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<SEC-DOCUMENT>0000950142-04-000726.txt : 20040309
<SEC-HEADER>0000950142-04-000726.hdr.sgml : 20040309
<ACCEPTANCE-DATETIME>20040309165013
ACCESSION NUMBER:		0000950142-04-000726
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20040225
FILED AS OF DATE:		20040309

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			CANADIAN NATURAL RESOURCES LTD
		CENTRAL INDEX KEY:			0001017413
		STANDARD INDUSTRIAL CLASSIFICATION:	CRUDE PETROLEUM & NATURAL GAS [1311]
		IRS NUMBER:				000000000

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	333-12138
		FILM NUMBER:		04657944

	BUSINESS ADDRESS:	
		STREET 1:		2000
		STREET 2:		425 1ST ST
		CITY:			S W CALGARY ALBERTA
		STATE:			A0
		ZIP:			00000

	MAIL ADDRESS:	
		STREET 1:		2500 855 2 ST NW
		CITY:			CALGARY ALBERTA CANADA
		STATE:			A0
		ZIP:			9999999999
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6k_022504b.txt
<DESCRIPTION>FORM 6-K REPORT OF FOREIGN PRIVATE ISSUER
<TEXT>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 6-K

                        REPORT OF FOREIGN PRIVATE ISSUER
                   PURSUANT TO SECTION 13a-16 OR 15d-16 OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                       For the month of February 25, 2004

                         Commission File Number: 1-8795


                       CANADIAN NATURAL RESOURCES LIMITED
             (Exact name of registrant as specified in its charter)


          2500, 855 - 2ND STREET S.W., CALGARY, ALBERTA, CANADA T2P 4J8
                    (Address of principal executive offices)


         Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F.

                  Form 20-F     [_]             Form 40-F       [X]

         Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(1). ____

         Note: Regulation S-T Rule 101(b)(1) only permits the submission in
paper of a Form 6-K if submitted solely to provide an attached annual report to
security holders.

         Indicate by check mark if the registrant is submitting the Form 6-K in
paper as permitted by Regulation S-T Rule 101(b)(7): ____

         Note: Regulation S-T Rule 101(b)(7) only permits the submission in
paper of a Form 6-K if submitted to furnish a report or other document that the
registrant foreign private issuer must furnish and make public under the laws of
the jurisdiction in which the registrant is incorporated, domiciled or legally
organized (the registrant's "home country"), or under the rules of the home
country exchange on which the registrant's securities are traded, as long as the
report or other document is not a press release, is not required to be and has
not been distributed to the registrant's security holders, and, if discussing a
material event, has already been the subject of a Form 6-K submission or other
Commission filing on EDGAR.

         Indicate by check mark whether the registrant by furnishing the
information contained in this Form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.

                  Yes           [_]             No              [X]

         If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b): 82-______

<PAGE>

EXHIBIT NUMBER             DESCRIPTION

99.1                       Press Release dated February 25, 2004 referenced as
                           "Canadian Natural Resources Limited Announces Record
                           2003 Results and Proposes Two For One Stock Split"


<PAGE>


                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                    CANADIAN NATURAL RESOURCES LIMITED
                                    (Registrant)



Date:    March 1, 2004              By: /s/ B. E. McGrath
                                        ---------------------------------------
                                        B. E. McGRATH
                                        Corporate Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>ex991-form6k_022504b.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>

                                                                    EXHIBIT 99.1
                                                                    ------------



- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]                                                 PRESS RELEASE
[LOGO - CANADIAN NATURAL]
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]              [GRAPHIC OMITTED]               [GRAPHIC OMITTED]
  [PHOTOGRAPH]                   [PHOTOGRAPH]                    [PHOTOGRAPH]
- --------------------------------------------------------------------------------


                  CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES
            RECORD 2003 RESULTS AND PROPOSES TWO FOR ONE STOCK SPLIT
          CALGARY, ALBERTA - FEBRUARY 25, 2004 - FOR IMMEDIATE RELEASE

In commenting on fourth quarter and year-end 2003 results, Canadian Natural's
Chairman, Allan Markin, stated "This was another record year, reflecting the
execution of our defined growth strategy to create shareholder value. Record
annual cash flow and earnings and solid fourth quarter results were a direct
result of drilling success and operational efficiency. We have made significant
progress on our larger, future-growth projects while maintaining our focus on
existing assets, both in North America and internationally."

"As we look into 2004, we see continued opportunities to significantly add
value. Our 2004 natural gas exploration and development program looks strong as
we continue to capitalize on program advancements made in 2003. Cost reduction
strategies in Northwest Alberta and targeted new exploration horizons there and
in Northeast British Columbia have met planned expectations early in this year's
drilling season."

"Our heavy oil marketing strategy is gaining momentum, with the current 34,000
barrel per day test of Synbit drawing the attention of other refiners within
PADD II. Our acquisition of additional heavy oil properties in Alberta announced
February 18, 2004 helps solidify our position as a market leader, meaning that
we will be a significant beneficiary as U.S. markets for heavy oil expand."

"Project Horizon continues on schedule. We recently received Joint Panel and
Alberta Provincial Cabinet approvals for the project and expect remaining
regulatory approvals in the first half of 2004. We also expect to determine
final cost expectations through continued project definition and our defined
execution strategy. This, combined with the definition of our financing plans,
means we will seek sanction from the Board of Directors during the second half
of this year. The balance sheet exits 2003 in a very strong position with debt
to book capitalization at only 32%. During 2004, we look to further strengthen
our ability to fund Project Horizon. Based upon current strip pricing, we
estimate 2004 cash flow of between $3.0 billion and $3.2 billion, with a capital
expenditure budget of $2.75 billion to $2.95 billion."

HIGHLIGHTS

o        Record annual net earnings of $1.4 billion ($10.48 per common share)
         compared with $0.6 billion ($4.46 per common share) in 2002. Adjusted
         annual net earnings from operations of $1.0 billion ($7.43 per common
         share) compared with $0.6 billion ($4.51 per common share) in 2002.

o        Record annual cash flow of $3.2 billion ($23.54 per common share)
         compared with $2.3 billion ($17.63 per common share) in 2002.

o        Continued strengthening of the Company's financial position, with debt
         to book capitalization at the end of 2003 falling to 32% versus 46% at
         the end of 2002 and a debt to EBITDA ratio of 0.8 times in 2003
         compared to 1.6 times in 2002.

o        Fourth quarter net earnings of $251 million ($1.87 per common share)
         compared with $209 million ($1.56 per common share) for the fourth
         quarter of 2002 and $203 million ($1.51 per common share) in the third
         quarter of 2003. Adjusted net earnings from operations amounted to $202
         million ($1.51 per common share) compared with $208 million ($1.56 per
         common share) in the fourth quarter of 2002 and $215 million ($1.60 per
         common share) in the third quarter of 2003.

o        Continued strong fourth quarter cash flow of $734 million ($5.48 per
         common share) compared with $777 million ($5.81 per common share) in
         the fourth quarter of 2002 and $758 million ($5.62 per common share) in
         the third quarter of 2003.

<PAGE>

o        Record fourth quarter crude oil and NGLs sales of over 244 mbbl/d, at
         the mid point of the Company's guidance.

o        Continued strong fourth quarter natural gas sales of 1.27 bcf/d, equal
         to 46% of production, also at the mid point of the Company's guidance.

o        Reduction of 5% in production expense per boe in the fourth quarter
         from the third quarter with natural gas production expense remaining
         constant and crude oil and NGLs production expense reducing by $0.69
         per barrel or 7%.

o        Utilizing a qualified independent evaluation on 100% of the Company's
         reserves with a constant pricing model:

         o        Proved reserves, net of royalties, replaced production by 129%
                  at a finding and onstream cost of $12.34 per boe with
                  additional costs to develop of $1.51 per boe.

         o        Proved and probable reserves, net of royalties, replaced
                  production by 308% at a finding and onstream cost of $5.18 per
                  boe with additional costs to develop of $1.60.

         o        At the end of 2003, proved and probable crude oil and NGLs
                  reserves before royalties amounted to 1.5 billion barrels, a
                  25% increase from the prior year, with natural gas reserves
                  amounting to 3.8 tcf, a 5% increase over 2002.

         o        Proved and probable reserves per common share have increased
                  by 34% to 15.8 boe/share on a before royalties basis.

o        Horizon Oil Sands Project received regulatory approvals from the Joint
         Panel in early January 2004. Third and final phase of pre-construction
         engineering, Engineering Design Specification ("EDS"), continues with
         completion expected in the second half of 2004. No reserves have been
         booked with respect to this project.

o        The Baobab development, located offshore Cote d'Ivoire, continues on
         time and on budget. Development drilling and fabrication of the
         Floating Production Storage and Offtake ("FPSO") vessel commenced
         during the fourth quarter.

o        Under its Normal Course Issuer Bid, the Company purchased 330,000 of
         its common shares during the fourth quarter for a total cost of $21
         million. During 2003, the Company purchased approximately 2.7 million
         of its common shares for a total cost of $144 million (average cost -
         $52.51/share), resulting in the Company ending the year with less
         outstanding common shares than it started the year. The Normal Course
         Issuer Bid has been extended to January 2005, allowing for the
         repurchase of up to 6.7 million shares through facilities of the
         Toronto Stock Exchange and the New York Stock Exchange.

o        Fourth straight year of dividend increases. The 2004 quarterly
         dividends will increase 33% from $0.15 per common share to $0.20 per
         common share commencing with the April 1, 2004 dividend payment.

o        To increase the liquidity of its common shares, the Board of Directors
         will recommend to the shareholders that the Company's common shares be
         subdivided on the basis of 2:1. The proposal will be voted on at the
         Annual and Special Meeting of the Shareholders to be held on May 6,
         2004.

CORPORATE ANNOUNCEMENT

o        The Board of Directors is pleased to announce the appointment of Ms.
         Catherine (Kay) M. Best, FCA to the Board of Directors in November 2003
         and her subsequent appointment to the Audit Committee. Ms. Best is
         currently Senior Vice President, Risk Management and CFO for the
         Calgary Health Region. Before joining the Calgary Health Region in
         2000, Ms. Best was employed with a major international accounting firm
         for 19 years, 10 of which was as Corporate Audit Partner. Her practice
         and developed expertise focused on oil and gas and related cross border
         industries. Through her training and expertise Ms. Best qualifies as an
         "audit committee financial expert" on the Audit Committee of the Board
         of Directors of the Corporation.


2                                             CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

ADJUSTED NET EARNINGS FROM OPERATIONS

The following reconciliation lists the after-tax effects of certain items of a
non-operational nature that are included in the Company's financial results for
each of the periods reported. Adjusted net earnings from operations is a
non-GAAP term that the Company utilizes to evaluate its performance and that of
its business segments.

($ millions, except per common share amounts)

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED            YEAR ENDED
                                                                  ------------------            ----------
                                                             DEC 31     Sep 30     Dec 31     DEC 31     Dec 31
                                                               2003       2003       2002       2003       2002
- ------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>        <C>        <C>        <C>        <C>
Net earnings attributable to common                         $   251    $   203    $   209    $ 1,407    $   570
shareholders as reported

Unrealized foreign exchange gain (1)                            (64)        (9)        --       (256)       (35)

Unrealized foreign exchange gain on
     preferred securities(1)                                     (4)        --         (1)       (18)        (1)

Effect of statutory tax rate changes on
     future income tax liabilities (2)                          (31)        --         --       (278)        13

Stock-based compensation expense (3)                             43         21         --        136         --

Reduction in carrying value of foreign
     assets (4)                                                   7         --         --          7         30
- ------------------------------------------------------------------------------------------------------------------
Adjusted net earnings from operations
attributable to common shareholders                         $   202    $   215    $   208    $   998    $   577
- ------------------------------------------------------------------------------------------------------------------
         Per share   - basic                                $  1.51    $  1.60    $  1.56    $  7.43    $  4.51
                     - diluted                              $  1.50    $  1.58    $  1.51    $  7.30    $  4.37
- ------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)  UNREALIZED FOREIGN EXCHANGE GAINS AND LOSSES RESULT PRIMARILY FROM THE
     TRANSLATION OF LONG-TERM DEBT AND PREFERRED SECURITIES TO PERIOD END
     EXCHANGE RATES AND ARE IMMEDIATELY RECOGNIZED IN NET EARNINGS ATTRIBUTABLE
     TO COMMON SHAREHOLDERS. IN 2002, THE COMPANY UTILIZED PREVIOUSLY
     UNRECOGNIZED INCOME TAX BENEFITS ON CAPITAL LOSSES TO OFFSET INCOME TAXES
     RELATED TO THESE GAINS.

(2)  ALL SUBSTANTIVELY ENACTED ADJUSTMENTS IN APPLICABLE INCOME TAX RATES ARE
     APPLIED TO UNDERLYING ASSETS AND LIABILITIES ON THE COMPANY'S BALANCE SHEET
     IN DETERMINING FUTURE INCOME TAX ASSETS AND LIABILITIES. THE IMPACT OF
     THESE TAX RATE CHANGES IS RECORDED IN NET EARNINGS DURING THE PERIOD THE
     LEGISLATION IS SUBSTANTIVELY ENACTED. DURING THE SECOND QUARTER OF 2003,
     THE CANADIAN GOVERNMENT INTRODUCED SEVERAL INCOME TAX CHANGES, INCLUDING
     RATE REDUCTIONS, FOR THE RESOURCE INDUSTRY. ALSO DURING THE SECOND QUARTER,
     A CANADIAN PROVINCE REDUCED CORPORATE INCOME TAX RATES. DURING THE YEAR
     ENDED DECEMBER 31, 2002, THE UNITED KINGDOM INCREASED INCOME TAXES
     APPLICABLE TO THE CRUDE OIL AND NATURAL GAS INDUSTRY AND A CANADIAN
     PROVINCE REDUCED CORPORATE INCOME TAX RATES. FOURTH QUARTER 2003 RECOVERY
     REPRESENTS CHANGES IN TIMING OF TAX LIABILITY REVERSALS.

(3)  DURING THE SECOND QUARTER OF 2003, THE COMPANY MODIFIED ITS EMPLOYEE STOCK
     OPTION PLAN TO PROVIDE FOR A CASH PAYMENT OPTION. A CHARGE OF $72 MILLION
     AFTER TAXES ($105 MILLION BEFORE TAXES) WAS RECOGNIZED TO REPRESENT THE
     MARK-TO-MARKET LIABILITY OF THE PLAN FOR ALL EARNED OPTIONS AS AT JUNE 30,
     2003. AN ADDITIONAL EXPENSE OF $43 MILLION AFTER TAXES ($63 MILLION BEFORE
     TAXES) WAS RECOGNIZED IN THE FOURTH QUARTER OF 2003 AND $21 MILLION AFTER
     TAXES ($32 MILLION BEFORE TAXES) IN THE THIRD QUARTER OF 2003.

(4)  FOLLOWING AN UNSUCCESSFUL EXPLORATORY WELL DRILLED OFFSHORE FRANCE IN 2003
     AND THE DECISION TO ALLOW THE LEASE TO EXPIRE WITH NO FURTHER EXPLORATION,
     ALL CAPITALIZED COSTS RELATED TO THE FRANCE WELL AND LEASE WERE CHARGED TO
     NET EARNINGS ATTRIBUTABLE TO COMMON SHAREHOLDERS. FOLLOWING AN UNSUCCESSFUL
     EXPLORATORY WELL DRILLED IN 2002 ON BLOCK 19 IN ANGOLA AND THE DECISION TO
     WITHDRAW FROM AN EXPLORATION BLOCK IN NIGERIA, ALL CAPITALIZED COSTS
     RELATED TO THESE PROJECTS WERE CHARGED TO NET EARNINGS ATTRIBUTABLE TO
     COMMON SHAREHOLDERS.

OPERATIONS REVIEW

IN THIS DOCUMENT, REFERENCE IS MADE TO OIL AND GAS IN COMMON UNITS CALLED BARREL
OF OIL EQUIVALENT ("BOE"). A BOE IS DERIVED BY CONVERTING SIX THOUSAND CUBIC
FEET OF NATURAL GAS TO ONE BARREL OF CRUDE OIL (6MCF:1BBL). THIS CONVERSION MAY
BE MISLEADING, PARTICULARLY IF USED IN ISOLATION, SINCE THE 6MCF:1BBL RATIO IS
BASED ON AN ENERGY EQUIVALENCY AT THE BURNER TIP AND DOES NOT REPRESENT THE
VALUE EQUIVALENCY AT THE WELL HEAD.


CANADIAN NATURAL RESOURCES LIMITED                                             3
================================================================================

<PAGE>

PRODUCTION, BEFORE ROYALTIES

Quarterly and annual production of both natural gas and crude oil and NGLs were
within guidance parameters previously announced. Crude oil and NGLs production
for the year ended December 31, 2003 increased approximately 27.1 mbbl/d or 13%
and natural gas production increased by 67 mmcf/d or 5% from the previous year.

During the fourth quarter, crude oil and NGLs production declined 2.8 mbbl/d
from third quarter levels, reflecting production declines at Pelican Lake, as
well as drilling delays and maintenance downtime reducing North Sea production
as partially offset by increases in conventional heavy oil and Offshore West
Africa production.

