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<SEC-DOCUMENT>0000950142-08-000583.txt : 20080310
<SEC-HEADER>0000950142-08-000583.hdr.sgml : 20080310
<ACCEPTANCE-DATETIME>20080307175428
ACCESSION NUMBER:		0000950142-08-000583
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080228
FILED AS OF DATE:		20080310
DATE AS OF CHANGE:		20080307

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
		STATE OF INCORPORATION:			A0
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	333-12138
		FILM NUMBER:		08675379

	BUSINESS ADDRESS:	
		STREET 1:		2500, 855-2 STREET SW
		CITY:			CALGARY ALBERTA CANADA
		STATE:			A0
		ZIP:			T2P 4J8
		BUSINESS PHONE:		403-517-6700

	MAIL ADDRESS:	
		STREET 1:		2500, 855-2 STREET SW
		CITY:			CALGARY ALBERTA CANADA
		STATE:			A0
		ZIP:			T2P 4J8
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6k_q407.htm
<DESCRIPTION>REPORT OF FOREIGN PRIVATE ISSUER
<TEXT>
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            <div style=" border:none;border-bottom:solid .25em;padding:0in 0in 1.0pt 0in">
            <p>&nbsp;</p></div></div><BR>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>UNITED STATES</font></B></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SECURITIES AND EXCHANGE COMMISSION</font></B></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Washington, D.C. 20549</font></b></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=3>FORM 6-K</font></B></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>REPORT OF FOREIGN PRIVATE ISSUER</font></B></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Pursuant to section 13a-16 or 15d-16 of the</font></b></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><b><font size=2>Securities Exchange Act of 1934</font></b></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Press Releases February, 2008</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:center;'><font size=2>Commission File Number: 1-8795</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


            <table width="600" border="0" cellspacing=0 cellpadding=0 style='border-collapse:collapse'>
                <tr >
                    <td width="576" valign=top style='padding:0in 6.0pt 0in 6.0pt;border-color:gray'>
                        <p style='margin:0in;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:.0001pt'><B><font SIZE=4>CANADIAN NATURAL RESOURCES LIMTED</font></B></p> </td> </tr>
                <tr >
                    <td width="576" valign=top style='padding:0in 6.0pt 0in 6.0pt'>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Exact name of registrant as specified in its charter)</font></p> </td> </tr>
                <tr >
                    <td width="576" valign=top style='padding:0in 6.0pt 0in 6.0pt'>
                        <p style='margin:0in;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:.0001pt'><font size=1>&nbsp;</font></p> </td> </tr>
                <tr >
                    <td width="576" valign=top style='padding:0in 6.0pt 0in 6.0pt'>
                        <p style='margin:0in;text-indent:0pt;text-align:center;margin-top:12pt;margin-bottom:.0001pt'><b><font size=2>2500, 855 &#150; 2nd Street S.W.,</font></b><br> <b><font size=2>Calgary, Alberta, Canada T2P 4J8</font></b></p> </td> </tr>
                <tr >
                    <td width="576" valign=top style='padding:0in 6.0pt 0in 6.0pt'>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=2>(Address of principal executive offices)</font></p>
            <p style='margin-left:0pt;text-indent:0pt;text-align:center;margin-top:0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td> </tr></table>

            <p style=' margin-bottom:6pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.</font></p>


            <table border="0" cellspacing=0 cellpadding=0 width="287" style='margin-left:100.4pt;border-collapse:collapse'>
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                    <td width="161" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form 20-F&nbsp;&nbsp;&nbsp;&nbsp;[_]</font></p> </td>
                    <td width="125" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Form 40-F&nbsp;&nbsp;</font><font face=Wingdings>x</font></p> </td> </tr></table>

            <p style=' margin-bottom:6pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>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). ____</font></p>

            <p style=' margin-bottom:10pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>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.</font></p>

            <p style=' margin-bottom:10pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>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): ____ </font></p>

            <p style=' margin-bottom:10pt; margin-top:0pt; text-indent:0.5in;text-align:justify;'><font size=2>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. </font></p>

            <p style=' margin-bottom:10pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>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.</font></p>


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                    <td width="161" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:.75in;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>Yes&nbsp;&nbsp;&nbsp;&nbsp;[_]</font></p> </td>
                    <td width="125" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:43.5pt;text-align:left;margin-top:0pt;margin-bottom:0pt'><font size=2>No&nbsp;&nbsp;</font><font face=Wingdings>x</font></p> </td> </tr></table>

            <p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-______</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

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            <div style="border:none;border-bottom:solid .05em;padding:0in 0in 1.0pt 0in">
            <p>&nbsp;</p></div></div><BR>


            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
            <br>
            <p style='page-break-before:always'></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><b><font size=2>Exhibit</font></b><br> <u><b><font size=2>Number</font></b><font size=2>&nbsp;&nbsp;</font></u></p> </td>
                    <td width="400" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><br> <u><b><font size=2>Description</font></b></u><u></u></p> </td> </tr>
                <tr >
                    <td width="134" valign=top style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:12.0pt;text-align:left;margin-top:0pt;margin-bottom:12pt'><font size=2>99.1</font></p> </td>
                    <td width="400" style='padding:0in 5.4pt 0in 5.4pt'>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><i><b><font size=2>Press Release Dated February 28, 2008</font></b></i><br> <font size=2>Canadian Natural Resources Limited Announces 2007 Fourth Quarter and Year End Results</font></p>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>&nbsp;</font></p>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><i><b><font size=2>Press Release Dated February 28, 2008</font></b></i><br> <font size=2>Canadian Natural Resources Limited Announces Dividend</font></p>
            <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=2>&nbsp;</font></p>
            <p
            style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0pt;margin-bottom:0in'><font size=1>&nbsp;</font></p> </td> </tr></table>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:justify;'><font size=2>&nbsp;</font></p>


            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>
            <br>
            <HR noshade align="center" width="100%" size="2">
            <p style='page-break-before:always'></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:12pt; margin-top:0pt;text-align:center;'><B><font SIZE=2>SIGNATURE</font></B></p>

            <p style=' margin-bottom:12pt; margin-top:0pt; text-indent:0.5in;text-align:left;'><font size=2>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.</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


            <table border="0" cellspacing=0 cellpadding=0 width="624" style='margin-left:0pt;border-collapse:collapse'>
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                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
                    <td width="19" valign=bottom >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
                    <td colspan="2" valign=bottom >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><B><font SIZE=2>CANADIAN NATURAL RESOURCES LIMTED</font></B><br> <font size=2>(Registrant)</font></p> </td> </tr>
                <tr style='page-break-inside:avoid'>
                    <td width="273" valign=bottom >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><br> <font size=2>Dated:  February 28, 2008</font></p> </td>
                    <td width="19" valign=bottom >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
                    <td width="27" valign=bottom >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:1.0pt;margin-bottom:0pt'><font size=2>By:&nbsp;</font></p> </td>
                    <td width="305" valign=bottom style='border-bottom: solid black 1.0pt; '>
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><br> <br> <br> <font size=2>/s/ B.E. McGrath</font></p> </td> </tr>
                <tr style='page-break-inside:avoid'>
                    <td width="273" valign=top >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'>  </p> </td>
                    <td width="19" valign=top >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
                    <td width="27" valign=top >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=1>&nbsp;</font></p> </td>
                    <td width="305" valign=top >
                        <p style='margin-left:0pt;text-indent:0pt;text-align:left;margin-top:0in;margin-bottom:0pt'><font size=2>B.E. McGRATH</font><br> <font size=2>Corporate Secretary</font></p> </td> </tr></table>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>

            <p style=' margin-bottom:0pt; margin-top:0pt;text-align:left;'><font size=2>&nbsp;</font></p>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>ex99-1form6k_q407.txt
<DESCRIPTION>EXHIBIT 99.1
<TEXT>
                                                                   EXHIBIT 99.1
                                                                   ------------

[GRAPHIC OMITTED]

                  CANADIAN NATURAL RESOURCES LIMITED ANNOUNCES
                    2007 FOURTH QUARTER AND YEAR END RESULTS
         CALGARY, ALBERTA -- FEBRUARY 28, 2008 -- FOR IMMEDIATE RELEASE

Commenting on the Fourth Quarter of 2007 and year end results, Canadian Natural
Chairman,  Allan  Markin  stated,  "Another  solid year of value  creation  was
achieved in 2007  reflecting  a strong,  well-balanced  asset  base.  Our North
American and International  conventional assets provide balance between natural
gas  and  crude  oil,  a  solid  foundation  for  future  growth  and  generate
significant  free cash flow.  The  Horizon  Project,  our world class oil sands
project,  is targeted to produce first oil in Q3/08,  creating tremendous value
for shareholders. We continue to have a direct and indirect, positive impact on
the  communities in which we operate and remain  committed to working  together
with stakeholders in these communities.  This is even more important in today's
challenging environment of cost pressures,  commodity price volatility and ever
changing governmental regulation."

John Langille, Vice Chairman,  stated, "Our balance sheet ended the year at 45%
debt to book capitalization compared with 51% one year ago and we will continue
to strengthen our balance sheet during 2008 and into 2009,  creating additional
flexibility to take advantage of opportunities as they arise.  Based upon strip
pricing and production  guidance,  we estimate that 2008 cash flow may approach
$6.0 billion, resulting in a targeted 2008 year end debt to book capitalization
of  approximately  40%, even after the announced  upward  revisions to our 2008
capital cost guidance for the Horizon Project.  We have the financial  strength
and the  ability to execute  on the growth  opportunities  which we have in the
near, medium and long-term."

Steve  Laut,   President  and  Chief  Operating  Officer  of  Canadian  Natural
commented,  "In 2007 we  effectively  executed  on our  program  and  delivered
results at or exceeding our budget at reasonable  costs. Our proved finding and
on-stream  costs of $14.28  per  barrel  of oil  equivalent,  represents  a 12%
decrease from 2006. Looking forward, 2008 is the year of execution for Canadian
Natural as we deliver four major projects. First, Primrose East, the next stage
in the development of our expansive thermal in-situ assets, will begin steaming
in late 2008 and is targeted to add  approximately  40,000 bbl/d of capacity in
2009.  Secondly,  the Olowi  project in  Offshore  Gabon is  targeted  to start
producing  first  oil in late 2008 and will  reach  peak  production  of 20,000
bbl/d.  Thirdly, the deep water drilling rig for our Baobab project in Offshore
Cote d'Ivoire is expected to arrive in mid-year  2008. It is  anticipated  that
the resulting  repairs to at least three of the five shut-in Baobab wells, will
add up to 10,000  bbl/d of capacity by mid 2009.  Lastly,  we are  targeting to
have first oil at the  Horizon  Project,  our  110,000  bbl/d oil sands  mining
project in Q3/08.  Again, 2008 is the year of execution and 2009 is the year of
reward."


  CANADIAN NATURAL RESOURCES LIMITED                                         1
================================================================================
<PAGE>

<TABLE>
<CAPTION>
HIGHLIGHTS
                                                                        Quarterly Results                       Year End Results
                                                 |-------------|                                    |-------------|
($ millions, except as noted)                    |       Q4/07 |           Q3/07            Q4/06   |        2007 |            2006
- -------------------------------------------------|-------------|------------------------------------|-------------|----------------
<S>                                   <C>         <C>               <C>              <C>              <C>               <C>
Net earnings                                      $        798      $        700     $        313     $     2,608       $     2,524
      per common share, basic and diluted         $       1.48      $       1.30     $       0.58     $      4.84       $      4.70
Adjusted net earnings from operations (1)         $        546      $        644     $        412     $     2,406       $     1,664
      per common share, basic and diluted         $       1.02      $       1.19     $       0.77     $      4.46       $      3.10
Cash flow from operations (2)                     $      1,486      $      1,577     $      1,293     $     6,198       $     4,932
      per common share, basic and diluted         $       2.75      $       2.92     $       2.41     $     11.49       $      9.18
Capital expenditures, net of dispositions         $      1,514      $      1,442     $      6,497     $     6,425       $    12,025

Daily production, before royalties
      Natural gas (mmcf/d)                               1,589             1,647            1,620           1,668             1,492
      Crude oil and NGLs (bbl/d)                       337,240           333,062          343,705         331,232           331,998
      Equivalent production (boe/d)                    601,908           607,484          613,764         609,206           580,724
===================================================================================================================================
</TABLE>
(1)  ADJUSTED  NET  EARNINGS  FROM  OPERATIONS  IS A NON-GAAP  MEASURE THAT THE
     COMPANY UTILIZES TO EVALUATE ITS PERFORMANCE.  THE DERIVATION OF THIS ITEM
     IS DISCUSSED IN THE MANAGEMENT'S DISCUSSION AND ANALYSIS ("MD&A").
(2)  CASH FLOW FROM OPERATIONS IS A NON-GAAP MEASURE THAT THE COMPANY CONSIDERS
     KEY AS IT DEMONSTRATES THE COMPANY'S ABILITY TO FUND CAPITAL  REINVESTMENT
     AND DEBT  REPAYMENT.  THE  DERIVATION  OF THIS MEASURE IS DISCUSSED IN THE
     MD&A.

ANNUAL

o    Total natural gas production in 2007 averaged 1,668 mmcf/d, an increase of
     12%  from  2006,  primarily  due to a full  year of  production  from  the
     Anadarko   Canada   Corporation   acquisition  in  November  of  2006.  As
     anticipated,  2007 entry to exit natural gas production  volumes  declined
     but the assets continued to perform well.

o    Total crude oil and NGLs  production in 2007  averaged  331,232  bbl/d,  a
     slight decrease from 2006.  North America grew 5%, offset by a decrease in
     production from the International operations.

o    Cash flow from operations  increased 26% to $6.2 billion in 2007 from $4.9
     billion in 2006,  and net  earnings  increased  3% in 2007 to $2.6 billion
     from  $2.5  billion  in 2006.  Cash  flow was  primarily  impacted  due to
     increased sales volumes,  higher realized pricing, and lower realized risk
     management losses, offset by increased production expense, higher interest
     costs,  higher  current  taxes,  and the impact of the  stronger  Canadian
     dollar relative to the US dollar.

FOURTH QUARTER

o    Natural gas production for Q4/07 averaged 1,589 mmcf/d, down 2% from 1,620
     mmcf/d for Q4/06 and down 4% from 1,647 mmcf/d for Q3/07. Volumes in Q4/07
     reflected  the continued  reallocation  of capital  towards  higher return
     projects in crude oil.

o    Total crude oil and NGLs  production  for Q4/07 was 337,240  bbl/d.  Q4/07
     production was 2% lower than Q4/06 volumes of 343,705 bbl/d, and increased
     from  Q3/07  volumes  of  333,062  bbl/d.  Volumes  in Q4/07  reflect  the
     transition from steam cycles to production  cycles for a number of thermal
     wells and continued  conversion of production  wells to polymer  injection
     wells at Pelican Lake.

o    Quarterly cash flow from  operations was $1.5 billion,  an increase of 15%
     from  Q4/06 and a  decrease  of 6% from  Q3/07.  The  increase  from Q4/06
     primarily reflected higher crude oil realizations and the impact of higher
     sales volumes. The decrease from Q3/07 represented lower natural gas sales
     volumes in Q4/07 and higher  risk  management  losses.  Cash flow in Q4/07
     continued to be negatively  impacted by the  strengthening of the Canadian


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

     dollar compared to the US dollar.  The average exchange rate for Q4/07 was
     US$0.9810  per C$1.00  compared  with  US$1.0455  per C$1.00 for Q3/07 and
     US$1.1388 per C$1.00 for Q4/06.

o    Q4/07 quarterly net earnings were $798 million, a 155% increase from Q4/06
     and a 14%  increase  from Q3/07.  Quarterly  adjusted  net  earnings  from
     operations  for Q4/07 were $546  million,  a 33% increase from Q4/06 and a
     decrease of 15% from Q3/07 results.

o    Completed the Q4/07 North America drilling program targeting 172 net crude
     oil wells and 92 net  natural  gas wells  with a 94%  success  rate in the
     quarter,  excluding stratigraphic test and service wells. The success rate
     is a reflection of Canadian Natural's strong, predictable,  low-risk asset
     base.

OPERATIONAL AND FINANCIAL

o    Maintained a strong  undeveloped  conventional core land base in Canada of
     12 million net acres - a key asset for continued value growth.

o    Continued production  improvements at the Pelican Lake Field were realized
     from new  drilling  activity and the  expansion of the enhanced  crude oil
     recovery program. Pelican Lake crude oil production averaged approximately
     36,000 bbl/d during the quarter,  up 24% or approximately 7,000 bbl/d from
     Q4/06.

o    The  Primrose  East  expansion,  which is targeted to add 40,000  bbl/d of
     capacity,  made significant progress and is targeted for first steaming in
     Q4/08 and production in 2009.

o    Secured a deep water  drilling rig for the Baobab Field.  The equipment is
     targeted to be mobilized in mid-year  2008,  enabling work to begin on the
     restoration of shut-in  production.  It is forecasted  that a minimum 3 of
     the 5 shut-in  Baobab  wells should come back on stream over the course of
     2008 and 2009.

o    The Olowi  project in  Offshore  Gabon  continues  on track.  Drilling  is
     targeted to  commence  in Q2/08 and first  crude oil is targeted  for late
     2008.

o    Work progress on the Horizon Oil Sands Project ("Horizon  Project") exited
     Q4/07 at 90%  complete  and  remains on track for first oil  targeted  for
     Q3/08.

o    Independent  qualified reserve evaluators  evaluated 100% of the Company's
     conventional  crude oil and natural gas reserves under constant prices and
     costs as at December 31, 2007:

          -    Total net proved  reserves from  conventional  operations at the
               end of 2007  amounted  to 1.4  billion  barrels of crude oil and
               NGLs and 3.7  trillion  cubic  feet of  natural  gas.  Total net
               proved  conventional  reserves  increased  modestly from 2006 to
               2007.

          -    Net  proved  reserve  additions  from  conventional   operations
               equaled 110% of 2007 net production,  at a finding and on-stream
               cost of $14.28  per  barrel  of oil  equivalent.  The  Company's
               three-year  average  proved  finding  and  on-stream  costs were
               $15.07 per barrel of oil equivalent.

          -    Total  net  proved  and  probable   reserves  from  conventional
               operations at the end of 2007 amounted to 2.1 billion barrels of
               crude oil and NGLs and 4.8  trillion  cubic feet of natural gas.
               Total  proved and probable net  conventional  reserves  remained
               relatively unchanged from the prior year.

