EXHIBIT 4
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SUPPLEMENTARY
OIL & GAS
INFORMATION (UNAUDITED)
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This supplementary oil and natural gas information is provided in accordance
with the United States FAS 69, "Disclosures about Oil and Gas Producing
Activities", and where applicable is reconciled to the US GAAP financial
information.
NET PROVED OIL AND NATURAL GAS RESERVES
The Company retains independent petroleum engineering consultants to evaluate
the majority of the Company's proved oil and natural gas reserves, with the
remainder evaluated by the Company's internal petroleum engineers.
o For the year ended December 31, 2003, the reports by Sproule Associates
Limited ("Sproule") covered 100% of the Company's reserves;
o For the year ended December 31, 2002, the reports by Sproule covered 89% of
the Company's reserves; and
o For the year ended December 31, 2001, the reports by Sproule covered 91% of
the Company's reserves.
Proved oil and natural gas reserves are the estimated quantities of oil, natural
gas and natural gas liquids that geological and engineering data demonstrate
with reasonable certainty to be recoverable in future years from known
reservoirs under existing economic and operating conditions. Proved developed
reserves are reserves that can be expected to be recovered from existing wells
with existing equipment and operating methods.
Estimates of oil and natural gas reserves are subject to uncertainty and will
change as additional information regarding producing fields and technology
becomes available and as future economic and operating conditions change.
The following table summarizes the Company's proved and proved developed oil and
natural gas reserves, net of royalties, as at December 31, 2003, 2002 and 2001:
OIL AND NATURAL GAS LIQUIDS (mmbbl) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Net proved reserves
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RESERVES, DECEMBER 31, 2000 568 93 30 691
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Extensions and discoveries 13 -- 37 50
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Purchases of reserves in place 14 -- 8 22
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Sales of reserves in place (1) -- -- (1)
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Production (54) (13) (1) (68)
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Revisions of previous estimates 43 (2) (14) 27
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RESERVES, DECEMBER 31, 2001 583 78 60 721
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Extensions and discoveries 26 1 14 41
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Purchases of reserves in place 44 114 -- 158
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Sales of reserves in place (1) (18) -- (19)
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Production (55) (13) (2) (70)
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Revisions of previous estimates (26) 40 3 17
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RESERVES, DECEMBER 31, 2002 571 202 75 848
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Extensions and discoveries 55 -- 13 68
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Improved recovery 9 -- -- 9
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Purchases of reserves in place 7 27 -- 34
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Sales of reserves in place -- -- -- --
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Production (56) (21) (4) (81)
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Revisions of previous estimates 2 14 1 17
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RESERVES, DECEMBER 31, 2003 588 222 85 895
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Net proved developed reserves:
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December 31, 2000 328 61 2 391
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December 31, 2001 344 51 20 415
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December 31, 2002 340 107 27 474
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DECEMBER 31, 2003 348 138 23 509
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82 ANNUAL REPORT 2003
NATURAL GAS (bcf) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Net proved reserves
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RESERVES, DECEMBER 31, 2000 1,895 91 53 2,039
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Extensions and discoveries 379 -- -- 379
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Purchases of reserves in place 134 -- 23 157
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Sales of reserves in place (20) -- -- (20)
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Production (255) (4) -- (259)
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Revisions of previous estimates (69) 7 (9) (71)
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RESERVES, DECEMBER 31, 2001 2,064 94 67 2,225
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Extensions and discoveries 106 -- 4 110
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Purchases of reserves in place 699 18 -- 717
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Sales of reserves in place (3) (56) -- (59)
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Production (346) (10) (1) (357)
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Revision of previous estimates (74) 25 1 (48)
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RESERVES, DECEMBER 31, 2002 2,446 71 71 2,588
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Extensions and discoveries 301 -- 6 307
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Improved recovery 8 -- -- 8
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Purchases of reserves in place 50 19 -- 69
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Sales of reserves in place (3) -- -- (3)
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Production (355) (17) (3) (375)
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Revision of previous estimates (21) (11) (10) (42)
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RESERVES, DECEMBER 31, 2003 2,426 62 64 2,552
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Net proved developed reserves:
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December 31, 2000 1,569 32 -- 1,601
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December 31, 2001 1,845 19 16 1,880
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December 31, 2002 2,185 57 27 2,269
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DECEMBER 31, 2003 2,140 46 12 2,198
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CAPITALIZED COSTS RELATED TO OIL AND NATURAL GAS ACTIVITIES
2003
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Proved properties $ 15,125 $ 1,917 $ 568 $ 17,610
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Unproved properties 789 56 237 1,082
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15,914 1,973 805 18,692
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Less: accumulated depletion and
depreciation (4,984) (534) (140) (5,658)
===========================================================================================================
Net capitalized costs $ 10,930 $ 1,439 $ 665 $ 13,034