As expected, natural gas production levels decreased from the third quarter to
1,270 mmcf/d. This reflects the normal production declines on the portion of
Canadian Natural's asset base that is suitable for winter-only access.
Approximately 11 mmcf/d of Canadian Natural's natural gas production was shut in
September 1, 2003 due to bitumen conservation measures undertaken by the Alberta
Energy and Utilities Board (EUB). In January, the Company applied for further
exemptions which have reduced the shut-in volume to 6 mmcf/d. On January 2, 2004
the EUB staff submission group released recommendations to shut in additional
gas volumes in the Athabasca region. The EUB will be convening an interim
hearing on March 8, 2004 to assess whether additional gas production is
associated with potentially recoverable bitumen. Canadian Natural has an
additional 11 mmcf/d of production that could be at risk of being shut in as a
result of this hearing. The Alberta Department of Energy ("ADOE") has announced
an interim assistance plan under which Alberta crown royalty deferrals are
granted at a rate of $0.60/mcf of shut-in production.

The Company's production composition is as follows:

<TABLE>
<CAPTION>
                                                     Q4 2003       Q3 2003       Q4 2002
                                                  MBOE/D   %    mboe/d   %    mboe/d   %
- -----------------------------------------------------------------------------------------
<S>                                                <C>   <C>     <C>   <C>     <C>   <C>
Natural gas                                        211.7  46     214.9  46     227.5  49
Light crude oil and NGLs                           115.4  25     118.9  26     104.7  22
Pelican Lake crude oil                              21.5   5      23.5   5      28.6   6
Primary heavy crude oil                             71.0  16      68.3  15      68.5  15
Thermal heavy crude oil                             36.4   8      36.3   8      38.8   8
- -----------------------------------------------------------------------------------------
Total                                              456.0 100     461.9 100     468.1 100
=========================================================================================
</TABLE>

The Company expects production levels in the first quarter of 2004 to average
1,285 to 1,315 mmcf/d of natural gas and 245 to 265 mbbl/d of crude oil and
NGLs. This results in expected annual 2004 production levels of approximately
1,320 to 1,395 mmcf/d of natural gas (2003 - 1,299 mmcf/d) and approximately 263
to 283 mbbl/d of crude oil and NGLs (2003 - 242 mbbl/d).

These production expectations incorporate the February 2004 acquisition of
Petrovera and are based upon revised capital spending expectations of $2.75 to
$2.95 billion, made concurrent with the acquisition. For further guidance
details, please refer to Canadian Natural's website at
www.cnrl.com/investor/guidance.htm.

DRILLING ACTIVITY (number of wells)

<TABLE>
<CAPTION>
                                                                            YEAR ENDED DECEMBER 31
                                                                      --------------------------------
                                                                            2003             2002
                                                                      GROSS      NET    Gross     Net
- ------------------------------------------------------------------------------------------------------
<S>                                                                   <C>      <C>        <C>     <C>
Oil                                                                     490      458      316     264
Natural gas                                                             841      777      183     162
Dry                                                                     126      118       32      27
- ------------------------------------------------------------------------------------------------------
Subtotal                                                              1,457    1,353      531     453
Stratigraphic test/service wells                                        447      440      456     447
- ------------------------------------------------------------------------------------------------------
Total                                                                 1,904    1,793      987     900
- ------------------------------------------------------------------------------------------------------
Success rate (excluding strat test/service wells)                                 91%              94%
======================================================================================================
</TABLE>


4                                             CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

During the fourth quarter, Canadian Natural drilled 94 net crude oil wells
concentrated in the Company's heavy crude oil areas of North Alberta and 240 net
natural gas wells. The natural gas wells included 125 shallow wells in South
Alberta, which have productive rates from 50 mcf/d to 200 mcf/d, as well as 41
net wells in Northwest Alberta and 46 net wells in North Alberta. Many of these
wells were drilled late in the fourth quarter and therefore did not add
significantly to fourth quarter production levels and did not achieve enough
production history to warrant significant reserve additions. The total success
rate for Canadian Natural's drilling program was 91% for 2003, excluding
stratigraphic test/service wells.

During the year, the Company drilled a total of 1,793 wells, almost twice 2002
levels. In particular, natural gas drilling increased to almost five times the
level of activity experienced in the prior year, while crude oil drilling
increased 73%. The increase in natural gas drilling is reflective of the
Company's proactive decision to defer drilling prospects in 2002 in anticipation
of Ladyfern production declines.

During 2003, the Company drilled 440 net stratigraphic test/service wells on the
oil sands leases in the Horizon Oil Sands Project and in North Alberta.

PRICING

Product pricing remained strong during the fourth quarter for both crude oil and
natural gas as measured in U.S. dollars. West Texas Intermediate ("WTI")
benchmark pricing was up versus both the previous quarter and last year, while
NYMEX natural gas pricing was 10% below third quarter but 15% higher than the
corresponding quarter of last year. However due to the strength of the Canadian
dollar in relation to the U.S. dollar, crude oil and natural gas benchmark
prices as measured in Canadian dollars were lower than both the previous quarter
and last year.

As expected, heavy oil differentials widened during the fourth quarter due to
normal seasonality. Detailed reviews of benchmark pricing as well as Canadian
Natural's sensitivity to currency exchange rates are available in Management's
Discussion and Analysis. Canadian Natural continues to deliver on its heavy oil
marketing strategy and in particular its bitumen diluted with synthetic light
crude oil or "Synbit" product. The Company is currently marketing 34,000 bbl/d
of Synbit to refiners located in the U.S. Midwest. The Company plans to expand
this effort throughout 2004 to build a solid new market for heavy and synthetic
crudes. This demand expansion will enable Canadian Natural to expand heavy oil
production without impairing sales prices.

The Company utilizes hedges on a portion of its production in an effort to
ensure operating cash flows are sufficient to cover capital expenditures.
Generally, costless collars are utilized against benchmark commodity prices as
well as currency exposures. The details of these hedge positions are reported in
note 9 of the consolidated financial statements.

First quarter 2004 indicative prices as at February 24, 2004 include a one year
forward reference WTI price of US$31.46/bbl, a NYMEX natural gas price of
US$5.28/mmbtu and a Lloyd Blend heavy oil differential of US$8.80/bbl. The Bank
of Canada noon day exchange rate for this date was US$0.7530 equals C$1.00.


CANADIAN NATURAL RESOURCES LIMITED                                             5
================================================================================
<PAGE>

ACTIVITY BY CORE REGION

<TABLE>
<CAPTION>
                                                    ---------------------------------------------
                                                     NET UNDEVELOPED LAND AS    DRILLING ACTIVITY
                                                                          AT           YEAR ENDED
                                                           DECEMBER 31, 2003    DECEMBER 31, 2003
                                                    (thousands of net acres)          (net wells)
- -------------------------------------------------------------------------------------------------
<S>                                                                   <C>                   <C>
Northeast British Columbia                                             1,566                  106
Northwest Alberta                                                      1,681                  121
North Alberta                                                          5,627                  717
South Alberta                                                            673                  430
Southeast Saskatchewan                                                   147                   27
Horizon Oil Sands Project                                                117                  370
North Sea                                                              1,920                   18
Offshore West Africa                                                     943                    4
- -------------------------------------------------------------------------------------------------
Total                                                                 12,674                1,793
=================================================================================================
</TABLE>

NORTH AMERICAN NATURAL GAS

Canadian Natural drilled a total of 777 natural gas wells as detailed below. For
2004, the revised natural gas program will be highlighted by expanded drilling
programs in the Northwest Alberta and Northeast British Columbia core regions.

<TABLE>
<CAPTION>
                                                                 --------------------------------
(number of wells)                                                2003 ACTUAL        2004 FORECAST
- -------------------------------------------------------------------------------------------------
<S>                                                                      <C>                  <C>
Northeast British Columbia                                                78                  172
Northwest Alberta                                                         98                  145
North Alberta                                                            184                  183
South Alberta                                                            417                  206
- -------------------------------------------------------------------------------------------------
Total                                                                    777                  706
=================================================================================================
</TABLE>

For 2004, Northeast British Columbia drilling reflects an increased Helmet
drilling program, as well as a new shallow natural gas drilling program in the
Fort St. John area, which benefits from the revised royalty regime for shallow
natural gas wells in British Columbia.

NORTH AMERICA CRUDE OIL AND NGLS

Canadian Natural continues the disciplined development of its vast heavy crude
oil prone land base. As has been previously articulated, these properties will
be developed as heavy crude oil markets permit. Given the normal production
profile of new heavy crude oil wells, fourth quarter production increases
reflect the drilling program commenced during the second quarter. Canadian
Natural's fourth quarter drilling program was concentrated on 71 primary heavy
oil wells in North Alberta, for a total of 315 wells during the year.


6                                             CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

As an integral part of the long-term heavy crude oil strategy mentioned above,
the Company's Primrose drilling program continues with 41 new thermal wells
having been drilled during 2003. With steaming having commenced in early 2004,
first production from these new wells is expected in mid 2004. A further 17
wells will be drilled during the first quarter of 2004. Conventional production
from the Pelican Lake field reflected no drilling activity during the second
half of 2003. Canadian Natural views its 2003 Enhanced Oil Recovery waterflood
test program as a success and as such, Canadian Natural will begin the phased
roll out of the waterflood with approximately 20% of the field being under
waterflood by the end of 2004. The waterflood will stabilize production, but
will require a further 63 Pelican Lake productive wells to be converted from
producer to water injectors and 43 new wells to be drilled as producers.

In February 2004, Canadian Natural announced the acquisition of heavy oil
properties in its North Alberta core region for $467 million. The current
production from the properties acquired by Canadian Natural is approximately
27,500 bbl/d of heavy oil and 9 mmcf/d of natural gas. The acquisition fits with
Canadian Natural's strategy of dominating its core areas and related
infrastructure with all of the properties acquired by the Company being located
in its heavy oil core area. Canadian Natural expects to achieve operating cost
reductions through synergies with its own existing facilities including
additional throughput in its 100% owned ECHO pipeline. In addition,
approximately 300 new well locations and over 400 well recompletion
opportunities have been identified on these lands and will be added into project
inventory.

The 2004 capital budget for North American crude oil and NGLs has been reduced
by $65 million to $550 million, reflecting project deferrals implemented as part
of the Petrovera acquisition. These project deferrals were comprised primarily
of reduced heavy oil drilling. The revised 2004 drilling program consists of 110
conventional heavy oil wells, 51 thermal heavy oil wells, 43 light crude oil
wells and 43 Pelican Lake oil wells.

NORTH AMERICA HORIZON OIL SANDS PROJECT

The 100% owned and operated Horizon Oil Sands Project is expected to be built in
three phases and produce approximately 232 mbbl/d of light, sweet synthetic
crude oil before royalties. The Company received the Joint Panel decision in
January and Alberta Provincial Cabinet and EUB approvals in February. The third
phase of engineering, EDS, will be substantially completed in 2004. In addition,
the financing plan will be optimized and finalized coincident with the Board of
Directors' sanction.

EDS, representing the detailed design of the project, progressed during the
fourth quarter of 2003. Also during the fourth quarter, the Company completed
construction of the major access road and related river spans that access the
site. Clearing of trees is underway in order to facilitate drainage of the site
and construction of deep underground facilities later this year.

The financing of the first phase of development will be guided by the principles
of retaining as much direct ownership interest as possible while maintaining
current strong debt ratings and not issuing additional equity in common shares.
Canadian Natural is also investigating the use of long-term commodity hedges in
order to reduce cash flow risks during the construction phase. The Company could
also look to offload capital commitments through the acceptance of complementary
business partners, or potentially, project joint venture partners. Recent
commodity price increases have significantly strengthened the balance sheet of
the Company, placing it in a better position to achieve all three of its guiding
principles.

The 2004 capital budget for the Horizon Oil Sands Project will be phased in over
2004 dependent on regulatory approval and cost estimates. In 2004, the EDS will
be completed with a capital budget of $150 million, and $50 million of
pre-construction activities will be undertaken. If Federal Cabinet approval is
received on a timely basis and Board of Directors approval is received based on
acceptable certainty of forecasted capital costs, up to an additional $200
million of construction activities could be undertaken in 2004.

The Company currently employs 267 full time employees and 372 full time
contractors on this project and expects this to continue to increase as the EDS
continues. The members of this team are very experienced in all facets of oil
sands construction and operations.


CANADIAN NATURAL RESOURCES LIMITED                                             7
================================================================================
<PAGE>

NORTH SEA

Canadian Natural remains excited about prospects to create value from the crude
oil platforms at Ninian and Murchison. During the fourth quarter, production at
the Lyell Field, which produces through the Ninian Platform, was reduced in
order to effect well workovers as well as to complete pipeline integrity checks
prior to infill drilling programs scheduled for 2004. A natural gas compressor
at the Murchison Field that is used to create gas lift to optimize liquids
production was down, temporarily reducing production from that field.

During the fourth quarter, two producer wells and one injector well were drilled
in the UK sector of the North Sea. Following Canadian Natural`s drilling of an
unsuccessful exploration well into the Permis Finistere Atlantique Block located
offshore France, the Company has written off all related capital costs during
the quarter as it has no current plans to continue exploration on the Block.

In 2004, Canadian Natural now anticipates drilling approximately 13 crude oil
wells, implementing a secondary recovery natural gas injection scheme at Banff,
optimizing Ninian and Murchison waterfloods, and continuing its successful 2003
recompletion program. The 2004 capital budget for the North Sea has been reduced
by $40 million to $300 million reflecting project deferrals implemented as part
of the Petrovera acquisition. As a result, average crude oil production is
expected to remain relatively flat with current production levels; however,
natural gas volumes will be lower as natural gas sales at Banff are diverted to
reinjection.

OFFSHORE WEST AFRICA

During the fourth quarter, Canadian Natural's 58.67% owned and operated Espoir
development located offshore Cote d'Ivoire produced an average of 13.3 mbbl/d of
light crude oil and 12 mmcf/d of natural gas. The waterflood program is now
fully implemented and production has stabilized at the field.

At the 57.61% owned and operated Baobab Field, also located offshore Cote
d'Ivoire, field development has commenced. Hydrocarbons will be delivered from
subsea well clusters to a Floating Production, Storage and Offtake ("FPSO")
vessel with a storage capacity of 2 million barrels. Crude oil production, which
is expected to commence mid 2005 at gross well rates of approximately 45,000
bbl/d and subsequently peak at 60,000 bbl/d, will be sold directly from the
FPSO, with the associated natural gas being transported to shore via the Espoir
Field infrastructure. Development drilling commenced in early November and the
FPSO is currently being fabricated in Singapore.

In Offshore Angola, drilling of the Zenza project was completed with no
commercial quantities of hydrocarbons being encountered. Block 16, where the
Company operates with a 50% working interest, represents a high risk/high impact
exploration development for the Company in one of the most prolific crude oil
regions of the world. Canadian Natural will integrate new information gathered
during the Zenza drill in order to select the best exploration drilling target,
expected to be drilled in early 2005.

In 2004, the revised capital budget for Offshore West Africa was reduced by $60
million to $290 million. Canadian Natural anticipates $220 million to be spent
on the ongoing development of the Baobab Field in Cote d'Ivoire. The remainder
will be spent on the pre-development work for the West Espoir development.

FINANCIAL REVIEW

Canadian Natural is focused on maintaining a strong financial position in order
to withstand volatile crude oil and natural gas commodity prices and the
operational risks inherent in the crude oil and natural gas business
environment.

During 2003, strong operational results and product pricing enabled the Company
to repay approximately $0.7 billion of long-term debt. The strength of the
Canadian dollar during the year also reduced carrying values of US dollar based
borrowings by an additional $0.5 billion, resulting in a total decrease of
long-term debt of $1.2 billion. Corporate debt to cash flow was reduced to 0.9
times versus 1.8 times at December 31, 2002, while debt to book capitalization
improved to 32% from 46% at year end 2002. Corporate debt to EBITDA was reduced
to 0.8 times versus 1.6 times at December 31, 2002.


8                                             CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

During 2004, higher than budgeted prices received for the Company's products are
expected to result in increased cash flow to the Company over the revised
capital budget established in early 2004, after the acquisition of Petrovera.
The Company will continue to allocate a minimum of 50% of its cash flow surplus
toward debt repayment. The remaining excess will be directed to the Company's
authorized share buy-back program and additional capital expenditures on
conventional crude oil and natural gas opportunities. It is expected that the
largest portion of any additional capital expenditures will take place in the
fourth quarter of 2004 and accordingly will not add materially to Canadian
Natural's 2004 average production volumes.

During 2003, 2.7 million common shares were purchased for cancellation under the
Normal Course Issuer Bid for a total cost of $144 million, resulting in the
Company ending the year with less outstanding common shares than it started the
year.

Canadian Natural's Board of Directors has approved an increase in the annual
dividend paid by the Company to $0.80 per common share from the previous level
of $0.60 per common share. The 33% increase recognizes the stability of Canadian
Natural's increased cash flow and provides a further return to shareholders.
This is the fourth consecutive year in which the Company has paid dividends and
the third consecutive year of increase in the distribution paid to its
shareholders. The increased dividend will become effective with the quarterly
payment of $0.20 per common share to be paid on April 1, 2004.