          -    Net proved and  probable  reserve  additions  from  conventional
               operations equaled 87% of 2007 net production,  at a finding and
               on-stream  cost of  $18.02  per  barrel of oil  equivalent.  The
               Company's three-year average net proved and probable finding and
               on-stream  costs were  $11.03 per barrel of oil  equivalent.  As
               anticipated,  the significantly reduced drilling program in 2007
               resulted in less proved and probable reserves being booked.

          -    Using net  proved  finding  and  on-stream  costs,  the  Company
               achieved an overall recycle ratio of 2.3x during 2007.

o    Independent  qualified reserve evaluators  evaluated 100% of the Company's
     Phase 1 to Phase 3 oil sands mining reserves for the Horizon Project under
     constant  prices as at December  31, 2007,  which  resulted in 2.4 billion
     barrels of gross lease proved bitumen  reserves and 3.5 billion barrels of
     gross lease proved and probable bitumen  reserves.  The gross lease proved
     synthetic  crude oil reserves  increased by 90 million  barrels in 2007 to
     2.0 billion barrels.  The gross lease proved and probable  synthetic crude
     oil reserves were 3.0 billion barrels.


  CANADIAN NATURAL RESOURCES LIMITED                                         3
================================================================================
<PAGE>

o    On October 25, 2007 the  Province of Alberta  issued the  framework of its
     proposed  changes to the Alberta crude oil and natural gas royalty regime,
     effective January 1, 2009. The Company is currently awaiting  finalization
     of the royalty  implementation  regulations,  however it expects  that its
     2009 and future Alberta royalty  payments will increase as a result of the
     proposed  royalty  changes  and that its level of  activity  in Alberta in
     aggregate  will be reduced from what it  otherwise  would have been in the
     absence of such royalty changes.

o    In December 2007, the Company issued $400 million of unsecured notes under
     a Canadian base shelf prospectus  maturing December 2010, bearing interest
     at 5.50%.  In  January  2008,  the  Company  issued  US$1,200  million  of
     unsecured  notes  under a US base shelf  prospectus,  comprised  of US$400
     million of 5.15%  unsecured  notes due February  2013,  US$400  million of
     5.90%  unsecured  notes due  February  2018,  and US$400  million of 6.75%
     unsecured notes due February 2039 which have been sold to investors in the
     United  States.  Net  proceeds  from the issue of these notes were used to
     repay bankers' acceptances.

o    For the eighth consecutive year the Company's dividend was increased.  The
     2008 quarterly cash dividend on common shares has been increased to C$0.10
     per common  share,  payable  April 1, 2008,  an 18% increase over the 2007
     quarterly dividend.




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

OPERATIONS REVIEW AND CAPITAL ALLOCATION

In order to  facilitate  efficient  operations,  Canadian  Natural  focuses its
activities   in  core  regions   where  it  can  dominate  the  land  base  and
infrastructure.  Undeveloped  land is critical to the Company's  ongoing growth
and development  within these core regions.  Land inventories are maintained to
enable  continuous  exploitation of play types and geological  trends,  greatly
reducing overall exploration risk. By dominating infrastructure, the Company is
able to maximize utilization of its production  facilities,  thereby increasing
control over production  costs.  Further,  the Company  maintains large project
inventories  and production  diversification  among each of the  commodities it
produces;  namely  natural  gas,  light/medium  and heavy crude oil and NGLs. A
large diversified project portfolio enables the effective allocation of capital
to higher return opportunities.

<TABLE>
<CAPTION>
OPERATIONS REVIEW

ACTIVITY BY CORE REGION
                                            |--------------------------|       |--------------------|
                                            |     NET UNDEVELOPED LAND |       | DRILLING ACTIVITY  |
                                            |                    AS AT |       |        YEAR ENDED  |
                                            |             DEC 31, 2007 |       |      DEC 31, 2007  |
                                            | (THOUSANDS OF NET ACRES) |       |   (NET WELLS) (1)  |
- --------------------------------------------|--------------------------|-------|--------------------|
<S>                                                             <C>                         <C>
Canadian conventional
     Northeast British Columbia                                  2,401                         61
     Northwest Alberta                                           1,489                        126
     Northern Plains                                             6,626                        636
     Southern Plains                                               925                        169
     Southeast Saskatchewan                                        121                         28
     In-situ Oil Sands                                             483                        192
- --------------------------------------------------------------------------------------------------
                                                                12,045                      1,212
Horizon Oil Sands Project                                          115                         98
United Kingdom North Sea                                           287                          7
Offshore West Africa                                               206                          5
- --------------------------------------------------------------------------------------------------
                                                                12,653                      1,322
==================================================================================================
</TABLE>
(1)  DRILLING ACTIVITY INCLUDES STRATIGRAPHIC TEST AND SERVICE WELLS

<TABLE>
<CAPTION>
DRILLING ACTIVITY (NUMBER OF WELLS)

                                                                                     Year Ended Dec 31
                                                                  |--------------------|
                                                                  |         2007       |                2006
                                                                  |  GROSS         NET |         GROSS          NET
- ------------------------------------------------------------------|--------------------|---------------------------
<S>                                                                  <C>         <C>             <C>          <C>
Crude oil                                                              655         592             666          603
Natural gas                                                            478         383             855          641
Dry                                                                    107          93             133          119
- -------------------------------------------------------------------------------------------------------------------
Subtotal                                                             1,240       1,068           1,654        1,363
Stratigraphic test / service wells                                     256         254             376          375
- -------------------------------------------------------------------------------------------------------------------
Total                                                                1,496       1,322           2,030        1,738
- -------------------------------------------------------------------------------------------------------------------
    Success rate (excluding stratigraphic test / service wells)                    91%                          91%
===================================================================================================================
</TABLE>


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

NORTH AMERICA CONVENTIONAL

NORTH AMERICA NATURAL GAS

<TABLE>
<CAPTION>
                                                      Quarterly Results          Year End Results
                                         |--------|                           |--------|
                                         |  Q4/07 |     Q3/07       Q4/06     |   2007 |      2006
- -----------------------------------------|--------|---------------------------|--------|-----------
<S>                                         <C>         <C>         <C>          <C>         <C>
Natural gas production (mmcf/d)             1,562       1,622       1,594        1,643       1,468
- ---------------------------------------------------------------------------------------------------

Net wells targeting natural gas                92         106          74          450         732
Net successful wells drilled                   80          96          60          383         641
- ---------------------------------------------------------------------------------------------------
    Success rate                              87%         91%         81%          85%         88%
===================================================================================================
</TABLE>
o    Natural gas annual average production increased 12% in 2007 as compared to
     2006 primarily due to a full year of production  from the Anadarko  Canada
     Corporation acquisition in November of 2006.

o    Natural gas  drilling in 2007 was down 39% from 2006.  This  reflects  the
     strategic  decision to reduce the natural  gas  development  due to a high
     cost  environment and the reallocation of capital to stronger return crude
     oil projects.

o    As  anticipated,  Q4/07 North  America  natural gas  production  decreased
     slightly by 2% from Q4/06 and  decreased  by 4% from Q3/07.  The  decrease
     reflected the Company's strategic decision to scale back the 2007 drilling
     program due to  reallocating  capital to higher  return crude oil projects
     and natural decline rates.

o    Canadian  Natural  targeted 92 net natural gas wells in Q4/07  including 7
     wells in the Northern  Plains  region,  20 wells in the Northwest  Alberta
     region,  59  wells  in the  Southern  Plains  region  and 6  wells  in the
     Northeast British Columbia region, with an overall success rate of 87%.

o    Planned  drilling  activity for Q1/08  includes  173 targeted  natural gas
     wells compared to 245 in Q1/07.


NORTH AMERICA CRUDE OIL AND NGLS

<TABLE>
<CAPTION>
                                                      Quarterly Results            Year End Results
                                          |---------|                          |---------|
                                          |   Q4/07 |     Q3/07       Q4/06    |    2007 |      2006
- ------------------------------------------|---------|--------------------------|---------|-----------
<S>                                         <C>         <C>         <C>          <C>         <C>
Crude oil and NGLs production (bbl/d)       256,843     252,095     249,565      246,779     235,253
- ----------------------------------------------------------------------------------------------------

Net wells targeting crude oil                   172         153         188          610         619
Net successful wells drilled                    168         150         174          584         591
- ----------------------------------------------------------------------------------------------------
    Success rate                                98%         98%         93%          96%         95%
====================================================================================================
</TABLE>

o    2007  production  increased 5% from 2006 to 246,779 bbl/d due to increased
     production  from  Pelican  Lake,  conventional  heavy crude oil, and light
     crude oil.

o    Q4/07 North America crude oil and NGLs production  increased 3% from Q4/06
     and  increased  2% over Q3/07  levels.  The  majority  of the  incremental
     production  volume was  contributed  by thermal crude oil and Pelican Lake
     crude  oil.  The  issues in Q3/07 at  Primrose  as a result  of  lightning
     strikes and water  treatment  have been  resolved  and thermal  production
     recovered as expected in Q4/07.

o    The Primrose East Expansion, a new facility located 15 kilometers from the
     existing  Primrose South steam plant and 25 kilometers  from the Wolf Lake
     central processing facility, is targeted to add approximately 40,000 bbl/d
     of crude oil. The Primrose  East  Expansion  received  Board of Directors'
     sanction in 2006 and the Alberta  Energy and  Utilities  Board  regulatory
     approval  in the first  quarter of 2007.  Drilling  and  construction  are
     currently  underway,  and  production  is  targeted  to  commence in 2009.
     Primrose  East is the  second  phase  of the  300,000  bbl/d  conventional
     expansion  plan  identified  to unlock the value from  Canadian  Natural's
     thermal crude oil resource base.


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

o    In early 2007,  Canadian Natural announced its proposed third phase of the
     thermal  growth plan with a  development  plan for the 45,000  bbl/d Kirby
     In-Situ Oil Sands Project located  approximately 85 km northeast of Lac La
     Biche in the Regional  Municipality of Wood Buffalo. The Company has filed
     its formal  regulatory  application  documents for this project as part of
     the Company's normal course of business.

o    Development  of new pads and  secondary  recovery  conversion  projects at
     Pelican Lake continued as expected throughout Q4/07. The response from the
     polymer flood  project  continues to be positive and the Company is moving
     forward on converting  regions currently under waterflood to polymer flood
     and  expanding  the polymer  flood to new areas.  Pelican Lake  production
     averaged  approximately  36,000 bbl/d for Q4/07 compared to  approximately
     29,000 bbl/d for Q4/06.

o    Conventional  heavy crude oil  production  volumes  decreased  slightly in
     Q4/07  compared to Q3/07,  reflecting  earlier than  expected  declines in
     certain older fields.

o    During Q4/07, drilling activity targeted 172 net wells including 102 wells
     targeting heavy crude oil, 18 wells  targeting  Pelican Lake crude oil, 11
     wells targeting thermal crude oil and 41 wells targeting light crude oil.

o    Planned  drilling  activity  for Q1/08  includes  175 net crude oil wells,
     excluding stratigraphic test and service wells.

INTERNATIONAL

<TABLE>
<CAPTION>
                                                      Quarterly Results          Year End Results
                                         |---------|                          |---------|
                                         |   Q4/07 |     Q3/07       Q4/06    |    2007 |      2006
- -----------------------------------------|---------|--------------------------|---------|-----------
<S>                                         <C>         <C>         <C>          <C>         <C>
Crude oil production (bbl/d)
           North Sea                        52,709      52,013      61,786       55,933      60,056
           Offshore West Africa             27,688      28,954      32,354       28,520      36,689
- ---------------------------------------------------------------------------------------------------
Natural gas production (mmcf/d)
           North Sea                            13          10          16           13          15
           Offshore West Africa                 14          15          10           12           9
- ---------------------------------------------------------------------------------------------------
Net wells targeting crude oil                  0.6         2.2         2.3          7.8        11.5
Net successful wells drilled                   0.6         2.2         2.3          7.8        11.5
- ---------------------------------------------------------------------------------------------------
           Success rate                       100%        100%        100%         100%        100%
===================================================================================================
</TABLE>

NORTH SEA

o    Crude  oil  production  was  down 7% in 2007 to  55,933  bbl/d  from  2006
     production   of  60,056  bbl/d   primarily  due  to  lower  than  expected
     performance  from the  development  of the Lyell and  Columbia  Fields and
     water injection challenges encountered at the Ninian Field.

o    During  Q4/07 no new wells  were  completed,  however  1.6 net wells  were
     drilling at quarter end. Production levels during the quarter were in line
     with   expectations   following  the  successful   completion  of  planned
     maintenance in Q3/07 that addressed water injection challenges experienced
     at Ninian Field earlier in the year.

o    In December  2007,  the Company  completed the sale of its entire  working
     interest in the B-Block, in line with its strategy of focusing on its core
     producing areas. The B-Block  comprises the Balmoral,  Stirling and Glamis
     Fields.  In 2007,  it produced  approximately  1,600 bbl/d net to Canadian
     Natural, representing less than 0.5% of Canadian Natural's total crude oil
     and NGLs production for the year.

OFFSHORE WEST AFRICA

o    Offshore West Africa's 2007 crude oil  production  was 28,520 bbl/d, a 22%
     decline from 2006  production of 36,689 bbl/d,  primarily from the sanding
     issues experienced at Baobab.

o    During Q4/07,  1.2 net crude oil and injection  wells were drilled with an
     additional 0.6 net wells drilling at quarter end.


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

o    The development of West Espoir was  successfully  completed in early 2008,
     with the addition of 5 production wells and 2 water injection wells during
     2007.

o    During 2007, the Company  awarded a contract for the upgrade of the Espoir
     floating  production,  storage and offtake  vessel  ("FPSO"),  in order to
     increase the  throughput  handling  capability  of the vessel.  Design and
     procurement work commenced during the year. Production volumes will not be
     significantly  impacted  during the  installation  work,  scheduled  to be
     completed in late 2009.

o    A deep water  drilling rig has been secured for the Baobab  Field.  Due to
     the rig's  ongoing prior  commitments,  it is now targeted to be mobilized
     mid-year  2008.  The Company is targeting to bring a minimum 3 of 5 of the
     shut-in  Baobab  wells  back into  production  over the course of 2008 and
     2009.

o    At the 90% owned and  operated  Olowi Field in offshore  Gabon,  all major
     construction  contracts have been awarded.  Platform construction and FPSO
     conversion  are under  way.  The  project  is on  schedule  with  drilling
     targeted to commence in Q2/08 and first crude oil production  targeted for
     late 2008.

HORIZON PROJECT

o    Canadian  Natural  achieved 90% completion of the Horizon  Project at year
     end 2007, and remains on track for first oil in the third quarter of 2008.
     The remaining 10%,  however,  is the most labour intensive  portion of the
     Horizon Project. Unfortunately, mid to late January and early February saw
     a significant  deterioration  in labour  productivity on the  construction
     site as much colder than normal weather seriously curtailed activity.  The
     weather  also  affected  the  commissioning  schedule  of certain  plants;
     however,  at  present  this is not  expected  to have  any  impact  on the
     targeted completion of Phase 1.

o    As of December 31, 2007, the forecasted total costs of the Horizon Project
     were at 13.4% over the $6.8 billion the Board of Directors  authorized  as
     project  sanction.  After a thorough review of the  productivity  that has
     recently been experienced at the Horizon Project construction site, it has
     been  determined  that should no  improvements in productivity be achieved
     through the remainder of construction,  then the cost estimate for Phase 1
     of the  Horizon  Project  would  need to be  increased  to 28%  above  the
     original $6.8 billion Board authorization.  If the Horizon Project regains
     targeted  labour  efficiencies  and  productivity,  this overage  could be
     reduced  to  approximately  25%  above the  original  $6.8  billion  Board
     authorization.  This range of outcomes will result in an on-stream cost of
     less  than  $80,000  bbl/d of  capacity,  including  the  benefits  of the
     significant pre-build capital invested for Phase 2/3.

o    In the fourth quarter of 2007, many  significant  milestones were achieved
     including  completion of the tailings pond,  filling of the raw water pond
     and preparing two tanks to receive start-up diluent in January 2008. There
     was  some  minor  slippage  in  certain  non-critical  path  plants  where
     mechanical  completion  has moved  from the end of the  second  quarter to
     early in the third quarter - with no expected  impact  however on targeted
     Project completion.  The critical path plants, the Delayed Coker / Diluent
     Recovery Unit and Hydrotreater, remain on track for first oil in the third
     quarter of 2008.

o    In parallel with completing major systems,  the Horizon Project is getting
     ready for operations and has gained significant momentum. Also, all of the
     maintenance   contracts   have  been  awarded,   with  these   contractors
     immediately  mobilizing to site in the last part of the fourth  quarter of
     2007.

o    Canadian  Natural remains  focused on timely  completion of Phase 1, while
     getting ready to operate the new facilities.  Meanwhile, with Tranche 2 of
     the next expansion,  the Company was immediately  able to award a contract
     for an additional Ore Preparation Plant to an existing  contractor that is
     performing  well. In addition,  other long lead equipment  (Coke Drums and
     Reactors) for Phase 2/3 will be delivered to site during Q1/08.

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

<TABLE>
<CAPTION>
                                                                       |----------------------------------|
PROJECT SUMMARY STATUS                                    Q3/07        |              Q4/07               |          Q1/08
                                                                       |                                  |
                                                                       |              Q4/07      Original |    Q1/08       Original
                                                          ACTUAL       |  ACTUAL    FORECAST       PLAN   |   FORECAST       PLAN
                                                          ------       |  ------    --------     -------- |   --------     --------
<S>                                                       <C>             <C>       <C>          <C>          <C>          <C>
Phase 1 - Work progress (cumulative)                       84%              90%        90%          94%         95%           97%

Phase 1 - Construction capital spending* (cumulative)      89%              99%        99%          92%         110%          97%
===================================================================================================================================
</TABLE>
*RELATIVE TO OVERALL PHASE 1 PROJECT CAPITAL OF $6.8 BILLION

ACCOMPLISHED TO THE END OF THE FOURTH QUARTER OF 2007

Detailed Engineering
o    Overall detailed engineering 98.5% complete and substantially  complete in
     most areas.