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2002
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Proved properties $ 13,197 $ 1,559 $ 480 $ 15,236
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Unproved properties 667 62 132 861
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13,864 1,621 612 16,097
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Less: accumulated depletion and
depreciation (3,679) (344) (94) (4,117)
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Net capitalized costs $ 10,185 $ 1,277 $ 518 $ 11,980
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2001
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Proved properties $ 9,001 $ 991 $ 377 $ 10,369
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Unproved properties 424 60 48 532
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9,425 1,051 425 10,901
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Less: accumulated depletion and
depreciation (2,694) (185) (15) (2,894)
Net capitalized costs $ 6,731 $ 866 $ 410 $ 8,007
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83 ANNUAL REPORT 2003
Supplementary oil & gas information (unaudtied)
COSTS INCURRED IN OIL AND NATURAL GAS ACTIVITIES
2003
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Property acquisitions
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Proved $ 236 $ 100 $ -- $ 336
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Unproved 116 23 -- 139
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Exploration 190 47 28 265
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Development 1,227 193 148 1,568
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Finding and development costs 1,769 363 176 2,308
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Asset retirement costs 80 59 9 148
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Actual retirement expenditures (30) (1) (9) (40)
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Costs incurred $ 1,819 $ 421 $ 176 $ 2,416
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2002
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Property acquisitions
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Proved $ 3,367 $ 373 $ -- $ 3,740
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Unproved 369 28 30 427
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Exploration 96 10 81 187
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Development 607 145 74 826
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Costs incurred $ 4,439 $ 556 $ 185 $ 5,180
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2001
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Property acquisitions
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Proved $ 647 $ -- $ 62 $ 709
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Unproved 73 4 -- 77
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Exploration 61 25 64 150
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Development 848 68 78 994
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Costs incurred $ 1,629 $ 97 $ 204 $ 1,930
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RESULTS OF OPERATIONS FROM OIL AND NATURAL GAS PRODUCING ACTIVITIES
The Company's results of operations from oil and natural gas producing activities for the years ended
December 31, 2003, 2002 and 2001 are summarized in the following tables:
2003
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Oil and natural gas revenue, net of royalties $ 3,961 $ 962 $ 150 $ 5,073
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Production (845) (314) (38) (1,197)
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Transportation (263) (30) (1) (294)
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Depletion, depreciation and amortization (1,203) (250) (42) (1,495)
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Accretion of asset retirement obligation (23) (39) (1) (63)
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Petroleum revenue tax -- (97) -- (97)
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Income tax (673) (93) (24) (790)
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Results of operations $ 954 $ 139 $ 44 $ 1,137
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2002
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Oil and natural gas revenue, net of royalties $ 3,045 $ 579 $ 99 $ 3,723
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Production (656) (229) (35) (920)
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Transportation (273) (20) -- (293)
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Depletion, depreciation and amortization (1,024) (193) (80) (1,297)
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Petroleum revenue tax -- (51) -- (51)
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Income tax (431) (34) 11 (454)
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Results of operations $ 661 $ 52 $ (5) $ 708
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2001
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Oil and natural gas revenue, net of royalties $ 2,610 $ 506 $ 41 $ 3,157
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Production (597) (123) (27) (747)
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Transportation (166) (11) -- (177)
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Depletion, depreciation and amortization (737) (129) (24) (890)
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Loss on sale of US assets (24) -- -- (24)
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Petroleum revenue tax -- (59) -- (59)
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Income tax (447) (55) 3 (499)
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Results of operations $ 639 $ 129 $ (7) $ 761
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84 CANADIAN NATURAL
STANDARDIZED MEASURE OF DISCOUNTED FUTURE NET CASH FLOWS FROM PROVED OIL AND
NATURAL GAS RESERVES AND CHANGES THEREIN
The following standardized measure of discounted future net cash flows from
proved oil and natural gas reserves has been computed using year-end sales
prices and costs and year-end statutory income tax rates. A discount factor of
10% has been applied in determining the standardized measure of discounted
future net cash flows. The Company does not believe that the standardized
measure of discounted future net cash flows will be representative of actual
future net cash flows and should not be considered to represent the fair value
of the oil and natural gas properties. Actual net cash flows will differ from
the presented estimated future net cash flows due to several factors including:
o Future production will include production not only from proved properties,
but may also include production from probable and potential reserves;
o Future production of oil and natural gas from proved properties will differ
from reserves estimated;
o Future production rates will vary from those estimated;
o Future rather than year-end sales prices and costs will apply;
o Economic factors such as interest rates, income tax rates, regulatory and
fiscal environments and operating conditions will change;
o Future estimated income taxes do not take into account the effects of
future exploration expenditures; and
o Future development and site restoration costs will differ from those
estimated.