In order to increase the liquidity of its common shares, the Board of Directors
will recommend to its shareholders to subdivide the Company's common shares on a
2 for 1 basis, which will result in an increase in the Company's total
outstanding common shares to approximately 268 million common shares. This
recommendation will be voted on by the shareholders at the Annual and Special
Meeting of Shareholders meeting to be held on May 6, 2004.

YEAR-END RESERVES

Canadian Natural retains qualified independent petroleum engineering
consultants, Sproule Associates Limited ("Sproule"), to evaluate 100% of the
Company's proved and probable oil and natural gas reserves and prepare
Evaluation Reports on the Company's total reserves. Canadian Natural has been
granted an exemption from the recently adopted National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities (NI 51-101) which prescribes
the standards for the preparation and disclosure of reserves and related
information for companies listed in Canada. This exemption allows the Company to
substitute United States Securities and Exchange Commission (SEC) requirements
for certain disclosures required under NI 51-101. The primary difference between
the two standards is the additional requirement under NI 51-101 to disclose
proved and probable reserves and future net revenues using forecast prices and
costs. Canadian Natural has elected to disclose proved reserves using constant
prices and costs as mandated by the SEC and has also provided proved and
probable reserves under the same parameters as voluntary additional information.
Another difference between the two standards is in the definition of proved
reserves. As discussed in the Canadian Oil and Gas Evaluation Handbook (COGEH),
the standards which NI 51-101 employs, the difference in estimated proved
reserves based on constant pricing and costs between the two standards is not be
material.

The Board of Directors of the Company has a Reserves Committee, which has met
with Sproule and carried out independent due diligence procedures with Sproule
as to the Company's reserves.


CANADIAN NATURAL RESOURCES LIMITED                                             9
================================================================================

<PAGE>

RESERVES, NET OF ROYALTIES(1)

<TABLE>
<CAPTION>
                                                                            DECEMBER 31, 2003
                                                           PROVED           PROVED         PROVED      PROVED AND
                                                        DEVELOPED(2)     UNDEVELOPED(2)    TOTAL(2)    PROBABLE(3)
- ------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>              <C>            <C>             <C>
CRUDE OIL & NGLS (mmbbl)
  North America                                               348              240            588             857
  North Sea                                                   138               84            222             317
  Offshore West Africa                                         23               62             85             133
- ------------------------------------------------------------------------------------------------------------------
                                                              509              386            895           1,307
- ------------------------------------------------------------------------------------------------------------------
NATURAL GAS (bcf)
  North America                                             2,140              286          2,426           2,919
  North Sea                                                    46               16             62             102
  Offshore West Africa                                         12               52             64              72
- ------------------------------------------------------------------------------------------------------------------
                                                            2,198              354          2,552           3,093
- ------------------------------------------------------------------------------------------------------------------
TOTAL RESERVES (mmboe)                                        875              445          1,320           1,823
==================================================================================================================

RESERVE REPLACEMENT RATIO(4) (%)                                                             129%            308%
==================================================================================================================

COST TO DEVELOP(5) ($/boe)
  10% discount                                               0.24             4.02           1.51            1.60
==================================================================================================================

PRESENT VALUE OF RESERVES(6) ($ million)
  10% discount                                             13,079            3,037         16,116          20,164
==================================================================================================================

                                                                             DECEMBER 31, 2002
                                                             PROVED          PROVED         PROVED      PROVED AND
                                                          DEVELOPED(7)    UNDEVELOPED(7)    TOTAL(7)    PROBABLE(7)
- ------------------------------------------------------------------------------------------------------------------
CRUDE OIL & NGLS (mmbbl)
  North America                                               340              231            571             636
  North Sea                                                   107               95            202             277
  Offshore West Africa                                         27               48             75             121
- ------------------------------------------------------------------------------------------------------------------
                                                              474              374            848           1,034
- ------------------------------------------------------------------------------------------------------------------
NATURAL GAS (bcf)
  North America                                             2,185              261          2,446           2,765
  North Sea                                                    57               14             71              89
  Offshore West Africa                                         27               44             71              90
- ------------------------------------------------------------------------------------------------------------------
                                                            2,269              319          2,588           2,944
- ------------------------------------------------------------------------------------------------------------------

TOTAL RESERVES (mmboe)                                        852              427          1,279           1,525
==================================================================================================================

RESERVE REPLACEMENT RATIO(4) (%)                                                             245%            275%
==================================================================================================================

COST TO DEVELOP(5) ($/boe)
  10% discount                                               0.42             3.85           1.57            1.53
==================================================================================================================

PRESENT VALUE OF RESERVES(6) ($ million)
  10% discount                                             15,485            3,850         19,335          20,965
==================================================================================================================
</TABLE>


10                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

CRUDE OIL AND NGLS RESERVES RECONCILIATION(1) (mmbbl, net of royalties)

<TABLE>
<CAPTION>
                                                              NORTH        NORTH     OFFSHORE
                                                            AMERICA          SEA  WEST AFRICA        TOTAL
PROVED RESERVES
- -----------------------------------------------------------------------------------------------------------
<S>                                                             <C>           <C>          <C>         <C>
RESERVES, DECEMBER 31, 2001                                     583           78           60          721
- -----------------------------------------------------------------------------------------------------------

Extensions & discoveries                                         26            1           14           41

Property purchases                                               44          114           --          158

Property disposals                                               (1)         (18)           --         (19)

Production                                                      (55)         (13)          (2)         (70)

Revisions of prior estimates                                    (26)          40            3           17
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2002                                     571          202           75          848
- -----------------------------------------------------------------------------------------------------------

Extensions & discoveries                                          1           --           13           14

Infill drilling                                                  54           --           --           54

Improved recovery                                                 9           --           --            9

Property purchases                                                7           27           --           34

Property disposals                                               --           --           --           --

Production                                                      (56)         (21)          (4)         (81)

Revisions of prior estimates                                      2           14            1           17
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2003                                     588          222           85          895
- -----------------------------------------------------------------------------------------------------------


PROVED AND PROBABLE RESERVES
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2001                                     670          100          103          873
===========================================================================================================

Extensions & discoveries                                         26           --            5           31

Property purchases                                               52          138           --          190

Property disposals                                               (1)         (22)          --         (23)

Production                                                      (55)         (13)          (2)         (70)

Revisions of prior estimates                                    (56)          74           15           33
- -----------------------------------------------------------------------------------------------------------
RESERVES, DECEMBER 31, 2002                                     636          277          121        1,034
- -----------------------------------------------------------------------------------------------------------
Extensions & discoveries                                          1           --           17           18
Infill drilling                                                  58           --           --           58
Improved recovery                                                25           --           12           37
Property purchases                                               10           33           --           43
Property disposals                                               --           --           --           --
Production                                                      (56)         (21)          (4)         (81)
Revisions of prior estimates                                    183           28          (13)         198
- -----------------------------------------------------------------------------------------------------------
RESERVES, DECEMBER 31, 2003                                     857          317          133        1,307
===========================================================================================================
</TABLE>


CANADIAN NATURAL RESOURCES LIMITED                                            11
================================================================================

<PAGE>

NATURAL GAS RESERVES RECONCILIATION(1) (bcf, net of royalties)

<TABLE>
<CAPTION>
                                                              NORTH        NORTH     OFFSHORE
                                                            AMERICA          SEA  WEST AFRICA        TOTAL
PROVED RESERVES
- -----------------------------------------------------------------------------------------------------------
<S>                                                           <C>             <C>          <C>       <C>
RESERVES, DECEMBER 31, 2001                                   2,064           94           67        2,225
- -----------------------------------------------------------------------------------------------------------

Extensions & discoveries                                        106           --            4          110

Property purchases                                              699           18           --          717

Property disposals                                               (3)         (56)          --          (59)

Production                                                     (346)         (10)          (1)        (357)

Revisions of prior estimates                                    (74)          25            1          (48)
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2002                                   2,446           71           71        2,588
- -----------------------------------------------------------------------------------------------------------

Extensions & discoveries                                         58           --            6           64

Infill drilling                                                 243           --           --          243

Improved recovery                                                 8           --           --            8

Property purchases                                               50           19           --           69

Property disposals                                               (3)          --           --           (3)

Production                                                     (355)         (17)          (3)        (375)

Revisions of prior estimates                                    (21)         (11)         (10)         (42)
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2003                                   2,426           62           64        2,552
===========================================================================================================

PROVED AND PROBABLE RESERVES
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2001                                   2,344          118           88        2,550
- -----------------------------------------------------------------------------------------------------------

Extensions & discoveries                                        112           --           (7)         105

Property purchases                                              764           24           --          788

Property disposals                                               (3)         (62)          --          (65)

Production                                                     (346)         (10)          (1)        (357)

Revisions of prior estimates                                   (106)          19           10          (77)
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2002                                   2,765           89           90        2,944
- -----------------------------------------------------------------------------------------------------------

Extensions & discoveries                                         72           --           11           83

Infill drilling                                                 285           --           --          285

Improved recovery                                                26           --          (6)           20

Property purchases                                               59           22           --           81

Property disposals                                               (3)          --           --           (3)

Production                                                     (355)         (17)          (3)        (375)

Revisions of prior estimates                                     70            8          (20)          58
- -----------------------------------------------------------------------------------------------------------

RESERVES, DECEMBER 31, 2003                                   2,919          102           72        3,093
===========================================================================================================
</TABLE>


12                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

The following information for reserves before royalties is provided for
comparative purposes:

RESERVES, BEFORE ROYALTIES(1)

<TABLE>
<CAPTION>
                                                                       DECEMBER 31, 2003
                                                           PROVED           PROVED         PROVED      PROVED AND
                                                        DEVELOPED(2)   UNDEVELOPED(2)       TOTAL(2)   PROBABLE(3)
- ------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>              <C>            <C>             <C>
Crude Oil & NGLs (mmbbl)                                      568              432          1,000           1,481

Natural Gas (bcf)                                           2,725              429          3,154           3,823
- ------------------------------------------------------------------------------------------------------------------

Total Reserves (mmboe)                                      1,022              504          1,526           2,118
==================================================================================================================

                                                                       DECEMBER 31, 2002
                                                           PROVED           PROVED         PROVED      PROVED AND
                                                        DEVELOPED(7)   UNDEVELOPED(7)      TOTAL(7)    PROBABLE(7)
- ------------------------------------------------------------------------------------------------------------------

Crude Oil & NGLs (mmbbl)                                      535              426            961           1,181

Natural Gas (bcf)                                           2,811              398          3,209           3,659
- ------------------------------------------------------------------------------------------------------------------

Total Reserves (mmboe)                                      1,004              492          1,496           1,791
==================================================================================================================

FINDING AND ONSTREAM COSTS
                                                                                                      THREE YEAR
                                                             2003             2002           2001          TOTAL
- ------------------------------------------------------------------------------------------------------------------

NET RESERVE REPLACEMENT EXPENDITURES
($ million)                                                 2,283            3,928          1,745           7,956

RESERVE ADDITIONS(8) (mmboe, net of royalties)

Proved                                                        185              317            172             674

Proved and Probable                                           441              356            206           1,003

FINDING AND ON STREAM COSTS PER BOE(9)
(net of royalties)

Proved                                                      12.34            12.39          10.15           11.80

Proved and Probable                                          5.18            11.03           8.47            7.93
- ------------------------------------------------------------------------------------------------------------------

(1)  RESERVE ESTIMATES AND PRESENT VALUE CALCULATIONS ARE BASED UPON CONSTANT
     REFERENCE PRICE ASSUMPTIONS AS DETAILED BELOW.

CRUDE OIL & NGLS                                          COMPANY            WTI @       HARDISTY             NORTH
                                                          AVERAGE          CUSHING         HEAVY               SEA
                                                            PRICE         OKLAHOMA     12(DEGREE) API         BRENT
                                                         ($C/BBL)        ($US/BBL)       ($C/BBL)         ($US/BBL)
- -------------------------------------------------------------------------------------------------------------------

DECEMBER 31, 2003                                           32.02            32.56          26.16             30.14
DECEMBER 31, 2002                                           39.23            31.23          35.04             30.21
===================================================================================================================

                                                          COMPANY                                  BRITISH COLUMBIA
                                                          AVERAGE        HENRY HUB        ALBERTA        HUNTINGDON
                                                            PRICE        LOUISIANA         AECO C             SUMAS
NATURAL GAS                                              ($C/MCF)        ($US/MCF)       ($C/MCF)          ($C/BBL)
- -------------------------------------------------------------------------------------------------------------------

DECEMBER 31, 2003                                            6.63             5.80           6.88              6.94
DECEMBER 31, 2002                                            5.88             4.59           5.97              6.53
===================================================================================================================
</TABLE>


CANADIAN NATURAL RESOURCES LIMITED                                            13
================================================================================

<PAGE>

A FOREIGN EXCHANGE RATE OF $US 0.77/$C 1.00 WAS USED IN THE 2003 EVALUATION.
A FOREIGN EXCHANGE RATE OF $US 0.63/$C 1.00 WAS USED IN THE 2002 EVALUATION.

(2)  2003 PROVED RESERVE ESTIMATES AND VALUES WERE EVALUATED IN ACCORDANCE WITH
     THE SECURITIES AND EXCHANGE COMMISSION (SEC) REQUIREMENTS. THE STATED
     RESERVES HAVE A REASONABLE CERTAINTY OF BEING ECONOMICALLY RECOVERABLE
     USING YEAR-END PRICES AND COSTS HELD CONSTANT THROUGHOUT THE PRODUCTIVE
     LIFE OF THE PROPERTIES.

(3)  2003 PROVED AND PROBABLE RESERVE ESTIMATES AND VALUES WERE EVALUATED IN
     ACCORDANCE WITH THE STANDARDS OF THE CANADIAN OIL AND GAS EVALUATION
     HANDBOOK ("COGEH") AND AS MANDATED BY NI 51-101. THE STATED RESERVES HAVE A
     50% PROBABILITY OF EQUALING OR EXCEEDING THE INDICATED QUANTITIES AND WERE
     EVALUATED USING YEAR-END COSTS AND PRICES HELD CONSTANT THROUGHOUT THE
     PRODUCTIVE LIFE OF THE PROPERTIES.

(4)  RESERVE REPLACEMENT RATIOS WERE CALCULATED USING ANNUAL NET RESERVE
     ADDITIONS COMPRISED OF ALL CHANGE CATEGORIES DIVIDED BY THE NET PRODUCTION
     FOR THAT YEAR.

(5)  COST TO DEVELOP REPRESENTS TOTAL FUTURE CAPITAL FOR EACH RESERVES CATEGORY
     EXCLUDING ABANDONMENT CAPITAL DIVIDED BY THE RESERVES ASSOCIATED WITH THAT
     CATEGORY.

(6)  PRESENT VALUE OF RESERVES ARE BASED UPON DISCOUNTED CASH FLOWS ASSOCIATED
     WITH PRICES AND OPERATING EXPENSES HELD CONSTANT INTO THE FUTURE, BEFORE
     INCOME TAXES. ONLY FUTURE DEVELOPMENT COSTS AND ABANDONMENT COSTS HAVE BEEN
     APPLIED AGAINST FUTURE NET REVENUES.

(7)  2002 RESERVE ESTIMATES WERE EVALUATED IN ACCORDANCE WITH THE STANDARDS OF
     NATIONAL POLICY 2-B WHICH HAS NOW BEEN REPLACED BY NI 51-101. THE STATED
     RESERVES WERE REASONABLY EVALUATED AS ECONOMICALLY PRODUCTIVE USING
     YEAR-END COSTS AND PRICES HELD CONSTANT THROUGHOUT THE PRODUCTIVE LIFE OF
     THE PROPERTIES.

(8)  RESERVES ADDITIONS ARE COMPRISED OF ALL CATEGORIES OF RESERVES CHANGES,
     EXCLUSIVE OF PRODUCTION.

(9)  RESERVES FINDING AND ON STREAM COSTS ARE DETERMINED BY DIVIDING TOTAL
     CAPITAL COSTS FOR EACH YEAR EXCLUDING COST ASSOCIATED WITH HEAD OFFICE,
     ABANDONMENTS, MIDSTREAM AND PROJECT HORIZON BY RESERVES ADDITIONS FOR THAT
     YEAR.


14                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's discussion and analysis ("MD&A") of the financial condition and
results of operations of Canadian Natural Resources Limited ("Canadian Natural"
or the "Company"), should be read in conjunction with the unaudited interim
consolidated financial statements for the three months and year ended December
31, 2003 and the MD&A and the audited consolidated financial statements for the
year ended December 31, 2002.

All dollar amounts, except per common share data, are referenced in millions of
Canadian dollars, except where noted otherwise. The calculation of barrels of
oil equivalent ("boe") is based on a conversion ratio of six thousand cubic feet
of natural gas to one barrel of oil to estimate relative energy content.
Production volumes are the Company's interest before royalties, and realized
prices include the effect of derivative financial instruments, except where
noted otherwise.