Procurement
o    Overall procurement progress is 99% complete.
o    Awarded over $5.6 billion in purchase orders and contracts to date.
o    Only  one  significant  contract  remains  to be  awarded  for  Phase  1 -
     mechanical for Sulphur Blocking.
o    Commenced receipt and site assembly of Mine Operations  Equipment (Shovels
     and Heavy Haul Trucks).
o    Operations  and  maintenance  service  and  supply  agreements  have  been
     awarded.

Modularization
o    Delivered an  additional  54 oversized  loads to site for a total of 1,560
     loads, representing approximately 94% of the total requirement.  Remaining
     deliveries  consist  primarily of the balance of required Mine  Operations
     Equipment (Shovels and Heavy Haul Trucks).

Construction
o    Overall construction progress is 85% complete.
o    Mine  overburden  removal has moved 49.9 million bank cubic meters,  which
     represents  approximately  72% of the total to be moved and is 0.6 million
     bank cubic meters ahead of schedule.
o    Main  Control  Room  Distributed  Control  Systems  equipment  powered and
     tested.
o    Commissioned 260kV Transmission line and turned over to operations.
o    Commissioned Raw Water Pumphouse and turned over to operations.
o    Completed reformer erection in Hydrogen Plant.
o    Completed installation and pre-commissioning of CPI Separator Building.
o    Completed the closure of Dyke 10 (external tailings pond) in Mining.
o    Completed  erection of Crushing  Plants and  conveyors in Ore  Preparation
     Area.
o    Completed Primary Separation Cells in Extraction.
o    Completed construction of Main Laboratory.


MILESTONES FOR THE FIRST QUARTER OF 2008

o    Mechanically complete Extraction Plant.
o    Mechanically complete Froth Treatment Plant.
o    Mechanically complete Amine Plant.
o    Complete Auxiliary Boiler installation in Cogeneration.
o    Complete Piping in Heat Integration.


  CANADIAN NATURAL RESOURCES LIMITED                                         9
================================================================================
<PAGE>

<TABLE>
<CAPTION>
MARKETING
                                                                        Quarterly Results                       Year End Results
                                                 |-------------|                                     |------------|
                                                 |       Q4/07 |           Q3/07            Q4/06    |       2007 |            2006
- -------------------------------------------------|-------------|-------------------------------------|------------|----------------
<S>                                               <C>               <C>              <C>              <C>               <C>
Crude oil and NGLs pricing
   WTI(1) benchmark price (US$/bbl)               $      90.63      $      75.33      $     60.21     $     72.40        $   66.25
   Lloyd Blend Heavy oil differential
     from WTI (%)                                          38%               30%              35%             32%               33%
   Corporate average pricing before risk
     management (C$/bbl)                          $      58.03      $      58.10      $     47.27     $     55.45        $    53.65
Natural gas pricing
   AECO benchmark price (C$/GJ)                   $       5.69      $       5.32      $      6.03     $      6.26        $     6.62
   Corporate average pricing before risk
     management (C$/mcf)                          $       6.28      $       5.87      $      6.66     $      6.85        $     6.72
===================================================================================================================================
</TABLE>
(1)  REFERS TO WEST TEXAS INTERMEDIATE (WTI) CRUDE OIL BARREL PRICED AT CUSHING,
     OKLAHOMA.

o    In Q4/07, the Lloyd Blend heavy crude oil differential as a percent of WTI
     was 38%,  compared to 30% in Q3/07. The Lloyd Blend heavy oil differential
     increased in Q4/07 due to seasonal demand  fluctuations,  refinery outages
     and turn arounds,  refiners  reducing their  inventory  levels  decreasing
     demand, and the common carrier pipeline disruption in November 2007. Heavy
     oil differentials in Q1/08 have improved to approximately 27% of WTI.

o    The Company continues efforts towards working with various industry groups
     to find new  markets,  such as the U.S.  Gulf Coast for  Western  Canadian
     heavy crude oil and to ease the  logistical  constraints  in getting crude
     oil to that  area.  The heavy  crude oil sold to the Gulf  Coast  receives
     Mayan index  equivalent  pricing,  a premium to the Lloyd Blend price. For
     Q4/07, the Mayan differential to WTI averaged US$12.30/bbl or 16%.

o    During Q4/07, the Company contributed  approximately  155,000 bbl/d of its
     heavy  crude oil streams to the Western  Canadian  Select  blend as market
     conditions  resulted in this  strategy  offering  the optimal  pricing for
     bitumen.

o    Natural gas inventories in North America  continue to remain high in Q4/07
     due to a lack of  demand  for  natural  gas  and  higher  storage  levels,
     resulting from the milder weather, and significant  increases in liquefied
     natural gas (LNG)  imports to the United  States at the beginning of 2007,
     along with growing  production levels in the United States.  These factors
     contributed  to  depressed  pricing  for  natural  gas for  North  America
     relative to WTI.

FINANCIAL REVIEW

o    Canadian Natural has structured its financial  position to profitably grow
     its  conventional  crude  oil and  natural  gas  operations  over the next
     several years and to build the financial  capacity to complete the Horizon
     Project and other major projects. A brief summary of its strengths are:

     -    A diverse  asset base  geographically  and by  product -  produced  in
          excess of  601,900  boe/d in Q4/07,  comprised  of  approximately  44%
          natural gas and 56% crude oil - with 95% of  production  located in G8
          countries with stable and secure economies.

     -    Financial  stability and liquidity - cash flow from operations of $6.2
          billion for the fiscal year 2007,  available unused bank lines of $1.4
          billion  at  December  31,  2007 and access to  capital  debt  markets
          supported by strong credit ratings.

     -    Reduced volatility of commodity prices - a proactive commodity hedging
          program to reduce the downside risk of volatility in commodity  prices
          supporting cash flow for its capital  expenditure  program  throughout
          the Horizon Project.

     -    A strengthening  balance sheet with debt to book capitalization of 45%
          and debt to EBITDA of 1.6 times, both within our targeted ranges.


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

o    In December  2007,  the Company  issued $400  million of  unsecured  notes
     maturing December 2010, bearing interest at 5.50%.  Subsequent to December
     31, 2007, the Company issued US$1,200 million of unsecured notes under its
     US base shelf  prospectus,  comprised of US$400 million of 5.15% unsecured
     notes due  February  2013,  US$400  million of 5.90%  unsecured  notes due
     February 2018, and US$400  million of 6.75%  unsecured  notes due February
     2039.  Net  proceeds  from the  issue of these  notes  were  used to repay
     bankers' acceptances.

o    During  2007,   the  Company  did  not  purchase  any  common  shares  for
     cancellation pursuant to the Normal Course Issuer Bid previously filed for
     the  12-month  period  beginning  January 24, 2007 and ending  January 23,
     2008.  The Company has decided not to renew the Normal  Course  Issuer Bid
     until subsequent to the completion of Phase 1 of the Horizon Project.

o    Eighth consecutive year of dividend increases. The 2008 quarterly dividend
     will  increase 18% from $0.085 per common share to $0.10 per common share,
     effective with the April 1, 2008 payment.


OUTLOOK

The Company  forecasts  2008  production  levels  before  royalties  to average
between  1,429 and 1,513 mmcf/d of natural gas and between  316,000 and 366,000
bbl/d of crude oil and NGLs.  Q1/08  production  guidance  before  royalties is
forecast to average  between  1,522 and 1,557 mmcf/d of natural gas and between
315,000 and 331,000 bbl/d of crude oil and NGLs.  Detailed  guidance on revised
production  levels,  capital allocation and operating costs can be found on the
Company's website at HTTP://WWW.CNRL.COM/INVESTOR_INFO/CORPORATE_GUIDANCE/.




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

<PAGE>

YEAR-END RESERVES

DETERMINATION OF RESERVES
o    For the year ended December 31, 2007,  Canadian Natural retained qualified
     independent  reserve evaluators,  Sproule Associates Limited  ("Sproule"),
     and Ryder Scott Company ("Ryder Scott"), to evaluate 100% of the Company's
     conventional  proved and proved and  probable  crude oil and  natural  gas
     reserves and prepare  Evaluation  Reports on the Company's total reserves.
     Sproule  evaluated  the  Company's  North  America  assets and Ryder Scott
     evaluated its international  assets.  Canadian Natural has been granted an
     exemption  from 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.  There are
     three principal  differences  between the two standards.  The first is the
     requirement  under NI  51-101 to  disclose  both  proved  and  proved  and
     probable reserves,  as well as the related net present value of future net
     revenues using forecast prices and costs.  The second is in the definition
     of proved  reserves;  however,  as  discussed  in the Canadian Oil and Gas
     Evaluation Handbook ("COGEH"),  the standards that NI 51-101 employs,  the
     difference  in estimated  proved  reserves  based on constant  pricing and
     costs  between  the  two  standards  is not  material.  The  third  is the
     requirement  to  disclose  a  gross  reserve  reconciliation  (before  the
     consideration  of  royalties).  Canadian  Natural  discloses  its  reserve
     reconciliation net of royalties in adherence to SEC requirements.
o    The Company has disclosed  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.
o    The SEC requires  that oil sands mining  reserves be disclosed  separately
     from  conventional  oil and gas disclosure.  Canadian  Natural  retained a
     qualified  independent reserve evaluator,  GLJ Petroleum  Consultants Ltd.
     ("GLJ"),  to evaluate Phase 1 to Phase 3 of the Company's  Horizon Project
     under SEC Industry Guide 7 requirements.
o    The Reserves  Committee of the  Company's  Board of Directors has met with
     and carried out independent due diligence procedures with each of Sproule,
     Ryder Scott and GLJ as to the Company's reserves.

CORPORATE CONVENTIONAL NET RESERVES
o    Crude oil, natural gas and NGLs proved reserves  increased by 1% replacing
     110% of production.  This was accomplished at all-in finding and on-stream
     cost of $14.28 per barrel of oil equivalent for proved reserves and $18.02
     per barrel of oil equivalent for proved and probable reserves.
o    In the Evaluation Reports,  46% of crude oil and NGLs proved reserves were
     assigned to the proved undeveloped category, a 1 percentage point decrease
     from the 47% recorded in 2006.
o    In the  Evaluation  Reports,  22% of  natural  gas  proved  reserves  were
     assigned  to the proved  undeveloped  category  reflecting  the  generally
     shorter lead times required for natural gas developments in Canada.
o    In the Evaluation Reports, total proved and probable reserves decreased by
     1%.

NORTH AMERICA CONVENTIONAL NET RESERVES
o    Crude oil and NGLs  proved  reserves  increased  by 4%  replacing  143% of
     production.  Natural gas proved reserves  decreased by 5% replacing 63% of
     2007  production  and reflected the Company's  decision to reduce  capital
     spending on natural gas.

INTERNATIONAL CONVENTIONAL NET RESERVES
o    North Sea  proved  reserves  grew by 18  million  barrels  to 324  million
     barrels of oil equivalent or 16% of the total proved Company reserves.
o    In Offshore  West Africa  proved  reserves  were  unchanged at 139 million
     barrels. This is largely the result of increases in the year end crude oil
     price which, in the Cote d'Ivoire  evaluation,  accelerates project payout
     and increases the government royalties payable.

HORIZON OIL SANDS MINING GROSS LEASE RESERVES
o    The gross lease proved bitumen  reserves  increased by 110 million barrels
     to 2.385 billion barrels largely as a result of Tranche 2 capital spending
     commitments.   The  gross  lease  proved  and  probable  bitumen  reserves
     decreased 5 million barrels to 3.525 billion barrels.
o    The gross  lease  proved  synthetic  crude oil  reserves  increased  by 90
     million  barrels to 1.956  billion  barrels.  The gross leased  proved and
     probable synthetic crude oil reserves decreased 4 million barrels to 2.958
     billion barrels.


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

<TABLE>
<CAPTION>
RESERVES OF CONVENTIONAL CRUDE OIL AND NATURAL GAS, NET OF ROYALTIES(1)

                                                                                     DECEMBER 31, 2007
                                                           PROVED                 PROVED             PROVED           PROVED AND
                                                     DEVELOPED(2)         UNDEVELOPED(2)           TOTAL(2)          PROBABLE(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                 <C>                     <C>                <C>
CRUDE OIL AND NGLS (mmbbl)
   North America                                              426                    494                920                1,545
   North Sea                                                  240                     70                310                  405
   Offshore West Africa                                        70                     58                128                  186
- ---------------------------------------------------------------------------------------------------------------------------------
                                                              736                    622              1,358                2,136
- ---------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS (bcf)
   North America                                            2,731                    790              3,521                4,602
   North Sea                                                   58                     23                 81                  113
   Offshore West Africa                                        53                     11                 64                   88
- ---------------------------------------------------------------------------------------------------------------------------------
                                                            2,842                    824              3,666                4,803
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RESERVES (mmboe)                                      1,210                    759              1,969                2,937
=================================================================================================================================
RESERVE REPLACEMENT RATIO(4) (%)                                                                       110%                  87%
=================================================================================================================================
COST TO DEVELOP(5) ($/boe)
   10% discount                                    $         1.25      $            6.73       $       3.36       $         3.20
   15% discount                                    $         1.09      $            6.43       $       3.15       $         2.99
=================================================================================================================================
PRESENT VALUE OF CONVENTIONAL RESERVES(6)
($ millions)
   10% discount                                    $       25,767      $           8,810       $     34,577       $       44,286
   15% discount                                    $       21,924      $           6,082       $     28,006       $       34,604
=================================================================================================================================
</TABLE>



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

<PAGE>

<TABLE>
<CAPTION>
RESERVES OF CONVENTIONAL CRUDE OIL AND NATURAL GAS, NET OF ROYALTIES(1)

                                                                                     DECEMBER 31, 2006
                                                           PROVED                 PROVED             PROVED           PROVED AND
                                                     DEVELOPED(2)         UNDEVELOPED(2)           TOTAL(2)          PROBABLE(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                 <C>                     <C>                <C>
CRUDE OIL AND NGLS (mmbbl)
   North America                                              420                    467                887                1,502
   North Sea                                                  214                     85                299                  422
   Offshore West Africa                                        63                     67                130                  195
- ---------------------------------------------------------------------------------------------------------------------------------
                                                              697                    619              1,316                2,119
- ---------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS (bcf)
   North America                                            2,934                    771              3,705                4,857
   North Sea                                                   17                     20                 37                   93
   Offshore West Africa                                        12                     44                 56                   99
- ---------------------------------------------------------------------------------------------------------------------------------
                                                            2,963                    835              3,798                5,049
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RESERVES (mmboe)                                      1,191                    758              1,949                2,961
=================================================================================================================================
RESERVE REPLACEMENT RATIO(4) (%)                                                                       295%                 472%
=================================================================================================================================
COST TO DEVELOP(5) ($/boe)
   10% discount                                   $          1.33      $            6.46       $       3.32       $         3.08
   15% discount                                   $          1.12      $            5.80       $       2.94       $         2.66
=================================================================================================================================
PRESENT VALUE OF CONVENTIONAL RESERVES(6)
($ millions)
   10% discount                                   $        20,028      $           7,469       $     27,497       $       37,291
   15% discount                                   $        17,296      $           5,247       $     22,543       $       29,350
=================================================================================================================================
</TABLE>

OIL SANDS MINING RESERVES(1)(7)

The  following  table sets out  Canadian  Natural's  reserves  of  bitumen  and
synthetic crude oil from the Horizon Project Oil Sands leases.

<TABLE>
<CAPTION>
                                                      |---------------------------------|
                                                      |         AS AT DEC 31, 2007      |                 AS AT DEC 31, 2006
                                                      |    PROVED           PROVED AND  |            PROVED           PROVED AND
                                                      |     TOTAL             PROBABLE  |             TOTAL             PROBABLE
- ------------------------------------------------------|---------------------------------|-----------------------------------------
<S>                                                       <C>                  <C>                  <C>                  <C>
Gross reserves*, before royalties (mmbbl)
           Bitumen                                          2,385                3,525                2,275                3,530
           Synthetic crude oil                              1,956                2,958                1,866                2,962
==================================================================================================================================
</TABLE>
*REPRESENTS GROSS LEASE RESERVES.
SYNTHETIC  CRUDE OIL RESERVES ARE BASED UPON UPGRADING OF THE BITUMEN  RESERVES.
THE RESERVES SHOWN FOR BITUMEN AND SYNTHETIC CRUDE OIL ARE NOT ADDITIVE.


