on cost optimization after acquiring higher cost production volumes in 2014. In 2015, the Company will continue its strong, effective and efficient operations with a focus on cost optimization. As a result, annual operating cost guidance has been reduced and is targeted to range from \\$1.25/Mcf to USD 1.35/Mcf. Canadian Natural generated cash flow from operations of approximately USD 1.4 billion in Q1/15 compared to approximately USD 2.1 billion in Q1/14 and USD 2.4 billion in Q4/14.

The decrease in Q1/15 from Q1/14 and Q4/14 primarily reflects lower crude oil, NGL and natural gas realized pricing in North America, lower synthetic crude oil ("SCO") realized pricing, partially offset by higher North America crude oil and NGL and SCO sales volumes and the impact of a weaker Canadian dollar as compared to the US dollar.

The Company incurred a net loss in Q1/15 of USD 252 million, compared to net earnings of USD 622 million in Q1/14 and USD 1,198 million in Q4/14. Adjusted net earnings from operations for Q1/15 were USD 21 million, compared to adjusted net earnings of USD 921 million in Q1/14 and USD 756 million in Q4/14. Changes in net earnings and adjusted net earnings largely reflect the changes in cash flow. Canadian Natural is continuing its review of its royalty lands and royalty revenue portfolio and the best options to maximize shareholder value. Options for a final strategy as it relates to its fee title and royalty lands are as follows: Divestiture of the portfolio assets, Spin-off of the portfolio assets (IPO), or Retention of the portfolio assets in their current state.

The development of leased acreage is ongoing and lease requests on undeveloped acreage continue to be evaluated. Q4/14 production volumes on the royalty lands increased 3% and 14% from Q3/14 and Q2/14 levels respectively. Drilling activity has been strong on the Company's royalty lands with 144 wells drilled in Q4/14 and 75 wells drilled in Q1/15.