FINANCIAL HIGHLIGHTS ($ millions, except per common share amounts)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                        YEAR ENDED
                                                        --------------------------------------------- ------------------------------
                                                              DEC 31         SEP 30          DEC 31         DEC 31          DEC 31
                                                                2003           2003            2002           2003            2002
- ------------------------------------------------------------------------------------------------------------------------------------
<S>    <C>                                              <C>            <C>             <C>            <C>            <C>
Revenue(1)                                              $      1,368   $      1,434    $      1,397   $      5,972   $       4,342
Cash flow from operations attributable to
  common shareholders(2)                                $        734   $        758    $        777   $      3,160   $       2,254
     Per common share          - basic                  $       5.48   $       5.62    $       5.81   $      23.54   $       17.63
                               - diluted                $       5.42   $       5.56    $       5.62   $      23.06   $       16.99
Net earnings attributable to common
  shareholders(3)                                       $        251   $        203    $        209   $      1,407   $         570
     Per common share          - basic                  $       1.87   $       1.51    $       1.56   $      10.48   $        4.46
                               - diluted                $       1.83   $       1.49    $       1.51   $      10.14   $        4.31
Business combination                                    $         --   $         --    $         --   $         --   $       2,393
Capital expenditures, net of dispositions               $        662   $        621    $        292   $      2,506   $       1,676
====================================================================================================================================
</TABLE>
(1)  RESTATED TO EXCLUDE TRANSPORTATION COSTS FROM REVENUE.

(2)  CASH FLOW FROM OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS IS A NON-GAAP
     TERM THAT REPRESENTS NET EARNINGS ATTRIBUTABLE TO COMMON SHAREHOLDERS
     ADJUSTED FOR NON-CASH ITEMS. THE COMPANY EVALUATES ITS PERFORMANCE AND THAT
     OF ITS BUSINESS SEGMENTS BASED ON NET EARNINGS AND CASH FLOW FROM
     OPERATIONS. THE COMPANY CONSIDERS CASH FLOW A KEY MEASURE AS IT
     DEMONSTRATES THE COMPANY'S ABILITY AND THE ABILITY OF ITS BUSINESS SEGMENTS
     TO GENERATE THE CASH FLOW NECESSARY TO FUND FUTURE GROWTH THROUGH CAPITAL
     INVESTMENT AND TO REPAY DEBT.

<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                        YEAR ENDED
                                                       --------------------------------------------- ------------------------------
                                                              DEC 31        SEP 30          DEC 31          DEC 31         DEC 31
   ($ MILLIONS)                                                 2003          2003            2002            2003           2002
   --------------------------------------------------------------------------------------------------------------------------------
   <S>                                                  <C>            <C>            <C>             <C>            <C>
   NET EARNINGS ATTRIBUTABLE TO COMMON SHAREHOLDERS     $        251   $        203   $        209    $       1,407  $         570
   NON-CASH ITEMS:
      FUTURE TAX ON DIVIDEND ON PREFERRED SECURITIES              (1)            (1)            (1)             (4)             (4)
      REVALUATION OF PREFERRED SECURITIES, NET OF TAX             (4)            --             (1)            (18)             (1)
      STOCK-BASED COMPENSATION EXPENSE                            63             32             --              200             --
      DEPLETION, DEPRECIATION AND AMORTIZATION                   405            401            386            1,565          1,314
      UNREALIZED FOREIGN EXCHANGE GAIN                           (81)           (11)            --            (320)            (35)
      DEFERRED PETROLEUM REVENUE (RECOVERY) TAX                  (17)             1              6              (9)             10
      FUTURE INCOME TAX EXPENSE                                  118            133            178              339            400
   --------------------------------------------------------------------------------------------------------------------------------
   CASH FLOW FROM OPERATIONS ATTRIBUTABLE TO COMMON     $        734   $        758   $        777    $       3,160  $       2,254
       SHAREHOLDERS
   ================================================================================================================================
</TABLE>
(3)  AFTER DIVIDEND AND REVALUATION OF PREFERRED SECURITIES.


CANADIAN NATURAL RESOURCES LIMITED                                            15
================================================================================

<PAGE>

Net earnings and cash flow from operations reached record levels in 2003. Net
earnings increased 147% to $1,407 million and 20% to $251 million for the year
and three months ended December 31, 2003 from the comparable periods in 2002.
Cash flow increased 40% to $3,160 million for the year ended December 31, 2003,
but decreased 6% to $734 million for the three months ended December 31, 2003
from the comparable periods in 2002. The increase in net earnings and cash flow
for the year ended December 31, 2003 was a result of higher product prices for
crude oil, NGLs and natural gas and increased production volumes. The increase
in production volumes was primarily associated with an active capital
expenditure program, the consolidation of working interests in the North Sea,
and the impact of a full year of results relating to the acquisition of Rio Alto
Exploration Ltd. ("Rio Alto") on July 1, 2002. Net earnings for 2003 were
impacted compared to the prior year due to the reduction in the Canadian federal
and Alberta provincial corporate income tax rates, the strengthening Canadian
dollar resulting in an unrealized foreign exchange gain on the Company's US
dollar denominated debt, and the recognition of stock-based compensation expense
associated with the Company's Stock Option Plan. Net earnings increased in the
fourth quarter of 2003 from the prior year due to the strengthening Canadian
dollar, resulting in higher unrealized foreign exchange gains. Cash flow in the
fourth quarter of 2003 decreased from the prior quarter due to decreased natural
gas production and higher Petroleum Revenue Tax ("PRT") in the North Sea.

OPERATING HIGHLIGHTS
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>            <C>              <C>            <C>
CRUDE OIL AND NGLS
  ($/bbl, except daily production)
Daily production (bbl/d)                                     244,262        247,016        240,596          242,392       215,335
Sales price(1)                                          $      30.02  $       30.97   $      31.10    $       31.59  $      29.76
Royalties                                                       2.22           2.56           3.53             2.77          3.16
Production expense                                              9.45          10.14           9.10            10.28          8.45
- ---------------------------------------------------------------------------------------------------------------------------------
Netback                                                 $      18.35  $       18.27   $      18.47    $       18.54  $      18.15
- ---------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS
  ($/mcf, except daily production)
Daily production (mmcf/d)                                      1,270          1,289          1,365            1,299         1,232
Sales price(1)                                          $       5.23  $        5.50   $       5.00    $        6.02  $       3.76
Royalties                                                       1.05           1.11           1.09             1.32          0.78
Production expense                                              0.63           0.63           0.57             0.60          0.57
- ---------------------------------------------------------------------------------------------------------------------------------
Netback                                                 $       3.55  $        3.76   $       3.34    $        4.10  $       2.41
- ---------------------------------------------------------------------------------------------------------------------------------
BARRELS OF OIL EQUIVALENT
  ($/boe, except daily production)
Daily production (boe/d)                                     455,935        461,882        468,132          458,814       420,722
Sales price(1)                                          $      30.64  $       31.94   $      30.54    $       33.75  $      26.25
Royalties                                                       4.12           4.46           4.98             5.20          3.91
Production expense                                              6.81           7.17           6.34             7.15          5.99
- ---------------------------------------------------------------------------------------------------------------------------------
Netback                                                 $      19.71  $       20.31   $      19.22    $       21.40  $      16.35
==================================================================================================================================
</TABLE>
(1)  INCLUDES FINANCIAL INSTRUMENTS AND TRANSPORTATION COSTS.


16                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

BUSINESS ENVIRONMENT
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
WTI benchmark price (US $/bbl)                           $     31.18   $      30.20    $     28.17     $      31.02  $       26.11
Differential to LLB blend (US $/bbl)                     $     10.39   $       8.72    $      8.13     $       8.55  $        6.50
Condensate benchmark price (US $/bbl)                    $     31.57   $      29.97    $     28.56     $      31.42  $       26.00
NYMEX benchmark price (US $/mmbtu)                       $      4.58   $       5.10    $      3.99     $       5.44  $        3.25
AECO benchmark price (C $/GJ)                            $      5.30   $       5.95    $      4.98     $       6.35  $        3.86
US/Canadian dollar average exchange rate (US $)                 0.76           0.72           0.64             0.71           0.64
==================================================================================================================================
</TABLE>

World crude oil prices remained strong throughout 2003 due to concerns over
supply relating to the war in Iraq, the strike in Venezuela, the unrest in
Nigeria and rising worldwide demand. West Texas Intermediate ("WTI") prices
averaged US $31.02 per bbl for the year ended December 31, 2003, up 19% from US
$26.11 per bbl in 2002. WTI averaged US $31.18 per bbl in the fourth quarter of
2003, up 3% compared to US $30.20 per bbl in the prior quarter, and up 11% from
US $28.17 per bbl compared to the fourth quarter of 2002. WTI prices continued
to remain strong in the fourth quarter.

Natural gas prices increased in 2003. AECO natural gas price increased 65% to
average $6.35 per GJ in 2003 compared to $3.86 per GJ in 2002. NYMEX natural gas
spot price increased 67% to average US $5.44 per mmbtu compared to US $3.25 per
mmbtu in 2002. Natural gas prices decreased in the fourth quarter of 2003 to
their lowest levels of the year. AECO natural gas price averaged $5.30 per GJ in
the fourth quarter of 2003, down 11% compared to $5.95 per GJ in the prior
quarter, but up 6% compared to the fourth quarter of 2002. NYMEX natural gas
spot price averaged US $4.58 per mmbtu in the fourth quarter of 2003, down 10%
compared to US $5.10 per mmbtu in the prior quarter, but up 15% compared to the
fourth quarter of 2002. The decrease in natural gas prices in the fourth quarter
of 2003 was due to reduced demand and the increase in natural gas storage
levels.



CANADIAN NATURAL RESOURCES LIMITED                                            17
================================================================================

<PAGE>

PRODUCT PRICES
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
CRUDE OIL AND NGLS ($/bbl) (1)
North America                                            $     25.86   $      27.48    $     27.57     $      27.77  $       27.04
North Sea                                                $     41.93   $      39.84    $     41.83     $      42.43  $       39.79
Offshore West Africa                                     $     36.42   $      37.37    $     43.15     $      36.47  $       40.10
Company average                                          $     30.02   $      30.97    $     31.10     $      31.59  $       29.76

NATURAL GAS ($/mcf) (1)
North America                                            $      5.32   $       5.62    $      5.04     $       6.14  $        3.78
North Sea                                                $      3.32   $       2.57    $      3.20     $       3.03  $        2.75
Offshore West Africa                                     $      3.95   $       4.59    $      4.63     $       4.37  $        4.82
Company average                                          $      5.23   $       5.50    $      5.00     $       6.02  $        3.76

PERCENTAGE OF REVENUE
    (excluding midstream revenue)
Crude oil and NGLs                                               52%            52%            52%              49%            58%
Natural gas                                                      48%            48%            48%              51%            42%
==================================================================================================================================
</TABLE>

(1)  INCLUDING FINANCIAL INSTRUMENTS AND TRANSPORTATION COSTS.

Realized crude oil prices increased for the year ended December 31, 2003 from
the comparable period in 2002 due to higher world crude oil prices. Overall,
realized crude oil prices decreased for the three months ended December 31, 2003
from the comparable period in 2002 due to the stronger Canadian dollar and
higher heavy oil differentials in North America. Heavy oil differentials
averaged US $10.39 per bbl in the fourth quarter of 2003, up 28% from US $8.13
per bbl in the fourth quarter of 2002 and up 19% from US $8.72 per bbl in the
third quarter of 2003. The realized crude oil price in the North Sea increased
in the fourth quarter as a result of higher world oil prices and the impact of
the Company's derivative financial instruments. The Offshore West Africa
realized crude oil price decreased due to the timing of and prices received on
specific product lifting dates. As a result of the use of derivative financial
instruments, the realized price from the sale of crude oil decreased $1.07 per
bbl for the year ended December 31, 2003 (2002 - $1.46 per bbl reduction). The
use of derivative financial instruments increased the Company's price of crude
oil by $0.55 per bbl for the fourth quarter of 2003 ($0.48 per bbl and $1.73 per
bbl reduction, respectively, for the quarters ended September 30, 2003 and
December 31, 2002).

The Company continues to look for opportunities to expand its heavy oil markets.
In particular, the Company is testing a 50/50 blend of bitumen and synthetic
crude oil called "Synbit". Synbit has similar properties to medium sour crude
and is expected to decrease the demand for supplies of condensate currently
blended with bitumen. The Company is currently marketing 34,000 bbl/d of Synbit
to refiners located in the U.S. Midwest and plans to expand this effort
throughout 2004 to build a solid new market for both heavy and synthetic crude
oil.


18                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

The Company's average natural gas price increased 60% to $6.02 per mcf for the
year ended December 31, 2003 and increased 5% to $5.23 per mcf for the three
months ended December 31, 2003 from the comparable periods in 2002 due to market
forces of supply and demand. The Company's average natural gas price decreased
5% in the fourth quarter from the prior quarter due to higher than expected
storage levels heading into the winter heating season. Derivative financial
instruments entered into by the Company on its natural gas portfolio decreased
the price received by $0.19 per mcf for the year 2003 and $0.03 per mcf for the
fourth quarter of 2003 ($0.01 per mcf reduction for the year ended December 31,
2002 and a $0.07 per mcf reduction for the quarters ended September 30, 2003 and
December 31, 2002).

A comparison of the price received for the Company's North American production
is as follows:

<TABLE>
<CAPTION>
                                                                               Q4 2003               Q3 2003               Q4 2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>                   <C>                   <C>
Canadian Natural's Wellhead Price(1)
    Light crude oil and NGLs (C $/bbl)                               $           34.76     $           34.37     $           36.08
    Pelican Lake crude oil (C $/bbl)                                 $           24.74     $           27.20     $           25.30
    Primary heavy crude oil (C $/bbl)                                $           22.18     $           24.93     $           24.78
    Thermal heavy crude oil (C $/bbl)                                $           22.05     $           23.58     $           24.11
    Natural gas (C $/mcf)                                            $            5.32     $            5.62     $            5.04
- ----------------------------------------------------------------------- ---------------- ---- ---------------- ---- --------------
</TABLE>
(1)  INCLUDING FINANCIAL INSTRUMENTS AND TRANSPORTATION COSTS.


DAILY PRODUCTION
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
North America                                                176,429        174,838        181,744          174,895        169,675
North Sea                                                     54,529         60,193         51,478           56,869         38,876
Offshore West Africa                                          13,304         11,985          7,374           10,628          6,784
- ---------------------------------------------------------------------------------------------------------------------------------
Total                                                        244,262        247,016        240,596          242,392        215,335
- ---------------------------------------------------------------------------------------------------------------------------------

NATURAL GAS (mmcf/d)
North America                                                  1,206          1,229          1,331            1,245          1,204
North Sea                                                         52             49             32               46             27
Offshore West Africa                                              12             11              2                8              1
- ---------------------------------------------------------------------------------------------------------------------------------
Total                                                          1,270          1,289          1,365            1,299          1,232
- ---------------------------------------------------------------------------------------------------------------------------------

PRODUCT MIX
Light crude oil and NGLs                                         25%            26%            22%              25%            21%
Pelican Lake crude oil                                            5%             5%             6%               5%             7%
Primary heavy crude oil                                          16%            15%            15%              15%            14%
Thermal heavy crude oil                                           8%             8%             8%               8%             9%
Natural gas                                                      46%            46%            49%              47%            49%
==================================================================================================================================
</TABLE>


CANADIAN NATURAL RESOURCES LIMITED                                            19
================================================================================

<PAGE>

Crude oil and NGLs production for the year and three months ended December 31,
2003 increased 13% or 27,057 bbl/d and 2% or 3,666 bbl/d respectively from the
comparable periods in 2002. Crude oil and NGLs production for the fourth quarter
of 2003 was in line with the Company's guidance previously provided.

Crude oil and NGLs production in North America for the year ended December 31,
2003 increased 3% or 5,220 bbl/d from the comparable period in 2002. The
increase was due to additional heavy crude oil drilling activity in the second
quarter of 2003, property acquisitions in the Company's core operating regions
in 2002, and the acquisition of Rio Alto. Crude oil and NGLs production in North
America for the three months ended December 31, 2003 decreased 3% or 5,315 bbl/d
from the comparable period in 2002 but increased 1% or 1,591 bbl/d from the
prior quarter. The decrease in North American crude oil production for the three
months ended December 31, 2003 from the comparable period in 2002 was due to an
increased focus on natural gas drilling and production declines at the Pelican
Lake Field. The production declines in Pelican Lake were the result of the
implementation of the water flood program that required producing wells to be
converted to injectors.

Crude oil production from the North Sea for the year and three months ended
December 31, 2003 increased 46% or 17,993 bbl/d and 6% or 3,051 bbl/d from the
comparable periods in 2002. The increase was a result of drilling activities and
the consolidation of the Company's working interests in the North Sea during the
last two years. Crude oil production in the fourth quarter decreased 9% or 5,664
bbl/d from the previous quarter due to the timing of well workovers, which
resulted in the Lyell Field and the Columba 2B well being shut in for portions
of the fourth quarter.