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

<TABLE>
<CAPTION>
CONVENTIONAL CRUDE OIL AND NGLS RESERVES RECONCILIATION, NET OF ROYALTIES(1)

                                                                 NORTH          NORTH          OFFSHORE
PROVED RESERVES (MMBBL)                                        AMERICA            SEA       WEST AFRICA           TOTAL
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>           <C>              <C>
Reserves, December 31, 2005                                        694            290               134           1,118
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                          53              3                 -              56
Infill drilling                                                    190             14                 -             204
Improved recovery                                                    -             12                 -              12
Property purchases                                                  26              -                 -              26
Property disposals                                                   -              -                 -               -
Production                                                        (75)           (22)              (13)           (110)
Revisions of prior estimates                                       (1)              2                 9              10
- ------------------------------------------------------------------------------------------------------------------------
Reserves, December 31, 2006                                        887            299               130           1,316
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                          30              -                 -              30
Infill drilling                                                     10              6                 -              16
Improved recovery                                                    3              -                 -               3
Property purchases                                                   1              -                 -               1
Property disposals                                                   -            (3)                 -             (3)
Production                                                        (77)           (20)              (10)           (107)
Revisions of prior estimates                                        66             28                 8             102
- ------------------------------------------------------------------------------------------------------------------------
RESERVES, DECEMBER 31, 2007                                        920            310               128           1,358
========================================================================================================================


<CAPTION>
PROVED AND PROBABLE RESERVES (MMBBL)
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>           <C>              <C>
Reserves, December 31, 2005                                      1,035            417               206           1,658
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                         128              3                 -             131
Infill drilling                                                    384             17                 -             401
Improved recovery                                                    -             12                 -              12
Property purchases                                                  34              -                 -              34
Property disposals                                                   -              -                 -               -
Production                                                        (75)           (22)              (13)           (110)
Revisions of prior estimates                                       (4)            (5)                 2             (7)
- ------------------------------------------------------------------------------------------------------------------------
Reserves, December 31, 2006                                      1,502            422               195           2,119
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                          41              -                 -              41
Infill drilling                                                     52              6                 -              58
Improved recovery                                                    4              -                 -               4
Property purchases                                                   2              6                 -               8
Property disposals                                                   -            (3)                 -             (3)
Production                                                        (77)           (20)              (10)           (107)
Revisions of prior estimates                                        21            (6)                 1              16
- ------------------------------------------------------------------------------------------------------------------------
RESERVES, DECEMBER 31, 2007                                      1,545            405               186           2,136
========================================================================================================================
</TABLE>


  CANADIAN NATURAL RESOURCES LIMITED                                        15
================================================================================
<PAGE>

<TABLE>
<CAPTION>
                                                                 NORTH          NORTH          OFFSHORE
PROVED RESERVES (BCF)                                          AMERICA            SEA       WEST AFRICA           TOTAL
- ------------------------------------------------------------------------------------------------------------------------
<S>                                                            <C>            <C>           <C>              <C>
Reserves, December 31, 2005                                      2,741             29                72           2,842
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                         250              -                 -             250
Infill drilling                                                     71              -                 -              71
Improved recovery                                                    3              -                 -               3
Property purchases                                               1,111              -                 -           1,111
Property disposals                                                  (1)             -                 -              (1)
Production                                                        (433)            (5)               (3)           (441)
Revisions of prior estimates                                       (37)            13               (13)            (37)
- ------------------------------------------------------------------------------------------------------------------------
Reserves, December 31, 2006                                      3,705             37                56           3,798
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                         134              -                 -             134
Infill drilling                                                    124              3                 -             127
Improved recovery                                                    8              -                 -               8
Property purchases                                                  12              -                 -              12
Property disposals                                                   -              -                 -               -
Production                                                        (503)            (5)               (4)           (512)
Revisions of prior estimates                                        41             46                12              99
- ------------------------------------------------------------------------------------------------------------------------
RESERVES, DECEMBER 31, 2007                                      3,521             81                64           3,666
- ------------------------------------------------------------------------------------------------------------------------


PROVED AND PROBABLE RESERVES (BCF)
- ------------------------------------------------------------------------------------------------------------------------
Reserves, December 31, 2005                                      3,548             69               110           3,727
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                         307              -                 -             307
Infill drilling                                                     95              -                 -              95
Improved recovery                                                    4              -                 -               4
Property purchases                                               1,466              -                 -           1,466
Property disposals                                                  (1)             -                 -              (1)
Production                                                        (433)            (5)               (3)           (441)
Revisions of prior estimates                                      (129)            29                (8)           (108)
- ------------------------------------------------------------------------------------------------------------------------
Reserves, December 31, 2006                                      4,857             93                99           5,049
- ------------------------------------------------------------------------------------------------------------------------
Extensions and discoveries                                         177              -                 -             177
Infill drilling                                                    163              3                 -             166
Improved recovery                                                    8              -                 -               8
Property purchases                                                  17              1                 -              18
Property disposals                                                  (1)             -                 -              (1)
Production                                                        (503)            (5)               (4)           (512)
Revisions of prior estimates                                      (116)            21                (7)           (102)
- ------------------------------------------------------------------------------------------------------------------------
RESERVES, DECEMBER 31, 2007                                      4,602            113                88           4,803
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>


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

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

<TABLE>
<CAPTION>
CONVENTIONAL RESERVES, BEFORE ROYALTIES(1)

                                                                                      DECEMBER 31, 2007
                                                           PROVED                 PROVED             PROVED           PROVED AND
                                                     DEVELOPED(2)         UNDEVELOPED(2)           TOTAL(2)          PROBABLE(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                 <C>                     <C>                <C>
CRUDE OIL AND NGLS (mmbbl)
   North America                                              505                    579              1,084                1,806
   North Sea                                                  242                     69                311                  406
   Offshore West Africa                                        81                     67                148                  218
- ---------------------------------------------------------------------------------------------------------------------------------
                                                              828                    715              1,543                2,430
- ---------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS (bcf)
   North America                                            3,330                    945              4,275                5,582
   North Sea                                                   58                     23                 81                  113
   Offshore West Africa                                        66                     13                 79                  109
- ---------------------------------------------------------------------------------------------------------------------------------
                                                            3,454                    981              4,435                5,804
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RESERVES (mmboe)                                      1,404                    879              2,282                3,397
=================================================================================================================================

<CAPTION>
                                                                                      DECEMBER 31, 2006
                                                           PROVED                 PROVED             PROVED           PROVED AND
                                                     DEVELOPED(2)         UNDEVELOPED(2)           TOTAL(2)          PROBABLE(3)
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>                 <C>                     <C>                <C>
CRUDE OIL AND NGLS (mmbbl)
   North America                                              495                    548              1,043                1,753
   North Sea                                                  214                     85                299                  421
   Offshore West Africa                                        70                     75                145                  223
- ---------------------------------------------------------------------------------------------------------------------------------
                                                              779                    708              1,487                2,397
- ---------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS (bcf)
   North America                                            3,587                    920              4,507                5,898
   North Sea                                                   17                     20                 37                   93
   Offshore West Africa                                        15                     54                 69                  121
- ---------------------------------------------------------------------------------------------------------------------------------
                                                            3,619                    994              4,613                6,112
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RESERVES (mmboe)                                      1,382                    874              2,256                3,416
=================================================================================================================================
</TABLE>



  CANADIAN NATURAL RESOURCES LIMITED                                        17
================================================================================
<PAGE>

<TABLE>
<CAPTION>
CONVENTIONAL FINDING AND ON-STREAM COSTS
                                                                                                                      Three Year
                                                             2007                   2006               2005                Total
- ----------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>                   <C>                        <C>                 <C>
NET RESERVE REPLACEMENT EXPENDITURES                 $      3,027          $       8,727              3,361               15,115
   ($ millions)
NET RESERVE ADDITIONS (mmboe) ((8))
   Proved                                                     212                    540                251                1,003
   Proved and probable                                        168                    865                337                1,370
FINDING AND ON-STREAM COSTS ($/boe) ((9))
   Proved                                            $      14.28          $       16.16              13.41                15.07
   Proved and probable                               $      18.02          $       10.09               9.97                11.03
==================================================================================================================================
</TABLE>
(1)  RESERVE  ESTIMATES AND PRESENT VALUE  CALCULATIONS ARE BASED UPON YEAR END
     CONSTANT REFERENCE PRICE ASSUMPTIONS AS DETAILED BELOW AS WELL AS CONSTANT
     YEAR-END COSTS.

<TABLE>
<CAPTION>
                                                     COMPANY                WTI @            HARDISTY                    NORTH
                                                     AVERAGE              CUSHING               HEAVY                      SEA
                                                       PRICE             OKLAHOMA           12(0) API                    BRENT
CRUDE OIL AND NGLS                                  (C$/BBL)            (US$/BBL)            (C$/BBL)                (US$/BBL)
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                          <C>                   <C>                  <C>                 <C>
2007                                         $         62.87       $        96.00       $       41.70       $            96.02
2006                                         $         51.11       $        61.05       $       41.94       $            58.93
2005                                         $         46.12       $        61.04       $       32.64       $            58.21
===============================================================================================================================
                                                     COMPANY                                                  BRITISH COLUMBIA
                                                     AVERAGE            HENRY HUB             ALBERTA               HUNTINGDON
                                                       PRICE            LOUISIANA              AECO C                    SUMAS
NATURAL GAS                                         (C$/MCF)          (US$/MMBTU)          (C$/MMBTU)               (C$/MMBTU)
- -------------------------------------------------------------------------------------------------------------------------------
2007                                         $          6.48       $         6.80       $        6.52       $             6.96
2006                                         $          6.07       $         5.52       $        6.13       $             6.52
2005                                         $          9.45       $        10.08       $        9.99       $             9.53
===============================================================================================================================
</TABLE>

A FOREIGN  EXCHANGE  RATE OF  US$1.01/C$1.00  WAS USED IN THE 2007  EVALUATION;
US$0.86/C$1.00 WAS USED IN THE 2006 AND 2005 EVALUATION.

(2)  PROVED RESERVE  ESTIMATES AND VALUES WERE EVALUATED IN ACCORDANCE WITH THE
     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)  PROVED AND  PROBABLE  RESERVE  ESTIMATES  AND  VALUES  WERE  EVALUATED  IN
     ACCORDANCE  WITH THE  STANDARDS OF THE 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  DISCOUNTED  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.  FUTURE  DEVELOPMENT  COSTS AND  ASSOCIATED  MATERIAL  WELL
     ABANDONMENT COSTS HAVE BEEN APPLIED AGAINST FUTURE NET REVENUES.
(7)  SYNTHETIC  CRUDE  OIL  RESERVES  ARE  BASED ON  UPGRADING  OF THE  BITUMEN
     RESERVES  USING  TECHNOLOGIES  IMPLEMENTED  AT THE  HORIZON  PROJECT.  THE
     RESERVE VALUES SHOWN FOR BITUMEN AND SYNTHETIC CRUDE OIL ARE NOT ADDITIVE.
(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 CASH EXPENDITURES FOR EACH YEAR BY NET RESERVES ADDITIONS FOR THAT
     YEAR.  IT  EXCLUDES  COSTS  ASSOCIATED  WITH  HEAD  OFFICE,  ABANDONMENTS,
     MIDSTREAM AND THE HORIZON PROJECT.


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

MANAGEMENT'S DISCUSSION AND ANALYSIS

FORWARD-LOOKING STATEMENTS

Certain  statements  in this  document  or  documents  incorporated  herein  by
reference constitute  forward-looking  statements or information  (collectively
referred  to herein as  "forward-looking  statements")  within  the  meaning of
applicable securities legislation. Forward-looking statements can be identified
by the words "believe",  "anticipate",  "expect", "plan", "estimate", "target",
"continue", "could", "intend", "may", "potential", "predict", "should", "will",
"objective",  "project",  "forecast", "goal", "guidance",  "outlook", "effort",
"seeks",  "schedule"  or  expressions  of a similar  nature  suggesting  future
outcome or  statements  regarding  an outlook.  Disclosure  related to expected
future  commodity  pricing,  production  volumes,  royalties,  operating costs,
capital   expenditures  and  other  2008  guidance  provided   throughout  this
Management's  Discussion  and Analysis  ("MD&A"),  constitutes  forward-looking
statements.  In addition,  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. There are numerous uncertainties inherent in estimating
quantities  of proved  crude oil and natural  gas  reserves  and in  projecting
future rates of  production  and the timing of  development  expenditures.  The
total amount or timing of actual future production may vary  significantly from
reserve and production estimates.

These  statements are not guarantees of future  performance  and are subject to
certain  risks  and the  reader  should  not  place  undue  reliance  on  these
forward-looking  statements  as  there  can be no  assurance  that  the  plans,
initiatives or expectations upon which they are based will occur.

The forward-looking statements are based on current expectations, estimates and
projections  about Canadian Natural  Resources  Limited (the "Company") and the
industry  in which the Company  operates,  which speak only as of the date such
statements  were made or as of the date of the report or document in which they
are contained,  and are subject to known and unknown risks,  uncertainties  and
other factors that could cause the actual results,  performance or achievements
of the Company to be materially different from any future results,  performance
or achievements expressed or implied by such forward-looking  statements.  Such
factors include,  among others:  general economic and business conditions which
will, among other things,  impact demand for and market prices of the Company's
products;  volatility of and  assumptions  regarding  crude oil and natural gas
prices;  fluctuations in currency and interest rates;  assumptions on which the
Company's current guidance is based;  economic  conditions in the countries and
regions  in  which  the  Company  conducts  business;   political  uncertainty,
including actions of or against terrorists,  insurgent groups or other conflict
including conflict between states; industry capacity; ability of the Company to
implement  its  business  strategy,   including   exploration  and  development
activities;   impact  of  competition;   the  Company's  defense  of  lawsuits;
availability and cost of seismic, drilling and other equipment;  ability of the
Company and its  subsidiaries to complete its capital  programs;  the Company's
and  its  subsidiaries'  ability  to  secure  adequate  transportation  for its
products;  unexpected  difficulties  in mining,  extracting  or  upgrading  the
Company's bitumen  products;  potential delays or changes in plans with respect
to exploration or development projects or capital expenditures;  ability of the
Company to attract the necessary  labour  required to build its thermal and oil
sands mining projects; operating hazards and other difficulties inherent in the
exploration  for  and  production  and  sale of  crude  oil  and  natural  gas;
availability and cost of financing; the Company's and its subsidiaries' success
of  exploration  and  development  activities  and their ability to replace and
expand crude oil and natural gas  reserves;  timing and success of  integrating
the  business  and  operations  of  acquired   companies;   production  levels;
imprecision  of reserve  estimates and estimates of  recoverable  quantities of
crude oil, bitumen, natural gas and liquids not currently classified as proved;
actions  by   governmental   authorities;   government   regulations   and  the
expenditures  required to comply with them (especially safety and environmental
laws and  regulations  and the impact of climate change  initiatives on capital
and  operating  costs);  asset  retirement  obligations;  the  adequacy  of the
Company's provision for taxes; and other  circumstances  affecting revenues and
expenses.  The Company's  operations  have been, and at times in the future may
be,  affected by political  developments  and by federal,  provincial and local
laws and  regulations  such as  restrictions  on production,  changes in taxes,
royalties and other amounts  payable to governments or  governmental  agencies,
price or gathering  rate  controls and  environmental  protection  regulations.
Should one or more of these risks or uncertainties  materialize,  or should any
of the  Company's  assumptions  prove  incorrect,  actual  results  may vary in
material respects from those projected in the forward-looking  statements.  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 the Company's course of action would depend upon its assessment of
the future considering all information then available.


  CANADIAN NATURAL RESOURCES LIMITED                                        19
================================================================================
<PAGE>


Readers are  cautioned  that the  foregoing  list of  important  factors is not
exhaustive. Unpredictable or unknown factors not discussed in this report could
also have material adverse effects on forward-looking statements.  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.  Except as  required  by law,  the  Company  assumes no
obligation  to  update  forward-looking   statements  should  circumstances  or
Management's estimates or opinions change.


MANAGEMENT'S DISCUSSION AND ANALYSIS

Management's  Discussion and Analysis of the financial condition and results of
operations  of the Company  should be read in  conjunction  with the  unaudited
interim consolidated  financial statements for the year ended December 31, 2007
and the MD&A and the audited  consolidated  financial  statements  for the year
ended December 31, 2006.

All dollar amounts are referenced in millions of Canadian dollars, except where
noted otherwise. The financial statements have been prepared in accordance with
Canadian generally accepted accounting principles ("GAAP").  This MD&A includes
references to financial measures commonly used in the crude oil and natural gas
industry,  such as adjusted net  earnings  from  operations  and cash flow from
operations.  These financial measures are not defined by GAAP and therefore are
referred to as non-GAAP measures. The non-GAAP measures used by the Company may
not be comparable to similar measures presented by other companies. The Company
uses these non-GAAP measures to evaluate its performance. The non-GAAP measures
should  not be  considered  an  alternative  to or  more  meaningful  than  net
earnings,  as  determined  in  accordance  with GAAP,  as an  indication of the
Company's  performance.  The measures adjusted net earnings from operations and
cash flow from  operations  are  reconciled  to net earnings in the  "Financial
Highlights" section.

The  calculation of barrels of oil equivalent  ("boe") is based on a conversion
ratio of six thousand  cubic feet ("mcf") of natural gas to one barrel  ("bbl")
of crude oil to  estimate  relative  energy  content.  This  conversion  may be
misleading, particularly when used in isolation, since the 6 mcf:1 bbl ratio is
based on an energy  equivalency  at the burner tip and does not  represent  the
value equivalency at the wellhead.

Production volumes are presented  throughout this MD&A on a "before royalty" or
"gross"  basis,  and  realized  prices  exclude  the effect of risk  management
activities and transportation and blending costs, except where noted otherwise.
Production  on an  "after  royalty"  or  "net"  basis  is  also  presented  for
information purposes only.

The following  discussion  refers primarily to the Company's  financial results
for the year and three  months  ended  December  31,  2007 in  relation  to the
comparable  periods  in 2006 and the third  quarter of 2007.  The  accompanying
tables  form an integral  part of this MD&A.  This MD&A is dated  February  26,
2008.  Additional  information  relating to the Company,  including  its Annual
Information Form for the year ended December 31, 2006, is available on SEDAR at
www.sedar.com.



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

<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS

($ millions, except per common share amounts)
                                                                 Three Months Ended                             Year Ended
                                                  |----------|                                     |------------|
                                                  |   DEC 31 |         Sep 30           Dec 31     |     DEC 31 |        Dec 31
                                                  |     2007 |           2007             2006     |       2007 |          2006
- --------------------------------------------------|----------|-------------------------------------|------------|----------------
<S>                                                <C>            <C>              <C>              <C>              <C>
Revenue, before royalties                          $   3,200      $     3,073      $     2,826      $    12,543      $   11,643
Net earnings                                       $     798      $       700      $       313      $     2,608      $    2,524
      Per common share   - basic and diluted       $    1.48      $      1.30      $      0.58      $      4.84      $     4.70
Adjusted net earnings from operations (1)          $     546      $       644      $       412      $     2,406      $    1,664
      Per common share   - basic and diluted       $    1.02      $      1.19      $      0.77      $      4.46      $     3.10
Cash flow from operations (2)                      $   1,486      $     1,577      $     1,293      $     6,198      $    4,932
      Per common share   - basic and diluted       $    2.75      $      2.92      $      2.41      $     11.49      $     9.18
Capital expenditures, net of dispositions          $   1,514      $     1,442      $     6,497      $     6,425      $   12,025
=================================================================================================================================
</TABLE>
(1)  ADJUSTED  NET  EARNINGS  FROM  OPERATIONS  IS  A  NON-GAAP   MEASURE  THAT
     REPRESENTS  NET EARNINGS  ADJUSTED FOR CERTAIN ITEMS OF A  NON-OPERATIONAL
     NATURE.  THE COMPANY  EVALUATES  ITS  PERFORMANCE  BASED ON  ADJUSTED  NET
     EARNINGS FROM OPERATIONS.  THE RECONCILIATION  "ADJUSTED NET EARNINGS FROM
     OPERATIONS"  BELOW  LISTS THE  AFTER-TAX  EFFECTS  OF  CERTAIN  ITEMS OF A
     NON-OPERATIONAL  NATURE  THAT  ARE  INCLUDED  IN THE  COMPANY'S  FINANCIAL
     RESULTS.  ADJUSTED NET EARNINGS FROM  OPERATIONS  MAY NOT BE COMPARABLE TO
     SIMILAR MEASURES PRESENTED BY OTHER COMPANIES.