Future net revenues, development, production and restoration costs have been
based upon the estimates referred to above.
The following tables summarize the Company's future net cash flows relating to
proved oil and natural gas reserves based on the standardized measure as
prescribed in FAS 69:
2003
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Future cash inflows $ 32,720 $ 9,099 $ 3,192 $ 45,011
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Future production costs (9,480) (3,015) (1,179) (13,674)
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Future development and site restoration costs (2,393) (1,749) (697) (4,839)
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Future income taxes (7,295) (2,801) -- (10,096)
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Future net cash flows 13,552 1,534 1,316 16,402
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10% annual discount for timing of
future cash flows (6,203) (336) (432) (6,971)
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Standardized measure of future net cash flows $ 7,349 $ 1,198 $ 884 $ 9,431
===========================================================================================================
2002
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Future cash inflows $ 34,980 $ 9,682 $ 3,206 $ 47,868
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Future production costs (7,238) (3,250) (911) (11,399)
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Future development and site restoration costs (1,770) (1,691) (616) (4,077)
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Future income taxes (8,046) (2,991) -- (11,037)
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Future net cash flows 17,926 1,750 1,679 21,355
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10% annual discount for timing of
future cash flows (7,361) (434) (556) (8,351)
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Standardized measure of future net cash flows $ 10,565 $ 1,316 $ 1,123 $ 13,004
===========================================================================================================
2001
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(millions of Canadian dollars) NORTH AMERICA NORTH SEA OFFSHORE WEST AFRICA TOTAL
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Future cash inflows $ 18,565 $ 3,089 $ 1,587 $ 23,241
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Future production costs (6,587) (1,368) (576) (8,531)
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Future development and site restoration costs (1,204) (354) (556) (2,114)
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Future income taxes (2,576) (549) -- (3,125)
===========================================================================================================
Future net cash flows 8,198 818 455 9,471
10% annual discount for timing of
future cash flows (3,136) (241) (133) (3,510)
===========================================================================================================
Standardized measure of future net cash flows $ 5,062 $ 577 $ 322 $ 5,961
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The principal sources of change in the standardized measure of discounted future
net cash flows are summarized in the following table:
(millions of Canadian dollars) 2003 2002 2001
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Sales of oil and natural gas produced, net of production costs $ (3,582) $ (2,510) $ (2,232)
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Net changes in sales prices and production costs (2,750) 8,453 (9,685)
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Extensions, discoveries and improved recovery 1,360 972 1,027
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Changes in estimated future development costs (346) (1,284) (174)
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Purchases of proved reserves in place 594 4,973 413
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Sales of proved reserves in place (8) (494) (34)
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Revisions of previous reserve estimates 144 360 56
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Accretion of discount 2,000 794 1,745
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Changes in production timing and other (1,411) 502 (726)
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Net change in income taxes 426 (4,723) 3,692
===========================================================================================================
Net change (3,573) 7,043 (5,918)
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Balance - beginning of year 13,004 5,961 11,879
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Balance - end of year $ 9,431 $ 13,004 $ 5,961
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85 ANNUAL REPORT 2003