Offshore West Africa crude oil production for the year and three months ended
December 31, 2003 increased 57% or 3,844 bbl/d and 80% or 5,930 bbl/d from the
comparable periods in 2002. In addition, crude oil production in the fourth
quarter increased 11% or 1,319 bbl/d from the prior quarter. The increases in
production are due to the perforation of the upper zone of the East Espoir
structure in the second quarter of 2003 and the completion of the fourth water
injection well and an additional production well in the third quarter of 2003.

Natural gas production for the year and fourth quarter of 2003 was in line with
the Company's guidance previously provided. Natural gas production for the year
ended December 31, 2003 increased 5% or 67 mmcf/d from the comparable period in
2002. The increase in natural gas production was due to the acquisition of Rio
Alto on July 1, 2002 and ongoing drilling activities. Natural gas production in
the fourth quarter continued to represent the Company's largest product offering
but decreased 7% or 95 mmcf/d from the comparable period in 2002. The decrease
was due to drilling activity in the last half of 2003, which focused on shallow
natural gas in the South Alberta region, not offsetting the normal production
declines from winter access fields in the Company's other core regions. Natural
gas production decreased 1% or 19 mmcf/d from the prior quarter due to normal
production declines. Production from the Ladyfern field in Northeast British
Columbia declined 8 mmcf/d to average 39 mmcf/d during the fourth quarter of
2003, down from 47 mmcf/d in the third quarter of 2003 and 127 mmcf/d in the
fourth quarter of 2002 as well pressures continue to decline. Fourth quarter
production was also impacted by the shut in of approximately 11 mmcf/d of the
Company's natural gas production in the Athabasca Wabiskaw-McMurray oilsands
area pursuant to the decision of the Alberta Energy and Utilities Board ("EUB")
effective September 1, 2003. Based on the EUB Regional Geological Study, 5
mmcf/d of natural gas previously shut in was brought back on production in 2004
and the Company estimates that an additional 11 mmcf/d of natural gas production
may be at risk of being shut in. No shut-in date has been established on the
additional 11 mmcf/d of natural gas. The Alberta Department of Energy ("ADOE")
has announced an interim assistance plan under which Alberta crown royalty
deferrals are granted at a rate of $0.60/mcf of shut-in production.

Natural gas production in the North Sea increased from the comparable periods in
the prior year due to the increased working interests acquired in the Banff
Field.

Natural gas production in Offshore West Africa increased over the comparable
period in the prior year due to the start up of the natural gas pipeline in the
third quarter of 2002. Natural gas production also increased over the comparable
periods in the prior year due to the perforation of the upper zone of the East
Espoir structure in the second quarter of 2003 and the drilling of an additional
production well in the third quarter of 2003.

The Company expects first quarter production levels to average 1,285 to 1,315
mmcf/d of natural gas and 245,000 to 265,000 bbl/d of crude oil and NGLs.
Revised annual production levels of approximately 1,320 to 1,395 mmcf/d of
natural gas and 263,000 to 283,000 bbl/d of crude oil and NGLs are expected in
2004.


20                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

ROYALTIES
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
CRUDE OIL AND NGLS ($/bbl)
North America                                            $      3.05   $       3.52    $      3.82     $       3.79  $        3.42
North Sea                                                $     (0.15)  $       0.09    $      2.79     $      (0.03) $        2.30
Offshore West Africa                                     $      1.03   $       1.13    $      1.35     $       1.08  $        1.35
Company average                                          $      2.22   $       2.56    $      3.53     $       2.77  $        3.16

NATURAL GAS ($/mcf)
North America                                            $      1.10   $       1.16    $      1.11     $       1.38  $        0.80
Offshore West Africa                                     $      0.11   $       0.14    $      0.15     $       0.13  $        0.15
Company average                                          $      1.05   $       1.11    $      1.09     $       1.32  $        0.78

COMPANY AVERAGE ($/boe)                                  $      4.12   $       4.46    $      4.98     $       5.20  $        3.91

PERCENTAGE OF REVENUE(1) (2)
Crude oil and NGLs                                                8%             8%            11%               9%            10%
Natural gas                                                      20%            20%            21%              21%            21%
Boe                                                              14%            14%            16%              15%            14%
==================================================================================================================================
</TABLE>
(1)  EXCLUDES THE IMPACT OF FINANCIAL INSTRUMENTS.

(2)  TRANSPORTATION COSTS NETTED AGAINST REVENUE.

North America crude oil and NGLs royalties for the year ended December 31, 2003
increased on a per barrel basis from the comparable period in the prior year due
to higher crude oil prices and certain heavy oil projects reaching payout in
2002 and becoming subject to higher government royalty rates. North America
crude oil and NGLs royalties for the three months ended December 31, 2003
decreased on a per barrel basis from the comparable period in 2002 and the prior
quarter due to lower realized wellhead prices.


North Sea crude oil royalties decreased from the comparable periods in the prior
year as a result of the elimination of government royalties in the North Sea
effective January 1, 2003. In the fourth quarter of 2003, the Company received a
refund of royalties previously provided related to the Ninian Field.

Natural gas royalty fluctuations as a percentage of revenue from both the
comparable periods in the prior year and the prior quarter are a result of the
strong correlation of royalties to natural gas prices.


CANADIAN NATURAL RESOURCES LIMITED                                            21
================================================================================

<PAGE>

PRODUCTION EXPENSE
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
CRUDE OIL AND NGLS ($/bbl)
North America                                            $      8.43   $       9.27    $      7.34     $       9.14  $        6.73
North Sea                                                $     13.42   $      13.25    $     14.68     $      14.07  $       15.06
Offshore West Africa                                     $      6.67   $       7.11    $     13.68     $       8.68  $       13.63
Company average                                          $      9.45   $      10.14    $      9.10     $      10.28  $        8.45

NATURAL GAS ($/mcf)
North America                                            $      0.60   $       0.58    $      0.55     $       0.57  $        0.55
North Sea                                                $      1.16   $       1.60    $      1.25     $       1.33  $        1.53
Offshore West Africa                                     $      1.18   $       1.24    $      1.85     $       1.39  $        1.81
Company average                                          $      0.63   $       0.63    $      0.57     $       0.60  $        0.57

COMPANY AVERAGE ($/boe)                                  $      6.81   $       7.17    $      6.34     $       7.15  $        5.99
- ----------------------------------------------------------- ---------- -- ----------- --- ----------- -- ----------- -- ------------
</TABLE>

North America crude oil and NGLs production expense per barrel increased for the
year and three months ended December 31, 2003 from the comparable periods in
2002. The increase was due to the impact of higher natural gas prices on the
costs of fuel gas used in the generation of steam in the Company's thermal heavy
oil operations, as well as slightly higher steam oil ratios. Conversely, fourth
quarter 2003 production expense per barrel decreased from the third quarter 2003
due to a reduction in natural gas prices and as a result of cost reductions
achieved on light and heavy oil properties acquired in 2002. Production expense
per barrel also decreased as a result of reduced heavy oil activity in the last
half of 2003. The decrease in production expense per barrel was partially offset
by higher unit costs associated with Pelican Lake, which have increased from
historical levels due to the conversion of producing wells to injection wells
during the implementation of the waterflood pilot project.

North Sea crude oil production expense varies on a per barrel basis from both
the comparable periods in the prior year and the prior quarter is a result of
the timing of maintenance work and the changes in production volumes on a
relatively fixed cost base.

Offshore West Africa crude oil production expenses are largely fixed in nature
and therefore decreased on a per barrel basis from the comparable periods due to
increased production from the Espoir Field.

North America natural gas production expense per mcf in the year and three
months ended December 31, 2003 increased marginally from the comparable periods
in the prior year as a result of a general increase in service costs associated
with increased industry activity. North Sea natural gas production expense
decreased per mcf from comparable periods in the prior year due to costs
associated with the natural gas pipeline blockage that occurred in 2002.
Offshore West Africa natural gas production expense decreased per mcf for the
year and three months ended December 31, 2003 as production volumes increased
while costs remained relatively fixed.


22                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

MIDSTREAM ($ millions)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Revenue                                                  $        16   $         13    $        15    $          61  $          52
Operating costs                                                    4              3              5               15             14
- ----------------------------------------------------------------------------------------------------------------------------------
Operating cash flow                                               12             10             10               46             38
Depreciation                                                       1              2              2                7              8
- ----------------------------------------------------------------------------------------------------------------------------------
Segment earnings before taxes                            $        11   $          8    $         8    $          39  $          30
==================================================================================================================================
</TABLE>

The Company's midstream assets consist of three crude oil pipeline systems and
an 84-megawatt cogeneration plant at Primrose where the Company has a 50%
working interest. Approximately 86% of the Company's heavy oil production was
transported to international liquid pipelines via the 100% owned and operated
ECHO Pipeline, the 62% owned and operated Pelican Lake Pipeline, and the 15%
owned Cold Lake Pipeline. The midstream pipeline assets allow the Company to
transport its own production volumes at reduced costs compared to other
transportation alternatives as well as earn third party revenue. This
transportation control enhances the Company's ability to control the full range
of costs associated with the development and marketing of its heavy oil.

Revenue from the midstream assets increased for the year ended December 31, 2003
from the comparable period in 2002 due to higher electricity prices received in
the first quarter of 2003 and increased revenue generated as a result of the
expansion of the ECHO pipeline. The expansion of the ECHO pipeline was completed
in October 2003 and increased capacity to 72 mbbl/d from 58 mbbl/d. Midstream
revenue increased for the three months ended December 31, 2003 from the prior
quarter due to the expansion of the Echo pipeline and the cogeneration plant
returning to full operations after being down for maintenance during the third
quarter.

The Cold Lake Pipeline Limited Partnership, in which the Company has a 15%
working interest, will be investing $16 million in 2004 to construct new
facilities to allow shipment of up to 60,000 bbl/d of the Synbit product.
Currently, the Cold Lake pipeline transports a single oil blend consisting of
heavy Cold Lake bitumen and light conventional condensate. The new SynBit blend
stream will include light synthetic oil as a blending component to dilute the
heavy, tar-like, Cold Lake bitumen. The SynBit project will involve construction
of two 80,000 barrel storage tanks, pumping facilities and metering equipment on
the Cold Lake system. Regulatory approvals have been obtained and construction
activity is currently underway.

DEPLETION, DEPRECIATION AND AMORTIZATION
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Expense ($ millions)                                     $       404   $        399    $       384     $      1,558  $      1,306
         $/boe                                           $      9.59   $       9.41    $      8.92     $       9.30  $       8.51
==================================================================================================================================
</TABLE>
(1)  DD&A EXCLUDES DEPRECIATION ON MIDSTREAM ASSETS.

DD&A for the year and three months ended December 31, 2003 increased in total
and per boe from the comparable periods in 2002. The increase was due to higher
finding and development costs associated with natural gas exploration in North
America, the allocation of the acquisition costs associated with Rio Alto and
future abandonment costs associated with the acquisition of additional interests
in the North Sea. In addition, DD&A included the write-off of $12 million of
costs associated with the Company's exploration activity in offshore France.
DD&A increased from the prior quarter in total and per boe due to higher finding
and development costs.


CANADIAN NATURAL RESOURCES LIMITED                                            23
================================================================================

<PAGE>

ADMINISTRATION EXPENSE
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Net expense ($ millions)                                 $        24   $         22    $        17     $         87  $          61
         $/boe                                           $      0.58   $       0.51    $      0.41     $       0.52  $        0.40
==================================================================================================================================
</TABLE>

Administration expense for the year and three months ended December 31, 2003
increased in total and on a per boe basis from the comparable periods in 2002
due to higher staffing levels associated with the growth in the Company's
expanding asset base.

STOCK-BASED COMPENSATION
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Expense ($ millions)                                     $        63   $      32       $        --    $         200  $         --
         $/boe                                           $      1.50   $    0.77       $        --    $        1.20  $         --
==================================================================================================================================
</TABLE>

In June 2003, the Board of Directors approved an amendment to the Company's
Stock Option Plan (the "Option Plan") that provides current employees, officers
and directors (the "option holders") with the right to elect to receive common
shares or a direct cash payment in exchange for options surrendered. The
amendment to the Option Plan balances the need for a long-term compensation
program to retain employees with reducing the impact of dilution on current
shareholders and the reporting of the expense associated with stock options.
Transparency of the cost of the Option Plan is increased since changes in the
intrinsic value of outstanding stock options are expensed. The cash payment
feature provides option holders with substantially the same benefits and allows
them to realize the value of their options through a simplified administration
process.

As a result of the amendment to the Option Plan, the Company has recorded a
liability of $171 million for expected cash settlements based on the intrinsic
value of the outstanding stock options (the difference between the exercise
price of the stock options and the market price of Canadian Natural's common
shares). The compensation expense for the year to date is $200 million ($136
million after tax). The liability is revalued quarterly to reflect changes in
the market price of the Company's common shares and the net change will be
recognized in net earnings for the quarter. For the period ended December 31,
2003, the Company has paid $31 million for stock options surrendered for cash
settlement.

INTEREST EXPENSE
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Interest expense ($ millions)                            $        33   $         35    $        53     $        157  $         159
         $/boe                                           $      0.79   $       0.83    $      1.22     $       0.94  $        1.03
Average effective interest rate                                 4.5%           4.5%           5.0%             4.7%           4.5%
==================================================================================================================================
</TABLE>

Interest expense for the year and three months ended December 31, 2003 decreased
from the comparable periods as a result of lower debt levels as the Company used
excess cash flow generated to repay $740 million of long-term debt in 2003. In
addition, the strengthening Canadian dollar reduced the Canadian equivalent
interest expense on the Company's US dollar denominated debt.


24                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

FOREIGN EXCHANGE ($ millions)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                              DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Realized foreign exchange (gain) loss                    $        (6)  $          3    $         2     $          8  $           4
Unrealized foreign exchange (gain)                               (81)           (11)            --             (320)           (35)
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL                                                    $       (87)  $         (8)   $         2     $       (312) $         (31)
==================================================================================================================================
</TABLE>

The Canadian dollar increased to US $0.77 at December 31, 2003 compared to US
$0.63 at January 1, 2003, resulting in an unrealized foreign exchange gain on
the Company's US dollar denominated debt.

The Company's realized product prices are sensitive to currency exchange rates.
Recent increases in the value of the Canadian dollar in relation to the US
dollar have had a negative impact on the Company's commodity price realizations
(see Sensitivity Analysis).

In order to mitigate a portion of the volatility associated with the Canadian
dollar, the Company has designated certain US dollar denominated debt as a hedge
against its net investment in US dollar based self-sustaining foreign
operations. Accordingly, translation gains and losses on this US dollar
denominated debt are included in the foreign currency translation adjustment in
shareholders' equity in the consolidated balance sheets.

TAXES ($ millions, except income tax rates)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
 TAXES OTHER THAN INCOME TAX                                  DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                                2003           2003           2002             2003           2002
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>           <C>             <C>             <C>           <C>
Current                                                  $        43   $         28    $        15     $        116  $          53
Deferred                                                         (17)             1              6               (9)            10
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL                                                    $        26   $         29    $        21     $        107  $          63
- ----------------------------------------------------------------------------------------------------------------------------------

CURRENT INCOME TAX
North Sea                                                $         2   $          5    $       (35)    $         23  $         (19)
Offshore West Africa                                               3              3              1               10              6
North America - Current income tax                                 3             12              -               43             --
North America - Large corporations tax                             1              5              6               16             21
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL                                                    $         9   $         25    $       (28)    $         92  $           8
- ----------------------------------------------------------------------------------------------------------------------------------

FUTURE INCOME TAX                                        $       118   $        133    $       178     $        339  $         400
EFFECTIVE INCOME TAX RATE                                      33.9%          43.6%          41.7%            23.6%          41.6%
==================================================================================================================================
</TABLE>
Taxes other than income tax consists of current and deferred Petroleum Revenue
Tax ("PRT"), other international taxes and provincial capital taxes. PRT is
charged on certain fields in the North Sea at the rate of 50% of net operating
income, after certain deductions including abandonment expenditures. Taxes other
than income taxes increased from the comparable periods in 2002 as a result of
higher crude oil prices and increased production levels. Fourth quarter taxes
other than income taxes increased from the previous quarter due to higher
realized crude oil prices in the North Sea.


CANADIAN NATURAL RESOURCES LIMITED                                            25
================================================================================

<PAGE>

North Sea current income tax for the year and three months ended December 31,
2003 increased from the previous year due to the changes in the tax rules in the
North Sea. In 2003, a supplementary charge of 10% on profits from UK North Sea
crude oil and natural gas production was introduced. The North Sea supplementary
charge, which took effect April 17, 2002, is in addition to the corporate tax
rate of 30% and excludes any deduction for financing costs. In addition, the
first year capital allowance rate for plant and machinery expenditures was
increased to 100% from the previous rate of 25%. In the fourth quarter of 2002,
North Sea current income tax expense was positively impacted by the settlement
of certain outstanding matters from prior years in the amount of $11 million.
Current income tax in the fourth quarter 2003 decreased from the third quarter
due to higher PRT expense, which is deductible against corporate income taxes.