(2)  CASH FLOW FROM  OPERATIONS  IS A  NON-GAAP  MEASURE  THAT  REPRESENTS  NET
     EARNINGS  ADJUSTED FOR NON-CASH ITEMS BEFORE WORKING CAPITAL  ADJUSTMENTS.
     THE COMPANY  EVALUATES ITS PERFORMANCE BASED ON CASH FLOW FROM OPERATIONS.
     THE  COMPANY  CONSIDERS  CASH FLOW FROM  OPERATIONS  A KEY  MEASURE  AS IT
     DEMONSTRATES THE COMPANY'S  ABILITY TO GENERATE THE CASH FLOW NECESSARY TO
     FUND FUTURE  GROWTH  THROUGH  CAPITAL  INVESTMENT  AND TO REPAY DEBT.  THE
     RECONCILIATION  "CASH FLOW FROM  OPERATIONS"  BELOW LISTS CERTAIN NON-CASH
     ITEMS THAT ARE INCLUDED IN THE COMPANY'S FINANCIAL RESULTS. CASH FLOW FROM
     OPERATIONS  MAY NOT BE COMPARABLE TO SIMILAR  MEASURES  PRESENTED BY OTHER
     COMPANIES.

<TABLE>
<CAPTION>
ADJUSTED NET EARNINGS FROM OPERATIONS

                                                                             THREE MONTHS ENDED                     YEAR ENDED
                                                                  |---------|                             |---------|
                                                                  |  DEC 31 |       SEP 30      DEC 31    |  DEC 31 |     DEC 31
     ($ MILLIONS)                                                 |    2007 |         2007        2006    |    2007 |       2006
     -------------------------------------------------------------|---------|-----------------------------|---------|--------------
<S>                                                                <C>          <C>           <C>          <C>          <C>
     NET EARNINGS AS REPORTED                                      $    798     $     700     $    313     $   2,608    $  2,524
     STOCK-BASED COMPENSATION (RECOVERY) EXPENSE, NET OF TAX(A)         (11)           54          120           134          95
     UNREALIZED RISK MANAGEMENT LOSS (GAIN), NET OF TAX(B)              593            57         (166)          977        (674)
     UNREALIZED FOREIGN EXCHANGE (GAIN) LOSS, NET OF TAX(C)             (41)         (167)         145         (449)         114
     EFFECT OF STATUTORY TAX RATE AND OTHER LEGISLATIVE
         CHANGES ON  FUTURE INCOME TAX LIABILITIES(D)                  (793)            -            -         (864)        (395)
     ------------------------------------------------------------------------------------------------------------------------------
     ADJUSTED NET EARNINGS FROM OPERATIONS                         $    546     $     644     $    412     $   2,406    $  1,664
     ==============================================================================================================================
</TABLE>
(a)  THE  COMPANY'S  EMPLOYEE  STOCK  OPTION PLAN  PROVIDES  FOR A CASH PAYMENT
     OPTION. ACCORDINGLY, THE INTRINSIC VALUE OF THE OUTSTANDING VESTED OPTIONS
     IS RECORDED AS A LIABILITY  ON THE  COMPANY'S  BALANCE  SHEET AND PERIODIC
     CHANGES IN THE  INTRINSIC  VALUE ARE  RECOGNIZED  IN NET  EARNINGS  OR ARE
     CAPITALIZED   AS  PART  OF  THE  HORIZON  OIL  SANDS  PROJECT  DURING  THE
     CONSTRUCTION PERIOD.

(b)  DERIVATIVE FINANCIAL INSTRUMENTS ARE RECORDED AT FAIR VALUE ON THE BALANCE
     SHEET,  WITH CHANGES IN THE FAIR VALUE OF  NON-DESIGNATED  HEDGES  FLOWING
     THROUGH NET EARNINGS.  THE AMOUNTS  ULTIMATELY  REALIZED MAY BE MATERIALLY
     DIFFERENT  THAN  REFLECTED IN THE FINANCIAL  STATEMENTS  DUE TO CHANGES IN
     PRICES OF THE  UNDERLYING  ITEMS HEDGED,  PRIMARILY  CRUDE OIL AND NATURAL
     GAS.

(c)  UNREALIZED  FOREIGN  EXCHANGE  GAINS AND LOSSES RESULT  PRIMARILY FROM THE
     TRANSLATION OF US DOLLAR DENOMINATED LONG-TERM DEBT TO PERIOD-END EXCHANGE
     RATES,  OFFSET BY THE IMPACT OF CROSS CURRENCY SWAPS,  AND ARE IMMEDIATELY
     RECOGNIZED IN NET EARNINGS.

(d)  ALL SUBSTANTIVELY  ENACTED  ADJUSTMENTS IN APPLICABLE INCOME TAX RATES AND
     OTHER LEGISLATIVE CHANGES 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.
     INCOME TAX RATE AND OTHER  LEGISLATIVE  CHANGES  IN THE FOURTH  QUARTER OF
     2007  RESULTED  IN  A  REDUCTION  OF  FUTURE  INCOME  TAX  LIABILITIES  OF
     APPROXIMATELY  $793 MILLION IN NORTH  AMERICA.  INCOME TAX RATE CHANGES IN
     THE SECOND  QUARTER OF 2007  RESULTED IN A REDUCTION OF FUTURE  INCOME TAX
     LIABILITIES OF APPROXIMATELY $71 MILLION IN NORTH AMERICA. INCOME TAX RATE
     CHANGES IN THE FIRST  QUARTER OF 2006  RESULTED  IN AN  INCREASE OF FUTURE
     INCOME TAX LIABILITIES OF APPROXIMATELY  $110 MILLION IN THE UK NORTH SEA.
     INCOME  TAX RATE  CHANGES  IN THE SECOND  QUARTER  OF 2006  RESULTED  IN A
     REDUCTION OF FUTURE INCOME TAX LIABILITIES OF  APPROXIMATELY  $438 MILLION
     IN NORTH  AMERICA.  INCOME TAX RATE  CHANGES IN THE THIRD  QUARTER OF 2006
     RESULTED IN A REDUCTION OF FUTURE INCOME  LIABILITIES OF APPROXIMATELY $67
     MILLION IN COTE D'IVOIRE, OFFSHORE WEST AFRICA.


  CANADIAN NATURAL RESOURCES LIMITED                                        21
================================================================================
<PAGE>

<TABLE>
<CAPTION>
   CASH FLOW FROM OPERATIONS
                                                                           THREE MONTHS ENDED                       YEAR ENDED
                                                              |-----------|                                |----------|
                                                              |    DEC 31 |         SEP 30       DEC 31    |   DEC 31 |     DEC 31
    ($ MILLIONS)                                              |      2007 |           2007         2006    |     2007 |       2006
   -----------------------------------------------------------|-----------|--------------------------------|----------|-----------
<S>                                                            <C>             <C>            <C>           <C>          <C>
    NET EARNINGS                                               $      798      $       700    $     313     $   2,608    $   2,524
    NON-CASH ITEMS:
        DEPLETION, DEPRECIATION AND AMORTIZATION                      719              715          724         2,863        2,391
        ASSET RETIREMENT OBLIGATION ACCRETION                          17               18           18            70           68
        STOCK-BASED COMPENSATION (RECOVERY) EXPENSE                   (16)              78          176           193          139
        UNREALIZED RISK MANAGEMENT LOSS (GAIN)                        845               76         (241)        1,400       (1,013)
        UNREALIZED FOREIGN EXCHANGE (GAIN) LOSS                       (47)            (195)         171          (524)         134
        DEFERRED PETROLEUM REVENUE TAX EXPENSE (RECOVERY)              17               10           (3)           44           37
        FUTURE INCOME TAX (RECOVERY) EXPENSE                         (847)             175          135          (456)         652
   -------------------------------------------------------------------------------------------------------------------------------
    CASH FLOW FROM OPERATIONS                                  $    1,486      $     1,577    $   1,293     $   6,198    $   4,932
   ===============================================================================================================================
</TABLE>

SUMMARY OF CONSOLIDATED NET EARNINGS AND CASH FLOW FROM OPERATIONS

For the year ended  December  31,  2007,  the Company  reported net earnings of
$2,608  million  compared to net earnings of $2,524  million for the year ended
December 31, 2006.  Net earnings for the year ended  December 31, 2007 included
net unrealized  after-tax income of $202 million related to the effects of risk
management  activities,  fluctuations in foreign  exchange  rates,  stock-based
compensation expense and the impact of statutory tax rate and other legislative
changes on future income tax liabilities,  compared to net unrealized after-tax
income of $860 million for the year ended  December 31, 2006.  Excluding  these
items,  adjusted net earnings from  operations  for the year ended December 31,
2007  increased  to $2,406  million  from  $1,664  million  for the year  ended
December  31,  2006.  The  increase  from the prior year was  primarily  due to
increased  sales  volumes,   higher  realized  pricing,   lower  realized  risk
management losses,  and lower income tax expense.  These factors were partially
offset by increased  production  expense,  higher  depletion,  depreciation and
amortization  expense,  higher interest expense, and the impact of the stronger
Canadian dollar relative to the US dollar.

Net earnings for the fourth  quarter of 2007 were $798 million  compared to net
earnings  of $313  million for the fourth  quarter of 2006 and net  earnings of
$700 million for the prior quarter. Net earnings for the fourth quarter of 2007
included net unrealized after-tax income of $252 million related to the effects
of  risk  management  activities,   fluctuations  in  foreign  exchange  rates,
stock-based  compensation  (recovery)  expense and the impact of statutory  tax
rate and other legislative  changes on future income tax liabilities,  compared
to net unrealized  after-tax  expenses of $99 million for the fourth quarter of
2006 and net unrealized  after-tax income of $56 million for the prior quarter.
Excluding  these items,  adjusted net earnings from  operations  for the fourth
quarter of 2007  increased  to $546  million  from $412  million for the fourth
quarter of 2006 and  decreased  from $644  million for the prior  quarter.  The
increase in adjusted net earnings from the fourth quarter of 2006 was primarily
due to the impact of higher realized pricing and decreased  production expense.
These factors were partially  offset by higher realized risk management  losses
and the impact of the stronger  Canadian dollar relative to the US dollar.  The
decrease from the prior  quarter was  primarily due to increased  realized risk
management  losses on crude oil and the impact of the stronger  Canadian dollar
relative  to the US dollar,  partially  offset by higher  realized  pricing and
decreased production costs.

The Company  expects that  consolidated  net earnings  will continue to reflect
significant   quarterly  volatility  due  to  the  impact  of  risk  management
activities,  stock-based  compensation  (recovery)  expense and fluctuations in
foreign exchange rates.

The  Company's  commodity  hedging  program  reduces the risk of  volatility in
commodity  price markets and supports the  Company's  cash flow for its capital
expenditures  throughout  the Horizon  Oil Sands  Project  ("Horizon  Project")
construction  period.  This program  allows for the hedging of up to 75% of the
near 12 months budgeted production,  up to 50% of the following 13 to 24 months
estimated  production and up to 25% of production  expected in months 25 to 48.
For the purpose of this  program,  the  purchase of crude oil put options is in
addition to the above parameters. In accordance with the policy,  approximately
65% of expected crude oil volumes are hedged for 2008 and  approximately 53% of
expected  natural  gas  volumes  are  hedged  for the  first  quarter  of 2008.
Subsequent to December 31, 2007,  the Company  hedged 25,000 bbl/d of crude oil
volumes for 2009 using WTI collars with a US$70.00 floor.


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

The  Company's  outstanding  commodity  related  financial  derivatives  as  at
December 31, 2007 are detailed on page 48 of this MD&A.

As  disclosed  in  note  2 to  the  Company's  unaudited  interim  consolidated
financial  statements,  commencing  January  1, 2007 all  derivative  financial
instruments are recognized at fair value on the  consolidated  balance sheet at
each  balance  sheet date.  As effective  as the  Company's  hedges are against
reference commodity prices, a substantial  portion of the derivative  financial
instruments  entered into by the Company have not been  formally  designated as
hedges  for  accounting  purposes  or do not meet the  requirements  for  hedge
accounting   under  GAAP  due  to  currency,   product   quality  and  location
differentials (the  "non-designated  hedges").  The change in the fair value of
the  non-designated  hedges is based on prevailing  forward commodity prices in
effect at the end of each reporting  period and is reflected in risk management
activities in consolidated net earnings. The cash settlement amount of the risk
management  derivative financial instruments may vary materially depending upon
the underlying crude oil and natural gas prices at the time of final settlement
of the derivative  financial  instruments,  as compared to their mark-to-market
value at December 31, 2007.

Due to the  changes  in crude  oil and  natural  gas  forward  pricing  and the
reversal of prior-period  unrealized  gains and losses,  the Company recorded a
net unrealized loss of $1,400 million ($977 million after-tax) on its commodity
risk management  activities for the year ended December 31, 2007,  including an
$845 million  ($593  million  after-tax)  unrealized  loss for the three months
ended  December 31,  2007.  Mark-to-market  unrealized  gains and losses do not
impact the  Company's  current  cash flow or its  ability  to  finance  ongoing
capital  programs.  The Company  continues to believe that its risk  management
program  meets its objective of securing  funding for its capital  projects and
does not intend to alter its current  strategy of obtaining price certainty for
its crude  oil and  natural  gas  sales.  For  further  details,  refer to Risk
Management Activities on page 38 of this MD&A.

The Company also recorded a $193 million ($134 million  after-tax)  stock-based
compensation  expense as a result of the 17%  increase in the  Company's  share
price for the year ended  December  31,  2007,  and a $16 million  ($11 million
after-tax) stock-based  compensation recovery as a result of the 4% decrease in
the  Company's  share  price for the  three  months  ended  December  31,  2007
(Company's share price as at: December 31, 2007 - C$72.58; September 30, 2007 -
C$75.56; December 31, 2006 - C$62.15). As required by GAAP, the Company records
a liability for  potential  cash  payments to settle its  outstanding  employee
stock  options  each  reporting  period  based on the  difference  between  the
exercise  price of the stock  options  and the  market  price of the  Company's
common shares, pursuant to a graded vesting schedule. The liability is revalued
quarterly  to reflect the changes in the market price of the  Company's  common
shares and the options  exercised or  surrendered  in the period,  with the net
change  recognized  in net  earnings,  or  capitalized  as part of the  Horizon
Project during the construction period. The stock-based  compensation liability
at December 31, 2007 reflected the Company's  potential cash liability assuming
all the vested  options  had been  surrendered  for a cash payout at the market
price on December 31, 2007.  In periods when  substantial  share price  changes
occur,  the Company's net earnings are subject to significant  volatility.  The
Company  utilizes  its  stock-based  compensation  plan to  attract  and retain
employees in a competitive environment. All employees participate in this plan.

Cash flow from  operations  for the year ended  December 31, 2007  increased to
$6,198  million from $4,932  million for the year ended  December 31, 2006. The
increase  from the  comparable  period in 2006 was  primarily  due to increased
sales volumes,  higher  realized  pricing,  and lower realized risk  management
losses,  offset by increased production expense,  higher interest costs, higher
current taxes,  and the impact of the stronger  Canadian dollar relative to the
US dollar.

Cash flow from  operations  for the fourth  quarter of 2007 increased to $1,486
million from $1,293  million for the fourth quarter of 2006, and decreased from
$1,577 million for the prior  quarter.  The increase from the fourth quarter of
2006 was  primarily  due to the  impact of higher  realized  pricing  and lower
production  expense,  partially  offset by increased  realized risk  management
losses  and the  impact of the  stronger  Canadian  dollar  relative  to the US
dollar.  The decrease from the prior quarter was primarily due to lower natural
gas production,  increased realized risk management losses on crude oil, higher
current taxes,  and the impact of the stronger  Canadian dollar relative to the
US  dollar,  partially  offset  by  increased  crude oil  production  and lower
production costs.

Total production before royalties increased 5% to average 609,206 boe/d for the
year ended December 31, 2007 from 580,724 boe/d for the year ended December 31,
2006.  Production  for the fourth quarter of 2007 decreased 2% to 601,908 boe/d
from 613,764 boe/d for the fourth quarter of 2006 and 1% from 607,484 boe/d for
the prior quarter.

  CANADIAN NATURAL RESOURCES LIMITED                                        23
================================================================================
<PAGE>

SUMMARY OF QUARTERLY RESULTS

The  following is a summary of the  Company's  quarterly  results for the eight
most recently completed quarters:

<TABLE>
<CAPTION>
($ millions, except per common share amounts)                 DEC 31              Sep 30             Jun 30             Mar 31
                                                                2007                2007               2007               2007
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                                    <C>                 <C>                  <C>               <C>
Revenue, before royalties                              $       3,200       $       3,073        $     3,152       $      3,118
Net earnings                                           $         798       $         700        $       841       $        269
Net earnings per common share
   - Basic and diluted                                 $        1.48       $        1.30        $      1.56       $       0.50
===============================================================================================================================

                                                              Dec 31              Sep 30             Jun 30             Mar 31
($ millions, except per common share amounts)                   2006                2006               2006               2006
- -------------------------------------------------------------------------------------------------------------------------------
Revenue, before royalties (1)                          $       2,826       $       3,108        $     3,041       $      2,668
Net earnings                                           $         313       $       1,116        $     1,038       $         57
Net earnings per common share
   - Basic and diluted                                 $        0.58       $        2.08        $      1.93       $       0.11
===============================================================================================================================
</TABLE>
(1)  BLENDING  COSTS THAT WERE NETTED  AGAINST GROSS  REVENUES IN PRIOR PERIODS
     HAVE  BEEN  RECLASSIFIED  TO  TRANSPORTATION  EXPENSE  TO  CONFORM  TO THE
     PRESENTATION ADOPTED IN THE FOURTH QUARTER OF 2006.