Taxable income from the conventional crude oil and natural gas business in
Canada is generated by partnerships and the related income taxes will be payable
in the following year. Current income taxes have been provided on the basis of
the corporate structure and available income tax deductions. No current income
tax provision was required for North America in 2002.

In 2003, the Canadian Federal Government passed legislation to eliminate the
federal Large Corporations Tax ("LCT") over a five-year period starting January
1, 2004. The LCT was levied at a rate of 0.225% of the Company's taxable capital
employed in Canada in 2003 (2004 - 0.2%). The Federal Government also passed
legislation to reduce the general corporate income tax rate on income from
resource activities from 28% to 21% over a five-year period starting January 1,
2003, bringing the resource industry in line with the general corporate income
tax rate. As part of the corporate income tax rate reduction, the legislation
also provides for the elimination of the existing 25% resource allowance and the
introduction of a deduction for actual provincial and other crown royalties
paid. As a result of these changes, the future income tax liability in North
America was decreased by $247 million in 2003. In addition, in 2003 the North
America future tax liability was reduced by $31 million as a result of a
reduction in the Alberta corporate income tax rate (2002 - $21 million).


26                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

CAPITAL EXPENDITURES ($ millions)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                             DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                               2003           2003           2002             2003           2002
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>             <C>             <C>            <C>
Business combinations                                   $        --   $         --    $        --     $         --   $      2,393
- ---------------------------------------------------------------------------------------------------------------------------------

EXPENDITURES ON PROPERTY, PLANT AND
  EQUIPMENT
Net property acquisitions                               $        29   $        106    $        39     $        336   $        440
Land acquisition and retention                                   44             53             18              154            114
Seismic evaluations                                              25             12             19               77             63
Well drilling, completion and equipping                         352            256            139            1,194            626
Pipeline and production facilities                              133            133             45              522            292
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL NET RESERVE REPLACEMENT                                   583            560            260            2,283          1,535
  EXPENDITURES
Horizon Oil Sands Project                                        52             32             19              152             68
Midstream                                                         2              5              6               11             20
Abandonments                                                     20             14              4               40             43
Head office                                                       5             10              3               20             10
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CAPITAL EXPENDITURES                          $       662   $        621    $       292     $      2,506   $      1,676
=================================================================================================================================

North America                                           $       431   $        407    $       124     $      1,769   $      1,026
North Sea                                                       106             99            120              338            323
Offshore West Africa                                             46             54             16              176            186
Horizon Oil Sands Project                                        52             32             19              152             68
Midstream                                                         2              5              6               11             20
Abandonments                                                     20             14              4               40             43
Head office                                                       5             10              3               20             10
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL NET CAPITAL EXPENDITURES                          $       662   $        621    $       292     $      2,506   $      1,676
=================================================================================================================================
</TABLE>

In 2003, the Company drilled a total of 777 net natural gas wells and 458 net
crude oil wells, a 380% and a 73% increase respectively over the comparable
period in 2002. North America fourth quarter drilling was focused in the
Company's heavy crude oil areas of North Alberta, its shallow gas area in South
Alberta and its natural gas area in Northwest Alberta. North America capital
expenditures also included the expansion of the Company's Primrose properties,
where additional wells were drilled in the fourth quarter. Steaming commenced in
early 2004 and production from these wells is expected in mid-2004. The
construction of the $250 million expansion of the Primrose In-Situ project will
commence in the fall of 2004 and is expected to increase production to 90,000
bbl/d of bitumen by 2007 from the current 40,000 bbl/d of bitumen. At Pelican
Lake, the enhanced oil recovery waterflood test program was a success and the
Company will begin the phased roll out of the waterflood with approximately 20%
of the field being under waterflood by the end of 2004. The waterflood will
stabilize production but will require a further 63 Pelican Lake productive wells
to be converted from producers to water injectors and 87 new wells to be drilled
as producers. During the fourth quarter of 2003, two pilot wells were converted
to injector status.


CANADIAN NATURAL RESOURCES LIMITED                                            27
================================================================================

<PAGE>

Capital expenditures also included work on the Horizon Oil Sands Project
("Horizon Project") where work on the Engineering Design Study ("EDS"), the
third and final stage of engineering work, has commenced. In the fourth quarter,
the Company completed construction work on the access road and three bridges.
The 2004 capital budget for the Horizon Project will be phased in over the year
and is dependent on regulatory approval and cost estimates. In 2004, the EDS
will be completed with a capital budget of $150 million. Regulatory review for
the environmental assessment of the Horizon Project was conducted in September
2003 and the Company received approval from the review panel in January 2004.
Final regulatory approvals are expected in the first half of 2004. With final
regulatory approval, the completion of the EDS and confirmation of cost
estimates, Board of Director approval will be sought in late 2004. Depending
upon the timing of final approval, a total of $200 to $400 million is budgeted
for the Horizon Project in 2004. The Company anticipates that 80% of the
detailed engineering will be completed before it commits to the construction of
Horizon Project.

During the fourth quarter, the Company drilled 2 crude oil wells and 1 water
injector in the UK sector of the North Sea. In 2004, the Company anticipates
drilling approximately 13 crude oil wells, implementing a secondary recovery
natural gas injection scheme at Banff, optimizing Ninian and Murchison
waterfloods, and continuing its 2003 recompletion program.

During the fourth quarter, development of the Baobab Field continued with the
drilling of water injection and production wells. Construction of the Floating
Production, Storage and Offtake vessel is currently underway. Production from
the Baobab Field is expected to commence in mid 2005. The fourth quarter also
included the completion of the drilling of the first of several potential
exploration targets located on Block 16, offshore Angola. The well, Zenza-1, in
which the Company has a 50% working interest was drilled in 1,300 metres of
water, reached a total depth of 3,998 metres and was drilled for a total cost of
US $17 million. The well encountered reservoir quality sands in four zones and
shows of hydrocarbons were encountered but not of sufficient amounts to be
commercial. Accordingly the well has been plugged and abandoned. The results of
the well will be integrated into the geological model for Block 16 and a second
exploratory well will be drilled in 2005.


28                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>



LIQUIDITY AND CAPITAL RESOURCES
 ($ millions, except ratios)
<TABLE>
<CAPTION>
                                                                  DEC 31             SEP 30             DEC 31
                                                                    2003               2003               2002
- --------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>                <C>
Working capital deficit (1)                              $           505   $            528   $             14
Long-term debt                                                     2,645              2,766              4,074
- --------------------------------------------------------------------------------------------------------------
TOTAL                                                    $         3,150   $          3,294   $          4,088
- --------------------------------------------------------------------------------------------------------------

SHAREHOLDERS' EQUITY
Preferred securities                                     $           103   $            108   $            126
Share capital                                                      2,353              2,348              2,304
Retained earnings                                                  3,644              3,428              2,414
Foreign currency translation adjustment                               17                  9                 24
- --------------------------------------------------------------------------------------------------------------
TOTAL                                                    $         6,117   $          5,893   $          4,868
- --------------------------------------------------------------------------------------------------------------

Debt to cash flow(1) (2)                                            0.9X               0.9x               1.8x
Debt to EBITDA(2) (3)                                               0.8X               0.8x               1.6x
Debt to book capitalization(1)                                     31.6%              33.4%              45.6%
Debt to market capitalization(1)                                   24.2%              28.1%              38.9%
After tax return on average common                                 25.7%              26.4%              13.8%
  shareholders' equity(2)
After tax return on average capital                                16.7%              16.4%               8.9%
  employed(2)
==============================================================================================================
</TABLE>
(1)  INCLUDES CURRENT PORTION OF LONG-TERM DEBT.

(2)  BASED ON TRAILING 12-MONT ACTIVITY.

(3)  EARNINGS BEFORE INTEREST, TAXES, DEPLETION, DEPRECIATION AND AMORTIZATION.

The Company recognizes the need for a strong financial position in order to
withstand volatile crude oil and natural gas commodity prices and the
operational risks inherent in the crude oil and natural gas business
environment. In 2003, $740 million of long-term debt was repaid. Long-term debt
was also reduced by an additional $529 million as a result of foreign exchange
gains. In the fourth quarter, long-term debt was reduced by $14 million through
debt repayments and $110 million as a result of foreign exchange gains on the
Company's US dollar denominated debt. Higher than budgeted prices received for
the Company's products during 2003 have resulted in increased cash flow to the
Company in 2003 over the budget established in late 2002. Early in 2003, the
Company agreed to allocate a minimum of 50% of its cash flow surplus toward debt
repayment. The remaining excess is directed to the Company's authorized share
buy-back program and additional expenditures on conventional crude oil and
natural gas opportunities. The largest portion of the additional capital
expenditures took place in the fourth quarter of 2003 and accordingly did not
add materially to Canadian Natural's 2003 average production volumes. As at
December 31, 2003, the Company had purchased 2,734,800 common shares for a total
cost of $144 million at an average purchase price of $52.51 per common share.


CANADIAN NATURAL RESOURCES LIMITED                                            29
================================================================================

<PAGE>

The Company's financial objectives are to maintain a strong balance sheet in
order to be in a position to finance its operations, to provide a capital
structure that is flexible for future opportunities and unforeseen events, and
to maintain strong credit ratings allowing for accessibility to public debt
markets. These objectives are extremely important entering into the construction
years of the Horizon Oil Sands Project. The financing of the first phase of
development will be guided by the competing principles of retaining as much
direct ownership interest as possible while maintaining current strong debt
ratings and not issuing additional equity in common shares. The Company is also
investigating the use of long-term commodity hedges in order to reduce cash flow
risks during the construction phase. The Company could also look to offload
capital commitments through the acceptance of complementary business partners,
or potentially, project joint venture partners. Recent commodity price increases
have significantly strengthened the balance sheet of the Company, placing it in
a better position to achieve all three of its guiding principles.

On January 22, 2004, the Company announced the renewal of its Normal Course
Issuer Bid through the facilities of the Toronto Stock Exchange and the New York
Stock Exchange to purchase up to 6,690,385 common shares or 5% of the
outstanding common shares of the Company on the date of announcement during the
12-month period beginning January 24, 2004 and ending January 23, 2005.

COMMITMENTS

The Company has committed to certain payments over the next five years as
follows:

<TABLE>
<CAPTION>
                                              2004     2005     2006     2007     2008   THEREAFTER
- ---------------------------------------------------------------------------------------------------
<S>                                         <C>      <C>      <C>      <C>      <C>         <C>
Natural gas transportation                  $  180   $  169   $  143   $  103   $   77      $  194
Oil transportation and pipeline             $   15   $   13   $   13   $   15   $   13      $  167
Offshore equipment operating lease          $  169   $  129   $   75   $   75   $   75      $  367
Electricity                                 $    7   $    2   $    1   $   --   $   --      $   --
Office lease                                $   20   $   20   $   19   $   17   $   16      $   50
Processing                                  $    6   $    5   $    2   $   --   $   --      $   --
Long-term debt repayments                   $  184   $  194   $   --   $  165   $   40      $1,978
- ------------------================================================================================
</TABLE>


30                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

SENSITIVITY ANALYSIS (1)

Annualized sensitivities to certain factors, which would influence the Company's
financial results, are estimated as follows:
<TABLE>
<CAPTION>
                                                       CASH FLOW           CASH FLOW
                                                            FROM                FROM               NET                NET
                                                   OPERATIONS(2)        OPERATIONS(2)       EARNINGS(2)        EARNINGS(2)
                                                                        (per common                           (per common
                                                    ($ millions)        share, basic)      ($ millions)      share, basic)
- --------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>             <C>                   <C>            <C>
PRICE CHANGES
Crude oil - WTI US $1.00/bbl(3)
   Excluding financial derivatives                           $88               $0.66               $63              $0.47
   Including financial derivatives                        $65-88          $0.48-0.66            $46-63         $0.34-0.47
Natural gas - AECO C $0.10/mcf(3)
   Excluding financial derivatives                           $35               $0.26               $21              $0.16
   Including financial derivatives                        $32-34          $0.24-0.25            $19-21         $0.14-0.16

VOLUME CHANGES
Crude oil - 10,000 bbl/d                                     $50               $0.37               $17              $0.12
Natural gas  - 10 mmcf/d                                     $13               $0.10                $5              $0.04

FOREIGN CURRENCY RATE CHANGE
$0.01 change in C $ in relation to US $(3)
   Excluding financial derivatives                           $48               $0.36               $15              $0.11
   Including financial derivatives                        $41-44          $0.31-0.33            $10-13         $0.08-0.09

INTEREST RATE CHANGE - 1%                                    $10               $0.08               $10              $0.08
==========================================================================================================================
</TABLE>
(1)  THE SENSITIVITIES ARE CALCULATED BASED ON 2003 FOURTH QUARTER RESULTS.

(2)  ATTRIBUTABLE TO COMMON SHAREHOLDERS.

(3)  FOR DETAILS OF FINANCIAL DERIVATIVES IN PLACE, SEE THE INTERIM CONSOLIDATED
     FINANCIAL STATEMENT NOTE 9.



CANADIAN NATURAL RESOURCES LIMITED                                            31
================================================================================

<PAGE>

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements in this document or incorporated herein by reference may
constitute "forward-looking statements" within the meaning of the United States
Private Litigation Reform Act of 1995. These forward-looking statements can
generally be identified as such because of the context of the statements
including words such as the Company "believes", "anticipates", "expects",
"plans", "estimates" or words of a similar nature.

The forward-looking statements are based on current expectations and are subject
to known and unknown risks, uncertainties and other factors which may cause the
actual results, performance or achievements of the Company, or industry results,
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others: the general economic and business conditions which will, among
other things, impact demand for and market prices of the Company's products; the
foreign currency exchange rates; the economic conditions in the countries and
regions in which the Company conducts business; the political uncertainty,
including actions of or against terrorists, insurgent groups or other conflict
including conflict between states; the industry capacity; the ability of the
Company to implement its business strategy, including exploration and
development activities; the ability of the Company to complete its capital
programs; the ability of the Company to transport its products to market;
potential delays or changes in plans with respect to exploration or development
projects or capital expenditures; the availability and cost of financing; the
success of exploration and development activities; the production levels; the
uncertainty of reserve estimates; the actions by governmental authorities; the
government regulations and the expenditures required to comply with them
(especially safety and environmental laws and regulations); the site restoration
costs; and other circumstances affecting revenues and expenses. The impact of
any one factor on a particular forward-looking statement is not determinable
with certainty as such factors are interdependent upon other factors, and
management's course of action would depend upon its assessment of the future
considering all information then available.

Statements relating to "reserves" are deemed to be forward-looking statements,
as they involve the implied assessment, based on certain estimates and
assumptions that the reserves described can be profitably produced in the
future.

Readers are cautioned that the foregoing list of important factors is not
exhaustive. Although the Company believes that the expectations conveyed by the
forward-looking statements are reasonable based on information available to it
on the date such forward-looking statements are made, no assurances can be given
as to future results, levels of activity and achievements. All subsequent
forward-looking statements, whether written or oral, attributable to the Company
or persons acting on its behalf are expressly qualified in their entirety by
these cautionary statements. The Company assumes no obligation to update
forward-looking statements should circumstances or management's estimates or
opinions change.


32                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

OTHER OPERATING HIGHLIGHTS

NETBACK ANALYSIS
($/boe, except daily production)
<TABLE>
<CAPTION>
                                                                     THREE MONTHS ENDED                          YEAR ENDED
                                                        ------------------------------------------    ----------------------------
                                                             DEC 31         SEP 30         DEC 31           DEC 31         DEC 31
                                                               2003           2003           2002             2003           2002
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                     <C>           <C>             <C>             <C>            <C>
Daily production (boe/d)                                    455,935        461,882        468,132          458,814        420,722
Sales price (1)                                         $     30.64   $      31.94    $     30.54     $      33.75   $      26.25
Royalties                                                      4.12           4.46           4.98             5.20           3.91
Production expense (2)                                         6.81           7.17           6.34             7.15           5.99
- ---------------------------------------------------------------------------------------------------------------------------------
NETBACK                                                       19.71          20.31          19.22            21.40          16.35
Midstream contribution(2)                                     (0.29)         (0.24)         (0.24)           (0.28)         (0.25)
Administration                                                 0.58           0.51           0.41             0.52           0.40
Interest                                                       0.79           0.83           1.22             0.94           1.03
Foreign exchange loss (gain)                                  (0.17)          0.11           0.05             0.05           0.02
Taxes other than income tax (current)                          1.02           0.64           0.35             0.69           0.35
Current income tax (North Sea)                                 0.07           0.10          (0.83)            0.14          (0.13)
Current income tax (Offshore West Africa)                      0.07           0.07           0.01             0.06           0.04
Current income tax (North America)                             0.07           0.28             --             0.26              -
Current income tax (Large corporations tax)                    0.01           0.12           0.16             0.09           0.14
- ---------------------------------------------------------------------------------------------------------------------------------
CASH FLOW                                               $     17.56   $      17.89    $     18.09     $      18.93   $      14.75
=================================================================================================================================
</TABLE>
(1)  INCLUDING FINANCIAL INSTRUMENTS AND TRANSPORTATION COSTS.

(2)  EXCLUDING INTERSEGMENT ELIMINATIONS.


CANADIAN NATURAL RESOURCES LIMITED                                            33
================================================================================

<PAGE>

<TABLE>
<CAPTION>
SEGMENTED NETBACK                                                                  YEAR ENDED DECEMBER 31, 2003
                                                                         NORTH           NORTH            OFFSHORE
                                                                       AMERICA             SEA         WEST AFRICA            TOTAL
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>              <C>             <C>                   <C>
CRUDE OIL AND NGLS
  ($/bbl, except daily production)
Daily production (bbl/d)                                               174,895          56,869              10,628          242,392
Sales price(1)                                                  $        27.77   $       42.43   $           36.47     $      31.59
Royalties                                                                 3.79           (0.03)               1.08             2.77
Production expense                                                        9.14           14.07                8.68            10.28
- ------------------------------------------------------------------------------------------------------------------------------------
Netback                                                         $        14.84   $       28.39   $           26.71     $      18.54
- ------------------------------------------------------------------------------------------------------------------------------------

NATURAL GAS
  ($/mcf, except daily production)
Daily production (mmcf/d)                                                1,245              46                   8            1,299
Sales price(1)                                                  $         6.14   $        3.03   $            4.37     $       6.02
Royalties                                                                 1.38              --                0.13             1.32
Production expense                                                        0.57            1.33                1.39             0.60
- ------------------------------------------------------------------------------------------------------------------------------------
Netback                                                         $         4.19   $        1.70   $            2.85     $       4.10
- ------------------------------------------------------------------------------------------------------------------------------------

BARRELS OF OIL EQUIVALENT
  ($/boe, except daily production)
Daily production (boe/d)                                               382,315          64,469              12,030          458,814
Sales price(1)                                                  $        32.71   $       39.61   $           35.29     $      33.75
Royalties                                                                 6.22           (0.03)               1.04             5.20
Production expense                                                        6.05           13.36                8.65             7.15
- ------------------------------------------------------------------------------------------------------------------------------------
Netback                                                         $        20.44   $       26.28   $           25.60     $      21.40
====================================================================================================================================
</TABLE>
(1)  INCLUDING FINANCIAL INSTRUMENTS AND TRANSPORTATION COSTS.


34                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                                  DECEMBER 31        DECEMBER 31
(millions of Canadian dollars, unaudited)                                2003               2002
- ------------------------------------------------------------------------------------------------
<S>                                                             <C>             <C>
ASSETS
CURRENT ASSETS
         Cash                                                   $         104   $             30
         Accounts receivable and other                                    751                745
- ------------------------------------------------------------------------------------------------
                                                                          855                775

PROPERTY, PLANT AND EQUIPMENT (net)                                    13,269             12,500
DEFERRED CHARGES                                                           74                 84
- ------------------------------------------------------------------------------------------------
                                                                $      14,198   $         13,359
================================================================================================

LIABILITIES
CURRENT LIABILITIES
         Accounts payable                                       $         464   $            337
         Accrued liabilities                                              712                428
         Current portion of long-term debt (note 3)                       184                 24
- ------------------------------------------------------------------------------------------------
                                                                        1,360                789

LONG-TERM DEBT (note 3)                                                 2,645              4,074
DEFERRED CREDITS (note 4)                                                 488                440
FUTURE INCOME TAX (note 5)                                              3,588              3,188
- ------------------------------------------------------------------------------------------------
                                                                        8,081              8,491
- ------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
PREFERRED SECURITIES                                                      103                126
SHARE CAPITAL (note 6)                                                  2,353              2,304
RETAINED EARNINGS                                                       3,644              2,414
FOREIGN CURRENCY TRANSLATION ADJUSTMENT
  (note 7)                                                                 17                 24
- ------------------------------------------------------------------------------------------------
                                                                        6,117              4,868
- ------------------------------------------------------------------------------------------------
                                                                $      14,198   $         13,359
================================================================================================
</TABLE>

COMMITMENTS (note 10)



CANADIAN NATURAL RESOURCES LIMITED                                            35
================================================================================

<PAGE>

CONSOLIDATED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                       YEAR ENDED
                                                            ---------------------------------   -----------------------------------
(millions of Canadian dollars, except per common share             DEC 31              DEC 31            DEC 31             DEC 31
amounts, unaudited)                                                  2003                2002              2003               2002
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>               <C>               <C>               <C>
REVENUE (note 2)                                            $        1,368    $         1,397   $         5,972   $          4,342
Less: royalties                                                       (173)              (214)            (872)              (600)
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                     1,195              1,183            5,100              3,742
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Production                                                             288                278            1,209                931
Transportation (note 2)                                                 68                 67              262                262
Depletion, depreciation and amortization                               405                386            1,565              1,314
Administration                                                          24                 17               87                 61
Stock-based compensation (note 6)                                       63                 --              200                 --
Interest                                                                33                 53              157                159
Foreign exchange (gain) loss                                           (87)                 2            (312)               (31)
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                       794                803            3,168              2,696
- -----------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAXES                                                  401                380            1,932              1,046
Taxes other than income tax                                             26                 21              107                 63
Current income tax (note 5)                                              9                (28)              92                  8
Future income tax (note 5)                                             118                178              339                400
- -----------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS                                                           248                209            1,394                575
Dividend on preferred securities, net of tax                            (1)                (1)             (5)                (6)
Revaluation of preferred securities, net of tax                          4                  1               18                  1
- -----------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREHOLDERS            $          251    $           209   $        1,407   $            570
===================================================================================================================================
NET EARNINGS ATTRIBUTABLE TO COMMON SHAREHOLDERS
PER COMMON SHARE (note 8)
         Basic                                              $         1.87    $          1.56   $         10.48  $           4.46
         Diluted                                            $         1.83    $          1.51   $         10.14  $           4.31
===================================================================================================================================
</TABLE>

CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
<TABLE>
<CAPTION>
                                                                                     YEAR ENDED DECEMBER 31
                                                            -----------------------------------------------------------------------
(millions of Canadian dollars, unaudited)                                                2003                                2002
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>                                   <C>
BALANCE - BEGINNING OF YEAR                                 $                           2,414     $                         1,908
Net earnings                                                                            1,394                                 575
Dividend on common shares (note 6)                                                        (81)                                (64)
Purchase of common shares (note 6)                                                        (96)                                 --
Dividend on preferred securities, net of tax                                               (5)                                 (6)
Revaluation of preferred securities, net of tax                                            18                                   1
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE - END OF YEAR                                       $                           3,644     $                         2,414
===================================================================================================================================
</TABLE>


36                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                    THREE MONTHS ENDED                       YEAR ENDED
                                                            ---------------------------------   -----------------------------------
                                                                    DEC 31             DEC 31           DEC 31             DEC 31
(millions of Canadian dollars, unaudited)                             2003               2002            2003               2002
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>               <C>                <C>             <C>
OPERATING ACTIVITIES
Net earnings                                                $            248  $           209    $       1,394   $            575
Non-cash items
         Depletion, depreciation and
         amortization                                                    405              386            1,565              1,314
         Deferred petroleum revenue tax                                  (17)               6               (9)                10
         Stock-based compensation                                         63               --              200                 --
         Future income tax                                               118              178              339                400
         Unrealized foreign exchange gain                                (81)              --             (320)               (35)
- -----------------------------------------------------------------------------------------------------------------------------------
Cash flow provided from operations                                       736              779            3,169              2,264
Deferred charges                                                           5              (26)              10                (84)
Net change in non-cash working capital                                    41             (100)             (48)              (157)
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                         782              653            3,131              2,023
- -----------------------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Repayment of bank credit facilities                                      (13)             (85)            (647)            (1,234)
Repayment of senior unsecured notes                                       --               --              (85)               (16)
Issue of US dollar debt securities                                        --               --               --              1,749
Repayment of obligations under capital leases                             (1)              (2)              (8)                (4)
Issue of common shares                                                     6               15               89                 84
Purchase of common shares                                                (21)              --             (144)                --
Dividend on common shares                                                (20)             (17)             (77)               (60)
Dividend on preferred securities                                          (2)              (2)              (9)               (10)
Net change in non-cash working capital                                    (9)              44              (11)                27
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                         (60)             (47)            (892)               536
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Business combination, net of cash acquired                                --               --               --               (843)
Expenditures on property, plant and equipment                           (663)            (295)          (2,526)            (1,752)
Net proceeds on sale of property, plant and
equipment                                                                  1                3               20                 76
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenditures on property, plant and equipment                       (662)            (292)          (2,506)            (2,519)
Net change in non-cash working capital                                    14             (299)             341                (25)
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                        (648)            (591)           (2,165)           (2,544)
- -----------------------------------------------------------------------------------------------------------------------------------
INCREASE IN CASH                                                          74               15               74                 15
CASH - BEGINNING OF PERIOD                                                30               15               30                 15
- -----------------------------------------------------------------------------------------------------------------------------------
CASH - END OF PERIOD                                        $            104  $            30    $         104   $             30
===================================================================================================================================
</TABLE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION (NOTE 11)


CANADIAN NATURAL RESOURCES LIMITED                                            37
================================================================================

<PAGE>

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (tabular amounts in millions of
Canadian dollars, unaudited)


1.       ACCOUNTING POLICIES

The interim consolidated financial statements of Canadian Natural Resources
Limited (the "Company") include the Company and all of its subsidiaries and
partnerships, and have been prepared following the same accounting policies as
the audited consolidated financial statements of the Company as at December 31,
2002, except as described in note 2. The interim consolidated financial
statements contain disclosures that are supplemental to the Company's annual
audited consolidated financial statements. Certain disclosures that are normally
required to be included in the notes to the annual audited consolidated
financial statements have been condensed. These financial statements should be
read in conjunction with the Company's audited consolidated financial statements
and notes thereto for the year ended December 31, 2002.

2.       ACCOUNTING POLICY

STOCK-BASED COMPENSATION

As a result of modifications to its Stock Option Plan (note 6) in the second
quarter 2003, the Company prospectively adopted the following accounting policy
with respect to stock-based compensation.

The Company accounts for its stock-based compensation using the intrinsic value
method. A liability for expected cash settlements under the Company's Stock
Option Plan (the "Option Plan") is accrued over the vesting period of the stock
options based on the difference between the exercise price of the stock options
and the market price of the Company's common shares. The liability is revalued
quarterly to reflect changes in the market price of the Company's common shares
and the net change is recognized in net earnings. When stock options are
surrendered for cash, the cash settlement paid reduces the outstanding
liability. When stock options are exercised for common shares under the Option
Plan, consideration paid by employees, officers or directors and the previously
recognized liability associated with the stock options is recorded as share
capital.

TRANSPORTATION

In accordance with EIC 123 of the Emerging Issues Committee of the Canadian
Institute of Chartered Accountants, transportation costs are no longer netted
against revenue but are disclosed as a separate expense in the consolidated
statements of earnings.

3.       LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                                DEC 31              DEC 31
                                                                                  2003                2002
- -----------------------------------------------------------------------------------------------------------
<S>                                                                       <C>              <C>
Bank credit facilities
  Bankers' acceptances                                                    $         --     $           728
  US dollar bankers' acceptances (2003 - US $207 million, 2002 - US
  $150 million)                                                                    268                 237
Medium-term notes                                                                  250                 250
Senior unsecured notes
  (2003 - US $258 million, 2002 - US $318 million)                                 366                 498
US dollar debt securities
  (2003 - US $1,500 million, 2002 - US $1,500 million)                           1,938               2,370
 Obligations under capital leases                                                    7                  15
- -----------------------------------------------------------------------------------------------------------
                                                                                 2,829               4,098
Less:  current portion of long-term debt                                           184                  24
- -----------------------------------------------------------------------------------------------------------
                                                                          $      2,645     $         4,074
===========================================================================================================
</TABLE>


38                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

BANK CREDIT FACILITIES

At December 31, 2003, the Company had unsecured bank credit facilities of $1,925
million comprised of a $100 million operating demand facility and a revolving
credit and term loan facility of $1,825 million. The revolving credit and term
loan facility is fully revolving for 364-day periods with an initial term to
June 2004 and a provision for extension at the mutual agreement of the Company
and the lenders. If not extended, the facility converts to a non-revolving loan
with a term of two years. The full amount of the outstanding principle would be
repayable at the end of year two following the initiation of the term period.
The facility provides that the borrowings may be made by way of operating
advances, prime loans, bankers' acceptances, US base rate loans or US dollar
LIBOR advances which bear interest at the bank's prime rates or at money market
rates plus applicable margins. During the year, the Company repaid and cancelled
a $500 million acquisition term credit facility.

In addition to the outstanding debt, letters of credit aggregating $69 million
have been issued.

MEDIUM-TERM NOTES

In August 2003, the Company filed a short form shelf prospectus that allows for
the issue of up to $1 billion of medium-term notes in Canada until September
2005. If issued, these securities will bear interest as determined at the date
of issuance.

SENIOR UNSECURED NOTES

In May 2003, the Company prepaid the US $50 million 6.50% senior unsecured notes
due May 1, 2008.

In September 2003, the Company made the final US $10 million principal repayment
on the 6.95% senior unsecured notes due September 30, 2003.

US DOLLAR DEBT SECURITIES

In May 2003, the Company filed a short form shelf prospectus that allows for the
issue of up to US $2 billion of debt securities in the United States until June
2005. If issued, these securities will bear interest as determined at the date
of issuance.

4.       DEFERRED CREDITS

                                                           DEC 31         DEC 31
                                                             2003           2002
- --------------------------------------------------------------------------------

Provision for future site restoration                  $      447    $       440
Stock-based compensation                                       41             --
- --------------------------------------------------------------------------------
                                                       $      488    $       440
================================================================================



CANADIAN NATURAL RESOURCES LIMITED                                            39
================================================================================

<PAGE>

5.       INCOME TAXES

The provision for income taxes is as follows:

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED                         YEAR ENDED
                                                       ----------------------------------   -------------------------------------
                                                                DEC 31             DEC 31              DEC 31              DEC 31
                                                                  2003               2002                2003                2002
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                <C>               <C>                 <C>
CURRENT INCOME TAX EXPENSE
   Current income tax - North America                  $             3    $            --   $              43   $              --
   Large corporations tax - North America                            1                  6                  16                  21
   Current income tax - North Sea                                    2                (35)                 23                 (19)
   Current income tax - Offshore West Africa                         3                  1                  10                   6
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                     9                (28)                 92                   8
Future income tax                                                  118                178                 339                 400
- ---------------------------------------------------------------------------------------------------------------------------------
Income taxes                                           $           127    $           150   $             431   $             408
=================================================================================================================================
</TABLE>

A significant portion of the Company's North American taxable income is
generated by partnerships. Income taxes are incurred on the partnerships'
taxable income in the year following their inclusion in the Company's
consolidated net earnings.

During 2003, the Government of Alberta passed legislation to reduce its
corporate income tax rate by 0.5% effective April 1, 2003. Also during 2003, the
Canadian federal government passed legislation to change the taxation of
resource income. The legislation reduces the corporate income tax rate on
resource income from 28% to 21% over five years beginning January 1, 2003. Over
the same period, the deduction for resource allowance is phased out and a
deduction for actual crown royalties paid is phased in. The Company's future
income tax liability was reduced by $31 million with respect to the Alberta
corporate income tax rate reduction and by $247 million with respect to the
Federal resource income tax rate changes.

6.       SHARE CAPITAL

ISSUED

<TABLE>
<CAPTION>
                                                                                              YEAR ENDED DECEMBER 31, 2003

                                                                                  NUMBER OF SHARES
COMMON SHARES                                                                           (THOUSANDS)                      AMOUNT
- --------------------------------------------------------------------------------------------------------------------------------
     <S>                                                                                    <C>            <C>
     Balance - beginning of year                                                            133,776        $              2,304
     Issued upon exercise of stock options                                                    2,690                          89
     Previously recognized liability on stock options
       exercised for common shares                                                               --                           8
     Purchase of shares under Normal Course
       Issuer Bid                                                                            (2,735)                        (48)
- --------------------------------------------------------------------------------------------------------------------------------
     Balance - end of year                                                                  133,731        $              2,353
================================================================================================================================
</TABLE>



40                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

NORMAL COURSE ISSUER BID

On January 22, 2003, the Company announced the renewal of its Normal Course
Issuer Bid through the facilities of the Toronto Stock Exchange and the New York
Stock Exchange to purchase up to 6,692,799 common shares or 5% of the
outstanding common shares of the Company on the date of announcement during the
12-month period beginning January 24, 2003 and ending January 23, 2004. As at
December 31, 2003, the Company had purchased 2,734,800 common shares for a total
cost of $144 million. The excess cost over book value of the shares purchased
was applied to reduce retained earnings.

In January 2004, the Company renewed its Normal Course Issuer Bid, allowing the
Company to purchase up to 6,690,385 common shares or 5% of the Company's
outstanding common shares on the date of announcement, during the 12-month
period beginning January 24, 2004 and ending January 23, 2005. As at February
19, 2004, the Company had not purchased any additional shares using its Normal
Course Issuer Bid.

DIVIDEND POLICY

On February 19, 2004, the Board of Directors set the regular quarterly dividend
at $0.20 per common share (2003 - $0.15 per common share). The Company pays
regular quarterly dividends in January, April, July, and October of each year.