Net  earnings  over  the  eight  most  recently  completed  quarters  generally
reflected   fluctuations   in  realized  crude  oil  and  natural  gas  prices,
fluctuations  in sales  volumes,  the impact of  mark-to-market  accounting  of
financial  instruments,  increased  depletion,  depreciation  and  amortization
charges,  and adjustments to future income tax liabilities due to statutory tax
rate and other legislative changes. More specifically,  volatility in quarterly
net earnings was primarily due to:

o    Crude oil pricing

     Crude  oil  prices   reflected   demand  growth,   continued   geopolitical
     uncertainties and fluctuations in the Heavy Crude Oil Differential from WTI
     ("Heavy Differential") in North America.

o    Natural gas pricing

     Natural gas prices primarily  reflected  fluctuations in demand for natural
     gas and high inventory  storage levels as a result of  seasonality,  milder
     overall weather  experienced during 2007 and 2006, and increased  liquefied
     natural gas imports into the US during the first half of 2007.

o    Crude oil and NGLs sales volumes

     Crude oil and NGLs sales volumes primarily reflected  increased  production
     from the Company's Primrose thermal projects,  the results from the Pelican
     Lake water and polymer flood projects, development of West and East Espoir,
     and additional sales volumes from the Anadarko Canada  Corporation  ("ACC")
     acquisition completed in the fourth quarter of 2006.

o    Natural gas sales volumes

     Natural  gas sales  volumes  primarily  reflected  additional  natural  gas
     volumes as a result of the ACC acquisition and internally generated growth.
     The  increases  were  partially  offset by  production  declines due to the
     Company's strategic reduction in natural gas drilling activity.

o    Foreign exchange rates

     A general  strengthening  of the Canadian  dollar relative to the US dollar
     has decreased the realized price the Company received for its crude oil and
     natural gas sales,  as sales  prices are based  predominately  on US dollar
     denominated  benchmarks.  Similarly,  unrealized foreign exchange gains and
     losses were  recorded with respect to US dollar  denominated  debt balances
     and  the   re-measurement  of  North  Sea  future  income  tax  liabilities
     denominated  in UK pounds  sterling to US dollars,  offset by the impact of
     cross currency swaps.


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

o    Commodity hedges

     Net  earnings  have  fluctuated  due to the  recognition  of  realized  and
     unrealized  gains  and  losses  from the  mark-to-market  of the  Company's
     commodity hedges.

o    Changes in income tax expense

     Income tax expense and recovery fluctuations include statutory tax rate and
     other legislative  changes enacted or substantively  enacted in the various
     periods.

o    Stock-based compensation

     Net  earnings  have  fluctuated  due to the  recognition  of  realized  and
     unrealized expenses and recoveries from the mark-to-market of the Company's
     stock-based   compensation  liability.   Stock-based  compensation  expense
     reflected  fluctuations  in the  Company's  share price over the eight most
     recently completed quarters.

o    Production expense

     Production expense has fluctuated  company-wide primarily due to production
     growth and industry-wide inflationary cost pressures in all segments.

o    Depletion, depreciation and amortization

     Depletion,  depreciation and amortization  expense has increased  primarily
     due to overall  increases in finding and development  costs associated with
     crude oil and natural gas exploration,  increased estimated future costs to
     develop the Company's proved undeveloped  reserves,  and a higher depletion
     base in North  America  related to the ACC  acquisition,  together with the
     impact of higher sales volumes.

<TABLE>
<CAPTION>
OPERATING HIGHLIGHTS

                                                                      Three Months Ended                      Year Ended
                                                  |-----------|                                   |-----------|
                                                  |    DEC 31 |       Sep 30           Dec 31     |    DEC 31 |         Dec 31
                                                  |      2007 |         2007             2006     |      2007 |           2006
- --------------------------------------------------|-----------|-----------------------------------|-----------|----------------
<S>                                                <C>            <C>             <C>              <C>             <C>
Crude oil and NGLs ($/bbl) (1)
Sales price (2)                                    $    58.03     $    58.10      $     47.27      $    55.45      $     53.65
Royalties                                                6.66           6.65             4.10            5.94             4.48
Production expense                                      11.53          13.13            12.32           13.34            12.29
- -------------------------------------------------------------------------------------------------------------------------------
Netback                                            $    39.84     $    38.32      $     30.85      $    36.17      $     36.88
- -------------------------------------------------------------------------------------------------------------------------------
Natural gas ($/mcf) (1)
Sales price (2)                                    $     6.28     $     5.87      $      6.66      $     6.85      $      6.72
Royalties                                                0.94           0.89             1.26            1.11             1.29
Production expense                                       0.91           0.88             0.86            0.91             0.82
- -------------------------------------------------------------------------------------------------------------------------------
Netback                                            $     4.43     $     4.10      $      4.54      $     4.83      $      4.61
- -------------------------------------------------------------------------------------------------------------------------------
Barrels of oil equivalent ($/boe) (1)
Sales price (2)                                    $    49.23     $    47.96      $     43.91      $    49.05      $     47.92
Royalties                                                6.21           6.07             5.62            6.26             5.89
Production expense                                       8.85           9.62             9.16            9.75             9.14
- -------------------------------------------------------------------------------------------------------------------------------
Netback                                            $    34.17     $    32.27      $     29.13      $    33.04      $     32.89
===============================================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.
(2)  NET OF  TRANSPORTATION  AND BLENDING COSTS AND EXCLUDING  RISK  MANAGEMENT
     ACTIVITIES.


  CANADIAN NATURAL RESOURCES LIMITED                                        25
================================================================================
<PAGE>

<TABLE>
<CAPTION>
BUSINESS ENVIRONMENT

                                                                     Three Months Ended                          Year Ended
                                                 |-----------|                                      |-----------
                                                 |    DEC 31 |         Sep 30           Dec 31      |    DEC 31 |         Dec 31
                                                 |      2007 |           2007             2006      |      2007 |           2006
- -------------------------------------------------|-----------|--------------------------------------|-----------|----------------
<S>                    <C>                        <C>              <C>              <C>              <C>              <C>
WTI benchmark price (US$/bbl)                     $    90.63       $    75.33       $    60.21       $    72.40       $     66.25
Dated Brent benchmark price (US$/bbl)             $    88.65       $    74.85       $    59.68       $    72.59       $     65.18
Differential to LLB blend (US$/bbl)               $    34.07       $    22.69       $    21.31       $    23.05       $     21.69
LLB blend differential from WTI (%)                      38%              30%              35%              32%               33%
Condensate benchmark price (US$/bbl)              $    90.89       $    75.93       $    59.59       $    72.88       $     66.24
NYMEX benchmark price (US$/mmbtu)                 $     7.03       $     6.13       $     6.61       $     6.92       $      7.26
AECO benchmark price (C$/GJ)                      $     5.69       $     5.32       $     6.03       $     6.26       $      6.62
US / Cdn dollar average exchange rate             $   1.0193       $   0.9565       $   0.8781       $   0.9304       $    0.8818
=================================================================================================================================
</TABLE>

COMMODITY PRICES

Crude oil sales  contracts in the North America  segment are typically based on
WTI  benchmark  pricing.  WTI  averaged  US$72.40  per bbl for the  year  ended
December 31, 2007,  an increase of 9% from  US$66.25 per bbl for the year ended
December 31, 2006. For the fourth  quarter of 2007,  WTI averaged  US$90.63 per
bbl, an increase of 51% from  US$60.21 per bbl for the fourth  quarter of 2006,
and an increase of 20% from US$75.33 per bbl for the prior  quarter.  Increases
in WTI pricing in the fourth  quarter  reflected  continued  strong  demand for
crude oil and  continued  geopolitical  events  resulting in  increased  market
uncertainty and price volatility. The WTI reference price, in relation to other
world  benchmark  crude  oils,  also  benefited  from the easing of  logistical
constraints  experienced  during the second  quarter,  particularly at Cushing,
Oklahoma.

Crude oil sales  contracts for the Company's North Sea and Offshore West Africa
segments are typically based on Brent pricing,  which continued to benefit from
strong  European  and Asian  demand in 2007.  Dated  Brent  ("Brent")  averaged
US$72.59 per bbl for the year ended  December 31, 2007, an increase of 11% from
US$65.18 per bbl for the year ended  December 31, 2006.  For the fourth quarter
of 2007,  Brent  averaged  US$88.65  per bbl, an  increase  of 49%  compared to
US$59.68  per bbl for the fourth  quarter of 2006,  and an increase of 18% from
US$74.85  per bbl  for the  prior  quarter.  During  the  fourth  quarter,  the
differential  between  Brent  and WTI  returned  to more  historical  levels as
logistical constraints at Cushing, Oklahoma were resolved.

Company-wide,  realized  crude oil prices for the year ended  December 31, 2007
increased  slightly as a result of higher  benchmark WTI pricing and a narrower
Heavy Differential in North America.  The Heavy  Differential  averaged 32% for
the year ended  December 31, 2007  compared to 33% for the year ended  December
31, 2006. For the fourth quarter of 2007, the Heavy  Differential  averaged 38%
compared  to 35% for the fourth  quarter  of 2006.  The  widening  of the Heavy
Differential  from the comparable period in 2006 was primarily due to increased
heavy crude oil  production  from  Western  Canada and  reduced  demand from US
Midwest  refineries due to plant  maintenance and unplanned  outages.  In 2007,
realized  prices  continued to be adversely  impacted by the stronger  Canadian
dollar.

The  Company  anticipates   continued  volatility  in  the  crude  oil  pricing
benchmarks due to the unpredictable nature of geopolitical events and potential
unplanned  refinery outages.  The Heavy Differential is expected to continue to
reflect seasonal demand fluctuations and refinery cracking margins.


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

NYMEX natural gas prices averaged US$6.92 per mmbtu for the year ended December
31, 2007,  a decrease of 5% from US$7.26 per mmbtu for the year ended  December
31, 2006.  For the fourth quarter of 2007, the NYMEX natural gas price averaged
US$7.03  per mmbtu,  an  increase  of 6% from  US$6.61 per mmbtu for the fourth
quarter of 2006,  and an increase  of 15% from  US$6.13 per mmbtu for the prior
quarter.  AECO natural gas prices  decreased 5% to average $6.26 per GJ for the
year  ended  December  31,  2007,  compared  to $6.62 per GJ for the year ended
December  31,  2006.  For the fourth  quarter of 2007 AECO  natural  gas prices
averaged  $5.69  per GJ, a  decrease  of 6% from  $6.03  per GJ for the  fourth
quarter of 2006, and an increase of 7% from $5.32 per GJ for the prior quarter.
Fluctuations  in natural  gas prices from the  comparable  periods in 2006 were
primarily related to lower overall demand and higher storage levels,  resulting
from the  milder  weather,  reduced  economic  activity  in the US,  and higher
liquefied  natural gas imports  into the US in the first half of 2007.  Natural
gas inventory levels in North America  continued to remain high throughout 2007
due to stable  production  levels in the US, offset by  production  declines in
Canada due to reduced drilling activity.

OPERATING, ROYALTY AND CAPITAL COSTS

Strong  commodity  prices in recent years have resulted in increased demand and
costs for oilfield services worldwide.  This has lead to inflationary operating
and capital cost  pressures  throughout the North America crude oil and natural
gas  industry,  particularly  related  to  drilling  activities  and oil  sands
developments. The strong commodity price environment has also impacted costs in
international  basins,  due in  large  part to the  high  demand  for  offshore
drilling rigs.

The crude oil and natural  gas  industry is also  experiencing  cost  pressures
related   to   environmental   regulations,   both   in   North   America   and
internationally.  In Canada, the Federal government has indicated its intent to
develop  regulations  that  would be in  effect in 2010 to  address  industrial
greenhouse  gas ("GHG")  emissions.  The Federal  Government  has also outlined
national  and  sectoral   reduction  targets  for  several  categories  of  air
pollutants.  In  Alberta,  GHG  regulations  came  into  effect  July 1,  2007,
affecting facilities emitting more than 100 kilotonnes of CO2 annually.  In the
UK, GHG regulations  have been in effect since 2005. The Company has strategies
in  place to  ensure  compliance  with  any  requirements  now in  effect.  The
additional requirements of enacted and proposed GHG legislation will add to the
cost of executing projects company-wide.

Continued  cost  pressures  and the final  outcome of changes to  environmental
regulations may adversely impact the Company's  future net earnings,  cash flow
and capital projects.

Further, on October 25, 2007, the Province of Alberta issued certain details of
its proposed  changes to the Alberta crude oil and natural gas royalty  regime,
effective January 1, 2009. These proposed changes include:

o    The implementation of a sliding scale for oil sands royalties ranging from
     1% to 9% on a  gross  revenue  basis  pre-payout  and  25% to 40% on a net
     revenue basis post-payout depending on benchmark crude oil pricing; and

o    New royalty formulas for  conventional  crude oil and natural gas that are
     to operate on sliding  scales  ranging up to 50%  determined  by commodity
     prices and well productivity.

The Company is currently  awaiting  finalization of the royalty  implementation
regulations,  however  it  expects  that its 2009 and  future  Alberta  royalty
payments will increase as a result of the proposed royalty changes and that its
level of  activity  in  Alberta  in  aggregate  will be  reduced  from  what it
otherwise would have been in the absence of such royalty changes.



  CANADIAN NATURAL RESOURCES LIMITED                                        27
================================================================================
<PAGE>

<TABLE>
<CAPTION>
PRODUCT PRICES

                                                          Three Months Ended                         Year Ended
                                          |-----------|                                 |------------|
                                          |    DEC 31 |       Sep 30         Dec 31     |     DEC 31 |         Dec 31
                                          |      2007 |         2007           2006     |       2007 |           2006
- ------------------------------------------|-----------|---------------------------------|------------|----------------
<S>                                        <C>            <C>            <C>             <C>                <C>
CRUDE OIL AND NGLS ($/bbl) (1) (2)
North America                              $    50.49     $    52.47     $    40.27      $     49.16        $    46.52
North Sea                                  $    83.44     $    77.55     $    67.72      $     74.99        $    72.62
Offshore West Africa                       $    81.89     $    70.52     $    63.50      $     71.68        $    67.99
Company average                            $    58.03     $    58.10     $    47.27      $     55.45        $    53.65

NATURAL GAS ($/mcf) (1) (2)
North America                              $     6.31     $     5.88     $     6.70      $      6.87        $     6.77
North Sea                                  $     3.62     $     5.26     $     3.48      $      4.26        $     2.66
Offshore West Africa                       $     5.49     $     5.31     $     5.72      $      5.68        $     5.37
Company average                            $     6.28     $     5.87     $     6.66      $      6.85        $     6.72

COMPANY AVERAGE ($/boe) (1) (2)            $    49.23     $    47.96     $    43.91      $     49.05        $    47.92

PERCENTAGE OF GROSS REVENUE (2)
      (excluding midstream revenue)
Crude oil and NGLs                                66%            67%            60%              62%               64%
Natural gas                                       34%            33%            40%              38%               36%
======================================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.
(2)  NET OF  TRANSPORTATION  AND BLENDING COSTS AND EXCLUDING  RISK  MANAGEMENT
     ACTIVITIES.

The Company's  realized crude oil prices increased 3% to average $55.45 per bbl
for the year ended  December  31,  2007 from  $53.65 per bbl for the year ended
December 31,  2006.  Realized  crude oil prices for the fourth  quarter of 2007
increased  23% to  average  $58.03  per bbl from  $47.27 per bbl for the fourth
quarter of 2006,  and  decreased  marginally  from $58.10 per bbl for the prior
quarter.  The Company's realized crude oil prices increased from the comparable
periods in 2006 as a result of higher benchmark WTI pricing,  largely offset by
the impact of the stronger Canadian dollar. The decrease from the prior quarter
primarily  reflected the widening of the Heavy  Differential  and the impact of
the stronger Canadian dollar, partially offset by higher benchmark WTI pricing.

The Company's  realized natural gas price increased 2% to average $6.85 per mcf
for the year  ended  December  31,  2007 from  $6.72 per mcf for the year ended
December  31,  2006.  In the fourth  quarter of 2007,  the  Company's  realized
natural gas price  decreased 6% to average  $6.28 per mcf from $6.66 per mcf in
the fourth  quarter of 2006,  and increased 7% from $5.87 per mcf for the prior
quarter. Fluctuations in natural gas prices from the comparable periods in 2006
and the third  quarter  of 2007 were  primarily  related  to the impact of both
weather and storage levels.

NORTH AMERICA

North America  realized crude oil prices increased 6% to average $49.16 per bbl
for the year ended  December  31,  2007 from  $46.52 per bbl for the year ended
December 31,  2006.  Realized  crude oil prices for the fourth  quarter of 2007
averaged  $50.49 per bbl,  a 25%  increase  from  $40.27 per bbl for the fourth
quarter of 2006,  and  decreased 4% from $52.47 per bbl for the prior  quarter.
The increase in realized  crude oil prices from the fourth  quarter of 2006 was
due to the increase in WTI benchmark  pricing,  largely offset by the impact of
the stronger Canadian dollar and the widening of the Heavy Differential,  while
the decrease from the prior quarter was due to the widening Heavy  Differential
and the  impact of the  stronger  Canadian  dollar  relative  to the US dollar,
partially offset by the increase in WTI benchmark pricing.


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

In North  America,  the Company  continues to focus on its crude oil  marketing
strategy, including the development of a blending strategy that expands markets
within current pipeline infrastructure,  supporting pipeline projects that will
provide  capacity to  transport  crude oil to new  markets,  and  working  with
refiners to add  incremental  heavy crude oil conversion  capacity.  During the
fourth quarter,  the Company contributed  approximately  155,000 bbl/d of heavy
crude oil blends to the Western Canadian Select stream.

North America realized natural gas prices increased 1% to average $6.87 per mcf
for the year  ended  December  31,  2007 from  $6.77 per mcf for the year ended
December 31, 2006.  The  realized  natural gas price for the fourth  quarter of
2007  averaged  $6.31 per mcf, a 6% decrease  from $6.70 per mcf for the fourth
quarter of 2006,  and a 7% increase  from $5.88 per mcf for the prior  quarter.
Fluctuations in natural gas prices from the comparable  periods in 2006 and the
third  quarter of 2007 were  primarily  related  to the  impact of weather  and
storage levels.

A comparison of the price received for the Company's  North America  production
by product type is as follows:

<TABLE>
<CAPTION>
                                                            |-------------|
                                                            |      DEC 31 |              Sep 30               Dec 31
                                                            |        2007 |                2007                 2006
- ------------------------------------------------------------|-------------|------------------------------------------
<S>                                                          <C>                 <C>                  <C>
Wellhead Price (1) (2)
           Light / medium crude oil and NGLs (C$/bbl)        $       74.96       $        67.55       $        54.11
           Pelican Lake crude oil (C$/bbl)                   $       47.01       $        48.91       $        37.89
           Primary heavy crude oil (C$/bbl)                  $       43.30       $        47.47       $        36.16
           Thermal heavy crude oil (C$/bbl)                  $       42.76       $        48.99       $        36.06
                     Natural gas (C$/mcf)                    $        6.31       $         5.88       $         6.70
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  NET OF  TRANSPORTATION  AND BLENDING COSTS AND EXCLUDING  RISK  MANAGEMENT
     ACTIVITIES.
(2)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.


NORTH SEA

North Sea realized crude oil prices  increased 3% to average $74.99 per bbl for
the year  ended  December  31,  2007  from  $72.62  per bbl for the year  ended
December 31,  2006.  Realized  crude oil prices for the fourth  quarter of 2007
averaged  $83.44 per bbl,  a 23%  increase  from  $67.72 per bbl for the fourth
quarter of 2006,  and an 8% increase from $77.55 per bbl for the prior quarter.
Realized crude oil prices in the North Sea during the fourth quarter  continued
to  benefit  from the impact of strong  European  and Asian  demand,  partially
offset by the impact of the stronger Canadian dollar relative to the US dollar.

OFFSHORE WEST AFRICA

Offshore West Africa  realized crude oil prices  increased 5% to average $71.68
per bbl for the year ended  December  31, 2007 from $67.99 per bbl for the year
ended  December 31, 2006.  Realized  crude oil prices for the fourth quarter of
2007 averaged $81.89 per bbl, a 29% increase from $63.50 per bbl for the fourth
quarter of 2006,  and a 16% increase from $70.52 per bbl for the prior quarter.
As all revenue in Offshore  West Africa is currently  recognized  on a liftings
basis,  realized  crude oil  prices per barrel in any  particular  quarter  are
dependant on the frequency and timing of liftings of each field, as well as the
terms of the related  sales  contracts.  Realized  crude oil prices in Offshore
West Africa during the fourth  quarter  continued to benefit from the impact of
strong European and Asian demand, offset by the impact of the stronger Canadian
dollar relative to the US dollar.


  CANADIAN NATURAL RESOURCES LIMITED                                        29
================================================================================
<PAGE>

CRUDE OIL INVENTORY VOLUMES

The Company recognizes revenue on its crude oil production when title transfers
to the customer and delivery has taken place.  The related  crude oil inventory
volumes by segment, which have not been recognized in revenue, were as follows:

<TABLE>
<CAPTION>
                                                                                |------------|
                                                                                |     DEC 31 |         Sep 30             Dec 31
(bbl)                                                                           |       2007 |           2007               2006
- --------------------------------------------------------------------------------|------------|-----------------------------------
<S>                                                                              <C>              <C>                <C>
North America, related to pipeline fill                                            1,097,526        1,097,526          1,097,526
North Sea, related to timing of liftings                                           1,032,723          260,648            910,796
Offshore West Africa, related to timing of liftings                                    8,578          587,486            113,774
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                   2,138,827        1,945,660          2,122,096
=================================================================================================================================
</TABLE>

In the fourth quarter of 2007, net production of approximately  193,000 barrels
of crude oil produced in the Company's  international  operations  was deferred
and included in inventory at December 31, 2007. Notwithstanding the increase in
inventory,  cash flow from operations  increased by approximately $8 million in
the fourth quarter of 2007 as increased cash flow derived from additional sales
volumes in Offshore West Africa more than offset the decrease in cash flows due
to lower sales volumes in the North Sea.

<TABLE>
<CAPTION>
DAILY PRODUCTION, BEFORE ROYALTIES

                                                                           Three Months Ended                      Year Ended
                                                           |----------|                                  |---------|
                                                           |   DEC 31 |       Sep 30        Dec 31       |  DEC 31 |       Dec 31
                                                           |     2007 |         2007          2006       |    2007 |         2006
- -----------------------------------------------------------|----------|----------------------------------|---------|--------------
<S>                                                           <C>            <C>           <C>             <C>            <C>
CRUDE OIL AND NGLS (bbl/d)
North America                                                 256,843        252,095       249,565         246,779        235,253
North Sea                                                      52,709         52,013        61,786          55,933         60,056
Offshore West Africa                                           27,688         28,954        32,354          28,520         36,689
- ----------------------------------------------------------------------------------------------------------------------------------
                                                              337,240        333,062       343,705         331,232        331,998
- ----------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS (mmcf/d)
North America                                                   1,562          1,622         1,594           1,643          1,468
North Sea                                                          13             10            16              13             15
Offshore West Africa                                               14             15            10              12              9
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                1,589          1,647         1,620           1,668          1,492
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL BARREL OF OIL EQUIVALENT (boe/d)                        601,908        607,484       613,764         609,206        580,724
- ----------------------------------------------------------------------------------------------------------------------------------
PRODUCT MIX
Light/medium crude oil and NGLs                                   23%            22%           24%             23%            26%
Pelican Lake crude oil                                             6%             6%            5%              6%             5%
Primary heavy crude oil                                           15%            16%           15%             15%            16%
Thermal heavy crude oil                                           12%            11%           12%             11%            11%
Natural gas                                                       44%            45%           44%             45%            42%
==================================================================================================================================
</TABLE>


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

<TABLE>
<CAPTION>
DAILY PRODUCTION, NET OF ROYALTIES

                                                                        Three Months Ended                          Year Ended
                                                        |----------|                                  |----------|
                                                        |   DEC 31 |        Sep 30        Dec 31      |   DEC 31 |        Dec 31
                                                        |     2007 |          2007          2006      |     2007 |          2006
- --------------------------------------------------------|----------|----------------------------------|----------|---------------
<S>                                                      <C>             <C>           <C>             <C>             <C>
CRUDE OIL AND NGLS (bbl/d)
North America                                              217,886         213,680       217,751         210,769         205,382
North Sea                                                   52,586          51,917        61,658          55,825          59,940
Offshore West Africa                                        25,123          26,158        30,817          26,012          35,212
- ---------------------------------------------------------------------------------------------------------------------------------
                                                           295,595         291,755       310,226         292,606         300,534
- ---------------------------------------------------------------------------------------------------------------------------------
NATURAL GAS (mmcf/d)
North America                                                1,327           1,373         1,291           1,378           1,185
North Sea                                                       13              10            16              13              15
Offshore West Africa                                            12              14             9              11               9
- ---------------------------------------------------------------------------------------------------------------------------------
                                                             1,352           1,397         1,316           1,402           1,209
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL BARREL OF OIL EQUIVALENT (boe/d)                     520,887         524,417       529,515         526,193         502,024
=================================================================================================================================
</TABLE>

Daily production and per barrel  statistics are presented  throughout this MD&A
on a "before  royalty" or "gross"  basis.  Production on an "after  royalty" or
"net" basis is also presented.

The Company's  business  approach is to maintain large project  inventories and
production  diversification  among each of the commodities it produces;  namely
natural gas,  light/medium  crude oil and NGLs, Pelican Lake crude oil, primary
heavy crude oil and thermal heavy crude oil.

Total production averaged 609,206 boe/d for the year ended December 31, 2007, a
5%  increase  from the year ended  December  31,  2006.  Fourth  quarter  total
production in 2007 averaged  601,908 boe/d, a decrease of 2% from 613,764 boe/d
for the fourth quarter of 2006, and a decrease of 1% from 607,484 boe/d for the
prior quarter.

Total  crude oil and NGLs  production  for the year  ended  December  31,  2007
decreased  marginally  to 331,232  bbl/d from 331,998  bbl/d for the year ended
December 31, 2006. For the fourth quarter of 2007,  production  decreased 2% to
337,240 bbl/d from 343,705  bbl/d for the fourth  quarter of 2006 and increased
1% from 333,062 bbl/d for the prior  quarter.  The decrease from the comparable
periods of 2006 was primarily  due to lower  production in the North Sea due to
the timing of planned  maintenance  activities and reduced  production from the
Baobab Field in Offshore West Africa,  offset by increased  production in North
America. Crude oil and NGLs production in the fourth quarter of 2007 was within
the Company's previously issued guidance of 321,000 to 344,000 bbl/d.

Natural gas  production  continued to represent the Company's  largest  product
offering in 2007, accounting for 45% of the Company's total production. Natural
gas  production  for the year ended  December  31, 2007  averaged  1,668 mmcf/d
compared to 1,492 mmcf/d for the year ended  December 31, 2006.  For the fourth
quarter of 2007, natural gas production averaged 1,589 mmcf/d compared to 1,620
mmcf/d for the fourth  quarter of 2006 and 1,647 mmcf/d for the prior  quarter.
Natural gas production  generally reflects peak production levels in the spring
of each year due to the higher  proportion of wells  drilled  during the winter
months, followed by natural production declines throughout the remainder of the
year.  The decrease in natural gas  production  from the fourth quarter of 2006
and the  prior  quarter  primarily  reflected  production  declines  due to the
Company's strategic reduction in natural gas drilling activity.  Fourth quarter
natural gas production was within the Company's  previously  issued guidance of
1,577 to 1,616 mmcf/d.

For 2008, annual production guidance is targeted to average between 316,000 and
366,000  bbl/d of crude oil and NGLs and  between  1,429  and  1,513  mmcf/d of
natural  gas.  First  quarter 2008  production  guidance is targeted to average
between  315,000 and 331,000  bbl/d of crude oil and NGLs and between 1,522 and
1,557 mmcf/d of natural gas.


  CANADIAN NATURAL RESOURCES LIMITED                                        31
================================================================================
<PAGE>

NORTH AMERICA

North America  crude oil and NGLs  production  for the year ended  December 31,
2007 increased 5% to average  246,779 bbl/d, up from 235,253 bbl/d for the year
ended December 31, 2006. Production for the fourth quarter of 2007 increased 3%
to average 256,843 bbl/d from 249,565 bbl/d for the fourth quarter of 2006, and
increased 2% from 252,095  bbl/d for the prior  quarter.  The increase in crude
oil and NGLs production from the prior periods was primarily due to the results
from the Pelican Lake project and the cyclic  nature of the  Company's  thermal
production.

North America natural gas production  increased 12% to average 1,643 mmcf/d for
the year ended  December  31,  2007,  up from  1,468  mmcf/d for the year ended
December  31,  2006.  For the fourth  quarter of 2007,  natural gas  production
decreased 2% to 1,562 mmcf/d from 1,594 mmcf/d for the fourth  quarter of 2006,
and  decreased  4% from 1,622  mmcf/d for the prior  quarter.  The  increase in
natural gas production from the year ended December 31, 2006 reflected the full
year impact of the ACC  acquisition,  partially  offset by production  declines
throughout 2007 due to the Company's  strategic  decision to reduce natural gas
drilling activity.


NORTH SEA

North  Sea crude  oil  production  averaged  55,933  bbl/d  for the year  ended
December  31,  2007,  a  decrease  of 7% from  60,056  bbl/d for the year ended
December  31,  2006.  Crude  oil  production  for the  fourth  quarter  of 2007
decreased 15% to 52,709 bbl/d from 61,786 bbl/d for the fourth  quarter of 2006
and increased  marginally  from 52,013 bbl/d for the prior quarter.  Production
levels for the fourth quarter of 2007 were in line with expectations,  with the
increase from the prior quarter  primarily  related to the planned  maintenance
shutdowns  carried out in the third  quarter and the  successful  resolution of
water injection problems previously experienced at Ninian.


OFFSHORE WEST AFRICA

Offshore West Africa crude oil production decreased 22% to average 28,520 bbl/d
for the year  ended  December  31,  2007 from  36,689  bbl/d for the year ended
December 31, 2006. Fourth quarter 2007 production decreased 14% to 27,688 bbl/d
from 32,354 bbl/d for the fourth quarter of 2006, and was marginally  down from
28,954 bbl/d for the prior  quarter.  Production  decreased from the comparable
periods in 2006 due to continued  challenges with sand production at the Baobab
Field where 5 of 10 production  wells remain shut in. The Company has secured a
deepwater  rig,  expected in mid-year  2008,  that should enable the Company to
execute its plan to return certain of the shut in wells to production  over the
course of 2008 and 2009.



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

<TABLE>
<CAPTION>
ROYALTIES

                                                               Three Months Ended                                    Year Ended
                                            |------------|                                        |-------------|
                                            |     DEC 31 |           Sep 30            Dec 31     |      DEC 31 |         Dec 31
                                            |       2007 |             2007              2006     |        2007 |           2006
- --------------------------------------------|------------|----------------------------------------|-------------|----------------
<S>                                          <C>               <C>                <C>              <C>               <C>
CRUDE OIL AND NGLS ($/bbl) (1)
North America                                $      7.66       $       8.00       $      5.13      $       7.19      $      5.86
North Sea                                    $      0.19       $       0.14       $      0.14      $       0.14      $      0.13
Offshore West Africa                         $      7.59       $       6.81       $      3.02      $       6.40      $      2.81
Company average                              $      6.66       $       6.65       $      4.10      $       5.94      $      4.48

NATURAL GAS ($/mcf) (1)
North America                                $      0.95       $       0.90       $      1.29      $       1.12      $      1.31
North Sea                                    $         -       $          -       $         -      $          -      $         -
Offshore West Africa                         $      0.52       $       0.51       $      0.27      $       0.51      $      0.22
Company average                              $      0.94       $       0.89       $      1.26      $       1.11      $      1.29

COMPANY AVERAGE ($/boe) (1)                  $      6.21       $       6.07       $      5.62      $       6.26      $      5.89

PERCENTAGE OF REVENUE (2)
Crude oil and NGLs                                   11%                11%                9%               11%               8%
Natural gas                                          15%                15%               19%               16%              19%
Boe                                                  13%                13%               13%               13%              12%
=================================================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.
(2)  NET OF  TRANSPORTATION  AND BLENDING COSTS AND EXCLUDING  RISK  MANAGEMENT
     ACTIVITIES.

NORTH AMERICA

North America crude oil and NGLs  royalties per bbl for the year ended December
31, 2007 continue to reflect strong realized crude oil prices and the impact of
the full recovery of the Company's  capital  investments  in the Primrose North
and South  Fields in the fourth  quarter  of 2006.  Upon full  recovery,  Crown
royalty  rates on the  Primrose  North and South  Fields  increased  from 1% of
revenue to 25% of revenue less operating,  capital and abandonment costs. Crude
oil and NGLs  royalties  averaged  approximately  15% of revenues  for the year
ended December 31, 2007, compared to 13% for 2006. Crude oil and NGLs royalties
per bbl are anticipated to average 14% to 16% of gross revenue for 2008.

Natural gas  royalties  per mcf  generally  fluctuate  with natural gas prices.
Natural gas  royalties  averaged  approximately  15% of revenues for the fourth
quarter of 2007 compared to 19% for the fourth  quarter of 2006 and 15% for the
prior quarter.  Natural gas royalties decreased in the third and fourth quarter
of 2007  compared  to  prior  periods  in 2006  due to the  impact  of  certain
adjustments,  and are  anticipated  to average 17% to 20% of gross  revenue for
2008.


NORTH SEA

North Sea government  royalties on crude oil were eliminated  effective January
1, 2003.  The  remaining  royalty is a gross  overriding  royalty on the Ninian
Field.



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

<PAGE>


OFFSHORE WEST AFRICA

Offshore  West  Africa  production  is  governed  by the  terms of the  various
Production  Sharing Contracts  ("PSCs").  Under the PSCs,  revenues are divided
into cost  recovery oil and profit oil. Cost recovery oil allows the Company to
recover its capital and  production  costs and the costs carried by the Company
on behalf of the Government  State Oil Company.  Profit oil is allocated to the
joint venture  partners in accordance with their respective  equity  interests,
after a portion has been allocated to the Government. The Government's share of
profit oil attributable to the Company's  equity interest is allocated  between
royalty expense and current income tax expense in accordance with the PSCs. The
Company's capital  investments in the Espoir Fields were fully recovered in the
first quarter of 2007,  increasing  royalty  rates and current  income taxes in
accordance with the terms of the PSCs.

Royalty  rates as a percentage  of revenue  averaged  approximately  9% for the
fourth  quarter of 2007  compared to 5% for fourth  quarter of 2006 and 10% for
the prior quarter. The increase in royalty rates from the comparable period for
2006 was due to the Company's  full  recovery of its capital  investment in the
Espoir  Field in 2007 and the  resulting  increase  in profit  oil on which the
Government's  entitlement  is based.  Offshore  West Africa  royalty  rates are
anticipated to average 12% to 17% of gross revenue for 2008.

<TABLE>
<CAPTION>
PRODUCTION EXPENSE

                                                             Three Months Ended                                  Year Ended
                                               |------------|                                     |------------|
                                               |     DEC 31 |        Sep 30            Dec 31     |     DEC 31 |         Dec 31
                                               |       2007 |          2007              2006     |       2007 |           2006
- -----------------------------------------------|------------|-------------------------------------|------------|----------------
<S>                                             <C>             <C>               <C>              <C>              <C>
CRUDE OIL AND NGLS ($/bbl) (1)
North America                                   $     10.54     $     11.69       $     12.13      $     12.26      $     11.73
North Sea                                       $     18.95     $     23.61       $     14.76      $     20.78      $     17.57
Offshore West Africa                            $      9.32     $      7.00       $     10.05      $      8.32      $      7.45
Company average                                 $     11.53     $     13.13       $     12.32      $     13.34      $     12.29

NATURAL GAS ($/mcf) (1)
North America                                   $      0.90     $      0.87       $      0.84      $      0.90      $      0.81
North Sea                                       $      1.50     $      2.29       $      1.54      $      2.17      $      1.40
Offshore West Africa                            $      1.89     $      1.39       $      2.01      $      1.48      $      1.19
Company average                                 $      0.91     $      0.88       $      0.86      $      0.91      $      0.82

COMPANY AVERAGE ($/boe) (1)                     $      8.85     $      9.62       $      9.16      $      9.75      $      9.14
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

NORTH AMERICA

North America crude oil and NGLs production expense for the year ended December
31, 2007  increased 5% to $12.26 per bbl from $11.73 per bbl for the year ended
December 31, 2006. For the fourth quarter of 2007 production  expense decreased
13% to $10.54 per bbl from  $12.13  per bbl for the fourth  quarter of 2006 and
decreased  10% from  $11.69  per bbl for the prior  quarter.  The  decrease  in
production  expense  per barrel for the fourth  quarter of 2007 was a result of
the timing of primary steam cycles,  lower cost of natural gas for fuel for the
Company's thermal operations, and higher production volumes in Pelican Lake and
thermal production areas, where a large portion of costs are fixed in nature.