STOCK OPTIONS
                                                 YEAR ENDED DECEMBER 31, 2003

                                                STOCK OPTIONS   WEIGHTED AVERAGE
                                                 (THOUSANDS)      EXERCISE PRICE
- --------------------------------------------------------------------------------
Outstanding - beginning of year                        12,882    $        37.13
         Granted                                          668    $        52.31
         Exercised for common shares                   (2,690)   $        33.14
         Surrendered for cash settlement               (1,337)   $        33.52
         Forfeited                                       (629)   $        42.78
- --------------------------------------------------------------------------------
Outstanding - end of year                               8,894    $        39.44
- --------------------------------------------------------------------------------
Exercisable - end of year                               2,323    $        34.65
================================================================================


MODIFICATION OF STOCK OPTION PLAN

In June 2003, the Company approved an amendment to its Option Plan providing the
stock option holder the right to elect to receive a cash payment equal to the
difference between the exercise price of the stock option and the market price
of the Company's common shares on the date of surrender, multiplied by the
number of common shares covered by the stock options surrendered, in lieu of
receiving common shares.

The modification to the Option Plan was accounted for prospectively and for the
year ended December 31, 2003, the Company recorded compensation expense of $200
million. As at December 31, 2003, the total liability for expected cash
settlements under the Option Plan is $171 million, of which $130 million is
included as a current liability. As at December 31, 2003, cash payments of $31
million had been made for 1,337,398 stock options surrendered.

Prior to the amendment, the Company disclosed pro-forma measures of net earnings
attributable to common shareholders and net earnings attributable to common
shareholders per common share as if stock options had been recognized as
compensation expense estimated on the date of grant using the Black-Scholes
option pricing model. As stock-based compensation is now reflected in the
Statement of Earnings, the pro-forma disclosures are no longer required.


CANADIAN NATURAL RESOURCES LIMITED                                            41
================================================================================

<PAGE>

7.       FOREIGN CURRENCY TRANSLATION ADJUSTMENT

The foreign currency translation adjustment represents the unrealized gain
(loss) on the Company's net investment in self-sustaining foreign operations.
The Company has designated certain US dollar denominated debt as a hedge against
its net investment in US dollar based self-sustaining foreign operations.
Accordingly, gains and losses on this debt are included in the foreign currency
translation adjustment.

<TABLE>
<CAPTION>
                                                                                                               DECEMBER 31, 2003
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                                                                   <C>
Balance - beginning of year                                                                           $                        24
Unrealized loss on translation of net investment                                                                             (108)
Hedge of net investment with US dollar denominated debt, net of tax                                                           101
- ----------------------------------------------------------------------------------------------------------------------------------
Balance - end of year                                                                                 $                        17
==================================================================================================================================
</TABLE>

8.       NET EARNINGS ATTRIBUTABLE TO COMMON SHAREHOLDERS PER COMMON SHARE

<TABLE>
<CAPTION>
                                                                  THREE MONTHS ENDED                         YEAR ENDED
                                                         ------------------------------------   ----------------------------------
WEIGHTED AVERAGE COMMON SHARES                                     DEC 31              DEC 31             DEC 31           DEC 31
  OUTSTANDING (THOUSANDS)                                            2003                2002               2003             2002
- ----------------------------------------------------------------------------------------------------------------------------------
     <S>                                                          <C>                 <C>                <C>              <C>
     Basic                                                        133,937             133,618            134,235          127,883
       Effect of dilutive stock options (1)                            --               2,036              1,222            2,744
       Assumed settlement of preferred
         securities with common shares                              1,767               2,901              1,954            2,681
- ----------------------------------------------------------------------------------------------------------------------------------
     Diluted                                                      135,704             138,555            137,411          133,308
==================================================================================================================================

Net earnings attributable to common
  shareholders                                           $            251     $           209   $          1,407   $          570
     Dividend on preferred securities, net of tax                       1                   1                  5                6
     Revaluation of preferred securities, net of tax                   (4)                 (1)               (18)             (1)
- ----------------------------------------------------------------------------------------------------------------------------------
Diluted net earnings attributable to common              $            248     $           209   $          1,394   $          575
  shareholders
==================================================================================================================================

Net earnings per common share
  attributable to common shareholders
     Basic                                               $           1.87     $          1.56   $          10.48   $         4.46
     Diluted                                             $           1.83     $          1.51   $          10.14   $         4.31
==================================================================================================================================
</TABLE>
(1)  MODIFICATION OF THE OPTION PLAN DESCRIBED IN NOTE 6 ESLTS IN A LIABILITY
     AND EXPENSE FOR ALL OUTSTANDING STOCK OPTIONS. AS SUCH, THE POTENTIAL
     COMMON SHARES ASSOCIATED WITH THE STOCK OPTIONS ARE NOT INCLUDED IN DILUTED
     EARNINGS PER SHARE EFFECTIVE FROM THE DATE OF MODIFICATION.


42                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

9.       FINANCIAL INSTRUMENTS

The Company uses certain derivative financial instruments to manage its
commodity prices, foreign currency and interest rate exposures. These financial
instruments are entered into solely for hedging purposes and are not used for
trading or other speculative purposes. The Company has the following financial
derivatives outstanding as at February 19, 2004, which includes all transactions
outstanding as at December 31, 2003:

<TABLE>
<CAPTION>
                                       REMAINING TERM                  VOLUME                   AVERAGE PRICE                  INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                 <C>                     <C>                          <C>
OIL
Brent differential
swaps                       Jan 2004 -       Dec 2004            40,000 bbl/d                        US $1.22        Dated Brent/WTI

Oil price collars           Jan 2004 -       Mar 2004           123,000 bbl/d           US $25.24 - US $30.87                    WTI
                            Apr 2004 -       Jun 2004           120,000 bbl/d           US $25.06 - US $29.84                    WTI
                            Jul 2004 -       Sep 2004           120,000 bbl/d           US $25.63 - US $30.41                    WTI
                            Oct 2004 -       Dec 2004            60,000 bbl/d           US $25.50 - US $30.32                    WTI
====================================================================================================================================


                                     REMAINING TERM                  VOLUME                   AVERAGE PRICE                   INDEX
- ------------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS
AECO collars                    Jan 2004 - Mar 2004            300,000 GJ/d              C $6.00 - C $10.14                    AECO

====================================================================================================================================
</TABLE>


<TABLE>
<CAPTION>
                                                                                                   AMOUNT                   AVERAGE
                                                                                                                      EXCHANGE RATE
                                                         REMAINING TERM                      ($ MILLIONS)                (US $/C $)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                            <C>                                           <C>                        <C>
FOREIGN CURRENCY
Currency collars                               Jan 2004 -      Aug 2004                      US $20/month               1.51 - 1.59
                                               Jan 2004 -      Sep 2004                       US $5/month               1.52 - 1.59
                                               Jan 2004 -      Dec 2004                       US $3/month               1.45 - 1.54
                                               Jan 2004 -      Aug 2005                      US $10/month               1.37 - 1.49
====================================================================================================================================
</TABLE>

<TABLE>
<CAPTION>
                                                                                     EXCHANGE        INTEREST             INTEREST
                                                                   AMOUNT                RATE            RATE                 RATE
                                       REMAINING TERM         ($ MILLIONS)          (US $/C $)          (US $)                (C $)
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                               <C>                             <C>                    <C>            <C>                   <C>
Currency swap                     Jan 2004 - Dec 2005             US $125                1.55           7.69%                 7.30%
====================================================================================================================================
</TABLE>


CANADIAN NATURAL RESOURCES LIMITED                                            43
================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                                                                         AMOUNT           FIXED
                                                           REMAINING TERM           ($ MILLIONS)           RATE        FLOATING RATE
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>                                    <C>               <C>          <C>
INTEREST RATE
Swaps - fixed to floating                        Jan 2004 -      Jul 2004               US $200           6.70%        LIBOR + 2.09%
                                                 Jan 2004 -      Jul 2006               US $200           6.70%        LIBOR + 1.58%
                                                 Jan 2004 -      Jan 2005               US $200           7.20%        LIBOR + 3.00%
                                                 Jan 2004 -      Jan 2007               US $200           7.20%        LIBOR + 2.23%
                                                 Jan 2004 -      Oct 2012               US $350           5.45%        LIBOR + 0.81%

Swaps - floating to fixed                        Jan 2004 -      Mar 2007                 C $16           7.36%               CDOR
====================================================================================================================================
</TABLE>


10.               COMMITMENTS

The Company has committed to certain payments over the next five years as
follows:

<TABLE>
<CAPTION>
                                                             2004           2005        2006        2007        2008      THEREAFTER
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>          <C>            <C>         <C>         <C>         <C>
Natural gas transportation                             $      180   $        169   $     143   $     103   $      77   $         194
Oil transportation and pipeline                        $       15   $         13   $      13   $      15   $      13   $         167
Offshore equipment operating lease                     $      169   $        129   $      75   $      75   $      75   $         367
Electricity                                            $        7   $          2   $       1   $      --   $      --   $          --
Office lease                                           $       20   $         20   $      19   $      17   $      16   $          50
Processing                                             $        6   $          5   $       2   $      --   $      --   $          --
====================================================================================================================================
</TABLE>

11.      SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                         YEAR ENDED
                                                          ------------------                     -------------------
                                                                    DEC 31              DEC 31              DEC 31            DEC 31
                                                                      2003                2002                2003              2002
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>                  <C>               <C>
Interest paid                                             $             31    $             28     $           178   $           132
Taxes paid                                                $             24    $             67     $            51   $           160
====================================================================================================================================
</TABLE>



44                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

12.      SEGMENTED INFORMATION

<TABLE>
<CAPTION>
                                                                   THREE MONTHS ENDED                         YEAR ENDED
                                                          -----------------------------------   ------------------------------------
                                                                    DEC 31             DEC 31            DEC 31            DEC 31
                                                                      2003               2002              2003              2002
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>                 <C>               <C>               <C>
REVENUE
North America                                             $          1,076    $         1,148   $         4,829   $         3,610
North Sea                                                              237                213               961               612
Offshore West Africa                                                    49                 30               156               102
Midstream                                                               16                 15                61                52
Intersegment eliminations                                              (10)                (9)              (35)              (34)
- ------------------------------------------------------------------------------------------------------------------------------------
                                                          $          1,368    $         1,397   $         5,972   $         4,342
- ------------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS
North America                                             $            216    $           177   $         1,206   $           565
North Sea                                                               16                 19               121               (1)
Offshore West Africa                                                    12                  9                44               (6)
Midstream                                                                4                  4                23                17
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                       248                209             1,394               575
Dividend on preferred securities, net of tax                            (1)                (1)               (5)              (6)
Revaluation of preferred securities, net of tax                          4                  1                18                 1
- ------------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS ATTRIBUTABLE TO COMMON
  SHAREHOLDERS                                            $            251    $           209   $         1,407   $           570
- ------------------------------------------------------------------------------------------------------------------------------------
ADDITIONS TO PROPERTY, PLANT AND
  EQUIPMENT
North America                                             $            431    $           124   $         1,769   $         1,026
North Sea                                                              106                312               363               555
Offshore West Africa                                                    46                 16               176               186
Horizon Oil Sands Project                                               52                 19               152                68
Midstream                                                                2                  6                11                20
Abandonments                                                            20                  4                40                43
Head office                                                              5                  3                20                10
- ------------------------------------------------------------------------------------------------------------------------------------
                                                          $            662    $           484   $         2,531   $         1,908
====================================================================================================================================
</TABLE>


CANADIAN NATURAL RESOURCES LIMITED                                            45
================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                                 PROPERTY, PLANT AND EQUIPMENT                         TOTAL ASSETS
                                          -------------------------------------------   --------------------------------------------
                                                        DEC 31                 DEC 31                 DEC 31                DEC 31
                                                          2003                   2002                   2003                  2002
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                                       <C>                    <C>                    <C>                    <C>
SEGMENTED ASSETS
North America                             $             10,841   $             10,252   $             11,582   $            10,917
North Sea                                                1,157                  1,277                  1,282                 1,427
Offshore West Africa                                       651                    518                    687                   549
Horizon Oil Sands Project                                  381                    229                    381                   229
Midstream                                                  200                    196                    227                   209
Head office                                                 39                     28                     39                    28
- ------------------------------------------------------------------------------------------------------------------------------------
                                          $             13,269   $             12,500   $             14,198   $            13,359
====================================================================================================================================
</TABLE>


13.      SUBSEQUENT EVENT

On February 18, 2004 the Company acquired certain resource properties located in
East Central Alberta and Saskatchewan (collectively known as the Petrovera
Partnership) for aggregate consideration of $701 million. In a separate
transaction, the Company sold specific resource properties in the Petrovera
Partnership, representing approximately one third of the total acquisition, to
another independent producer for proceeds of $234 million, resulting in a net
cost of $467 million for the retained properties. The net current production
from the working interests retained by the Company is approximately 27.5 mbbl/d
of heavy oil and 9 mmcf/d of natural gas together with volumes associated with
royalty interests of 1.2 mbbl/d of heavy oil and 2 mmcf/d of natural gas.



46                                            CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

SUPPLEMENTARY INFORMATION


INTEREST COVERAGE RATIOS

The following financial ratios are provided in connection with the Company's
continuous offering of medium-term notes pursuant to the short form prospectus
dated August 2003. These ratios are based on the Company's consolidated
financial statements that are prepared in accordance with accounting principles
generally accepted in Canada.

Interest coverage ratios for the 12-month period ended December 31, 2003:
  Interest coverage (times)
     Net earnings                                                       12.6 (1)
     Cash flow from operations attributable to common shareholders      21.7 (2)
================================================================================
(1)  NET EARNINGS PLUS INCOME TAXES AND INTEREST EXPENSE; DIVIDED BY INTEREST
     EXPENSE.

(2)  CASH FLOW FROM OPERATIONS ATTRIBUTABLE TO COMMON SHAREHOLDERS PLUS CURRENT
     INCOME TAXES AND INTEREST EXPENSE; DIVIDED BY INTEREST EXPENSE.


The interest coverage ratios have been calculated without including the annual
carrying charges relating to the outstanding preferred securities of the
Company. If the preferred securities were classified as long-term debt, these
annual carrying charges would be included in interest and the net earnings
coverage ratio for the 12-month period ended December 31, 2003 would be 12.0x
and the cash flow coverage ratio for the 12-month period ended December 31, 2003
would be 20.5x.

CONFERENCE CALL

A conference call will be held at 9:00 a.m. Mountain Standard Time, 11:00 a.m.
Eastern Standard Time, on Wednesday, February 25, 2004. The North American
conference call number is 1-800-377-5794 and the outside North America
conference call number is 1-416-641-6681. Please call in about 10 minutes before
the starting time in order to be patched into the call. Should you experience
any difficulty in connecting to the call, those in North America please call
1-800-473-0602; and for those outside North America, please call 1-905-502-3723.
The conference call will also be broadcast live on the internet and may be
accessed through the Canadian Natural Resources website at WWW.CNRL.COM.

A taped rebroadcast will be available until 11:00 p.m. Mountain Standard Time on
Wednesday, March 3, 2004. To access the postview in North America, dial
1-800-558-5253 and enter the passcode 21176715. Those outside North America,
dial 1-416-626-4100 and enter the passcode 21176715.

WEBCAST

This call is being webcast by Vcall and can be accessed on Canadian Natural's
website at www.cnrl.com/investor/calendar.htm.
The webcast is also being distributed over PrecisionIR's Investor Distribution
Network to both institutional and individual investors. Investors can listen to
the call through www.vcall.com or by visiting any of the investor sites in
PrecisionIR's Individual Investor Network.

2004 FIRST QUARTER RESULTS

2004 first quarter results are scheduled for release on Wednesday, May 5, 2004.
A conference call will be held on that day at 9:00 a.m. Mountain Daylight Time,
11:00 a.m. Eastern Daylight Time.

ANNUAL GENERAL MEETING

Canadian Natural Resources Limited's Annual and Special Meeting of the
Shareholders will be held on Thursday, May 6, 2004 at 3:00 p.m. Mountain
Daylight Time in Macleod Hall A, of the Telus Convention Centre, Calgary,
Alberta. All shareholders are invited to attend.


CANADIAN NATURAL RESOURCES LIMITED                                            47
================================================================================

<PAGE>

For further information, please contact:

                    CANADIAN NATURAL RESOURCES LIMITED 2500,
                              855 - 2nd Street S.W.
                                Calgary, Alberta
                                     T2P 4J8

        TELEPHONE:  (403) 514-7777                       ALLAN P. MARKIN
                                                                Chairman

        FACSIMILE:  (403) 517-7370                      JOHN G. LANGILLE
        EMAIL:      INVESTOR.RELATIONS@CNRL.COM                President
        WEBSITE:    WWW.CNRL.COM
                                                           STEVE W. LAUT
                                                 Chief Operating Officer
        TRADING SYMBOL - CNQ
        Toronto Stock Exchange                           COREY B. BIEBER
        New York Stock Exchange                                 Director
                                                      Investor Relations







48                                            CANADIAN NATURAL RESOURCES LIMITED
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