North America  natural gas  production  expense for the year ended December 31,
2007  increased  11% to $0.90  per mcf from  $0.81  per mcf for the year  ended
December 31, 2006. For the fourth quarter of 2007 production  expense increased
7% to $0.90 per mcf from $0.84 per mcf for the  fourth  quarter of 2006 and was
up  slightly  from  $0.87  per mcf for  the  prior  quarter.  The  increase  in
production expense per mcf is a result of lower sales volumes on the fixed cost
portion of production  costs,  partially offset by the stabilization of natural
gas well servicing costs in the last half of 2007.


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

NORTH SEA

North Sea crude oil  production  expense  varied on a per barrel basis from the
prior  quarter due to the  completion of planned  maintenance  shutdowns in the
third quarter of 2007,  varying  production  volumes on a relatively fixed cost
base,  the  timing of  liftings  from  various  fields,  and the  impact of the
stronger Canadian dollar.

OFFSHORE WEST AFRICA

Offshore West Africa crude oil production  expense on a per barrel basis varied
from the prior quarter primarily due to the impact of the timing of liftings at
Baobab and Espoir, resulting in a greater proportion of relatively higher fixed
cost Baobab sourced liftings in the quarter.  Production expense was positively
impacted by the impact of the stronger Canadian dollar.

<TABLE>
<CAPTION>
MIDSTREAM

                                                                Three Months Ended                                  Year Ended
                                            |-------------|                                         |------------|
                                            |      DEC 31 |            Sep 30            Dec 31     |     DEC 31 |          Dec 31
($ millions)                                |        2007 |              2007              2006     |       2007 |            2006
- --------------------------------------------|-------------|-----------------------------------------|------------|-----------------
<S>                                          <C>                 <C>               <C>               <C>              <C>
Revenue                                      $         19        $         19      $         18      $        74      $         72
Production expense                                      6                   5                 6               22                23
- -----------------------------------------------------------------------------------------------------------------------------------
Midstream cash flow                                    13                  14                12               52                49
Depreciation                                            2                   2                 2                8                 8
- -----------------------------------------------------------------------------------------------------------------------------------
Segment earnings before taxes                $         11        $         12      $         10      $        44      $         41
===================================================================================================================================
</TABLE>

The Company's midstream assets consist of three crude oil pipeline systems and a
50%  working  interest  in  an  84-megawatt   cogeneration  plant  at  Primrose.
Approximately  80% of the Company's heavy crude oil production is transported to
international  mainline  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 control
the transport of its own production volumes as well as earn third party revenue.
This  transportation  control enhances the Company's  ability to manage the full
range of costs  associated  with the  development  and  marketing of its heavier
crude oil.

<TABLE>
<CAPTION>
DEPLETION, DEPRECIATION AND AMORTIZATION (1)

                                                               Three Months Ended                                  Year Ended
                                            |-------------|                                         |------------|
                                            |      DEC 31 |            Sep 30            Dec 31     |     DEC 31 |          Dec 31
($ millions)                                |        2007 |              2007              2006     |       2007 |            2006
- --------------------------------------------|-------------|-----------------------------------------|------------|-----------------
<S>                                          <C>                 <C>               <C>               <C>              <C>
Expense ($ millions)                         $        717        $        713      $        722      $     2,855      $      2,383
           $/boe (2)                         $      12.99        $      12.68      $      12.80      $     12.84      $      11.27
===================================================================================================================================
</TABLE>
(1)  DD&A EXCLUDES DEPRECIATION ON MIDSTREAM ASSETS.
(2)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

Depletion,  Depreciation and  Amortization  ("DD&A") for the year ended December
31, 2007  increased in total and on a boe basis from the year ended December 31,
2006.  DD&A for the fourth quarter of 2007 was consistent with the prior quarter
and the fourth quarter of 2006. The increase in DD&A expense from the prior year
was  primarily  due to  overall  increases  in  finding  and  development  costs
associated  with crude oil and  natural  gas  exploration,  increased  estimated
future costs to develop the Company's proved undeveloped reserves,  and a higher
depletion base in North America  related to the ACC  acquisition,  together with
the impact of higher sales volumes.


  CANADIAN NATURAL RESOURCES LIMITED                                        35
================================================================================
<PAGE>

<TABLE>
<CAPTION>
ASSET RETIREMENT OBLIGATION ACCRETION

                                                              Three Months Ended                                    Year Ended
                                          |-------------|                                          |-------------|
                                          |      DEC 31 |           Sep 30             Dec 31      |      DEC 31 |           Dec 31
                                          |        2007 |             2007               2006      |        2007 |             2006
- ------------------------------------------|-------------|------------------------------------------|-------------|------------------
<S>                                        <C>                <C>                <C>                <C>                <C>
Expense ($ millions)                       $         17       $         18       $         18       $         70       $         68
           $/boe (1)                       $       0.31       $       0.32       $       0.32       $       0.32       $       0.32
====================================================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

Asset retirement  obligation  accretion  expense  represents the increase in the
carrying amount of the asset  retirement  obligation due to the passage of time.
Accretion  expense  for the  year  and  quarter  ended  December  31,  2007  was
consistent with the comparable periods.

<TABLE>
<CAPTION>
ADMINISTRATION EXPENSE

                                                              Three Months Ended                                    Year Ended
                                          |-------------|                                          |-------------|
                                          |      DEC 31 |           Sep 30             Dec 31      |      DEC 31 |           Dec 31
                                          |        2007 |             2007               2006      |        2007 |             2006
- ------------------------------------------|-------------|------------------------------------------|-------------|------------------
<S>                                        <C>                <C>                <C>                <C>                <C>
Net expense ($ millions)                   $         42       $         53       $         57       $        208       $        180
           $/boe (1)                       $       0.76       $       0.94       $       1.01       $       0.93       $       0.85
====================================================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

Administration  expense for the year ended  December 31, 2007 increased in total
and on a boe basis  from the year  ended  December  31,  2006  primarily  due to
increased  staffing costs,  including costs related to the Company's share bonus
program.  The decrease in administration  expense from the prior quarter in 2007
was primarily due to decreased  insurance costs and lower costs  associated with
employee bonus programs.

<TABLE>
<CAPTION>
STOCK-BASED COMPENSATION (RECOVERY) EXPENSE

                                                              Three Months Ended                                    Year Ended
                                          |-------------|                                          |-------------|
                                          |      DEC 31 |           Sep 30             Dec 31      |      DEC 31 |           Dec 31
($ millions)                              |        2007 |             2007               2006      |        2007 |             2006
- ------------------------------------------|-------------|------------------------------------------|-------------|------------------
<S>                                        <C>                <C>                <C>                <C>                <C>
Stock-based compensation
(recovery) expense                         $       (16)       $         78       $        176       $        193       $       139
====================================================================================================================================
</TABLE>

The Company's Stock Option Plan (the "Option Plan") provides  current  employees
(the "option  holders")  with the right to elect to receive  common  shares or a
direct cash  payment in  exchange  for  options  surrendered.  The design of the
Option Plan  balances  the need for a long-term  compensation  program to retain
employees  with the  benefits  of  reducing  the impact of  dilution  on current
Shareholders and the reporting of the obligations 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 recognized  each period.  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.


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

The  Company  recorded  a $193  million  ($134  million  after-tax)  stock-based
compensation  expense as a result of the 17%  increase  in the  Company's  share
price for the year ended  December  31,  2007,  and a $16 million  ($11  million
after-tax)  stock-based  compensation recovery as a result of the 4% decrease in
the  Company's  share  price  for the  three  months  ended  December  31,  2007
(Company's share price as at: December 31, 2007 - C$72.58;  September 30, 2007 -
C$75.56;  December  31, 2006 -  C$62.15;).  As required by GAAP,  the  Company's
outstanding  stock  options  are  valued  each  reporting  period  based  on the
difference  between the exercise price of the stock options and the market price
of the Company's  common  shares,  pursuant to a graded  vesting  schedule.  The
liability is revalued  quarterly  to reflect  changes in the market price of the
Company's common shares and the options  exercised or surrendered in the period,
with the net  change  recognized  in net  earnings,  or  capitalized  during the
construction  period  in the case of the  Horizon  Project.  For the year  ended
December  31,  2007,  the  Company   capitalized   $58  million  in  stock-based
compensation  on the Horizon  Project  (December  31, 2006 - $79  million).  The
stock-based  compensation  liability  reflected  the  Company's  potential  cash
liability  should all the vested options be surrendered for a cash payout at the
market  price on December  31, 2007.  In periods  when  substantial  stock price
changes occur, the Company is subject to significant earnings volatility.

For the year ended  December 31,  2007,  the Company paid $375 million for stock
options surrendered for cash settlement (December 31, 2006 - $264 million).

<TABLE>
<CAPTION>
INTEREST EXPENSE

                                                                   Three Months Ended                              Year Ended
                                                  |------------|                                     |-----------|
                                                  |     DEC 31 |         Sep 30          Dec 31      |    DEC 31 |         Dec 31
($ millions, except per boe amounts)              |       2007 |           2007            2006      |      2007 |           2006
- --------------------------------------------------|------------|-------------------------------------|-----------|----------------
<S>                                                <C>               <C>             <C>              <C>             <C>
Interest expense, gross                            $       160       $      160      $      128       $      632      $       336
Less: capitalized interest, Horizon Project                109               95              66              356              196
- ----------------------------------------------------------------------------------------------------------------------------------
Interest expense, net                              $        51       $       65      $       62       $      276      $       140
           $/boe (1)                               $      0.92       $     1.15      $     1.08       $     1.24      $      0.66
Average effective interest rate                           5.5%             5.7%            5.6%             5.5%             5.7%
==================================================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

Gross  interest   expense   increased  from  the  comparable   periods  in  2006
substantially  due to increased debt levels  associated with the ACC acquisition
in the  fourth  quarter of 2006 and the  ongoing  financing  of Horizon  Project
capital expenditures.

The Company's average effective interest rate for the periods ended December 31,
2007 reflected the impact of the stronger Canadian dollar, offset by higher cost
US  dollar  denominated  debt  issued  in March  2007 and the  impact  of higher
short-term  lending  rates on the  Company's  floating  rate  debt due to credit
market uncertainty.

In 2008,  on  commencement  of  operations  of Phase 1 of the  Horizon  Project,
interest  capitalization  will cease on this Phase,  increasing interest expense
accordingly.



  CANADIAN NATURAL RESOURCES LIMITED                                        37
================================================================================
<PAGE>

RISK MANAGEMENT ACTIVITIES

The Company utilizes  various  derivative  financial  instruments to manage its
commodity  price,  currency  and  interest  rate  exposures.  These  derivative
financial instruments are not intended for trading or speculative purposes.

As  disclosed  in  note  2 to  the  Company's  unaudited  interim  consolidated
financial  statements,  commencing  January  1, 2007 the  Company  adopted  new
accounting standards issued by the Canadian Institute of Chartered  Accountants
relating to the  accounting  for and  disclosure of financial  instruments  and
comprehensive income.

Adoption  of  these  standards  required  the  Company  to  record  all  of its
derivative  financial  instruments on the balance sheet at estimated fair value
as at January 1, 2007, including those designated as hedges. Designated hedges,
other than cross currency swaps,  were previously not recognized on the balance
sheet  but  were  disclosed  in the  notes  to the  financial  statements.  The
adjustment to recognize the designated hedges on the balance sheet was recorded
as an adjustment  to the opening  balance of retained  earnings or  accumulated
other comprehensive income, as appropriate.

With the  exception  of the  foreign  currency  translation  adjustment,  these
standards  were adopted  prospectively;  accordingly,  comparative  amounts for
prior  periods  have not been  restated.  The  reclassification  of the foreign
currency  translation  adjustment  to other  comprehensive  income was  applied
retroactively with prior period restatement.

The effects of adopting these standards on the opening balance sheet were as
follows:
                                                               |---------------|
($ millions)                                                   |   JAN 1, 2007 |
- -------------------------------------------------------------  |---------------|
Increased current portion of other long-term assets (1)        $           193
Decreased other long-term assets (2)                           $           (16)
Decreased long-term debt (3)                                   $           (72)
Increased retained earnings (4)                                $            10
Increased foreign currency translation adjustment (5)          $            13
Increased accumulated other comprehensive income (6)           $           146
Decreased current portion of future income tax asset (7)       $           (62)
Increased future income tax liability (7)                      $            18
- -------------------------------------------------------------  ---------------

(1)  RELATES TO THE  RECOGNITION  OF THE  CURRENT  PORTION OF THE FAIR VALUE OF
     DERIVATIVE FINANCIAL INSTRUMENTS DESIGNATED AS CASH FLOW HEDGES.

(2)  RELATES TO THE  RECOGNITION OF THE LONG-TERM  PORTION OF THE FAIR VALUE OF
     DERIVATIVE  FINANCIAL  INSTRUMENTS  DESIGNATED AS CASH FLOW AND FAIR VALUE
     HEDGES, AS WELL AS THE  RECLASSIFICATION OF TRANSACTION COSTS AND ORIGINAL
     ISSUE DISCOUNTS FROM DEFERRED CHARGES TO LONG-TERM DEBT.

(3)  RELATES  TO THE FAIR  VALUE  IMPACT OF  DERIVATIVE  FINANCIAL  INSTRUMENTS
     DESIGNATED  AS FAIR  VALUE  HEDGES,  AS WELL  AS THE  RECLASSIFICATION  OF
     TRANSACTION COSTS AND ORIGINAL ISSUE DISCOUNTS.

(4)  RELATES TO THE IMPACT ON ADOPTION OF THE MEASUREMENT OF INEFFECTIVENESS ON
     DERIVATIVE FINANCIAL INSTRUMENTS DESIGNATED AS CASH FLOW HEDGES.

(5)  RELATES TO THE  RETROACTIVE  RESTATEMENT OF FOREIGN  CURRENCY  TRANSLATION
     ADJUSTMENT TO ACCUMULATED OTHER  COMPREHENSIVE  INCOME.

(6)  RELATES TO THE  RECOGNITION  OF  ACCUMULATED  OTHER  COMPREHENSIVE  INCOME
     ARISING FROM THE  MEASUREMENT  OF  EFFECTIVENESS  ON DERIVATIVE  FINANCIAL
     INSTRUMENTS DESIGNATED AS CASH FLOW HEDGES.

(7)  RELATES TO THE FUTURE INCOME TAX IMPACTS OF THE ABOVE NOTED ADJUSTMENTS.


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

Effective  January 1, 2007,  the  Company's  accounting  policies for financial
instruments and comprehensive income are as follows:

All derivative financial  instruments are recognized at estimated fair value on
the  consolidated  balance sheet at each balance sheet date. The estimated fair
value  of  derivative  financial  instruments  has  been  determined  based  on
appropriate  internal valuation  methodologies  and/or third party indications.
However,  these estimates may not necessarily be indicative of the amounts that
could be  realized  or  settled  in a  current  market  transaction  and  these
differences may be material.

The Company formally  documents all derivative  financial  instruments that are
designated   as  hedging   transactions   at  the   inception  of  the  hedging
relationship,  in accordance with the Company's risk management  policies.  The
effectiveness  of the hedging  relationship is evaluated,  both at inception of
the hedge and on an ongoing basis.

The  Company  periodically  enters into  commodity  price  contracts  to manage
anticipated  sales of crude oil and natural gas  production in order to protect
cash flow for capital expenditure programs. The effective portion of changes in
the fair value of derivative  commodity price contracts designated as cash flow
hedges  is  initially   recognized  in  other   comprehensive   income  and  is
reclassified to risk management  activities in consolidated net earnings in the
same  period or  periods  in which the crude oil or  natural  gas is sold.  The
ineffective portion of changes in the fair value of these designated  contracts
is immediately  recognized in risk management  activities in  consolidated  net
earnings. All changes in the fair value of non-designated crude oil and natural
gas commodity price  contracts are recognized in risk management  activities in
consolidated net earnings.

The Company  enters into  interest  rate swap  contracts to manage its fixed to
floating  interest rate mix on certain of its long-term debt. The interest rate
swap contracts  require the periodic  exchange of payments without the exchange
of the notional  principal amounts on which the payments are based.  Changes in
the fair value of interest rate swap contracts  designated as fair value hedges
and  corresponding  changes in the fair value of the hedged  long-term debt are
included in interest expense in consolidated net earnings.  Changes in the fair
value of  non-designated  interest  rate swap  contracts  are  included in risk
management activities in consolidated net earnings.

Cross currency swap contracts are periodically used to manage currency exposure
on US dollar  denominated  long-term  debt.  The cross  currency swap contracts
require the  periodic  exchange of  payments  with the  exchange at maturity of
notional principal amounts on which the payments are based. Changes in the fair
value of the  foreign  exchange  component  of cross  currency  swap  contracts
designated as cash flow hedges are included in foreign exchange in consolidated
net  earnings.  The  effective  portion  of  changes  in the fair  value of the
interest rate  component of cross  currency swap  contracts  designated as cash
flow  hedges  is  initially  included  in  other  comprehensive  income  and is
reclassified to interest  expense when realized,  with the ineffective  portion
immediately  recognized  in risk  management  activities  in  consolidated  net
earnings.  Changes  in the fair value of  non-designated  cross  currency  swap
contracts  are  included in risk  management  activities  in  consolidated  net
earnings.

Gains or losses on the  termination  of  financial  instruments  that have been
designated  as  cash  flow  hedges  are  deferred   under   accumulated   other
comprehensive  income on the  consolidated  balance  sheets and amortized  into
consolidated net earnings in the period in which the underlying  hedged item is
recognized.  In the event a  designated  hedged item is sold,  extinguished  or
matures prior to the  termination  of the related  derivative  instrument,  any
unrealized  derivative  gain or loss is recognized  immediately in consolidated
net earnings.  Gains or losses on the termination of financial instruments that
have not been designated as hedges are recognized in consolidated  net earnings
immediately.

Embedded derivatives are derivatives that are included in a non-derivative host
contract. Embedded derivatives are recorded at fair value separately from the
host contract when their economic characteristics and risks are not clearly and
closely related to the host contract.

Transaction costs that are directly attributable to the acquisition or issue of
a financial  asset or  financial  liability  and  original  issue  discounts on
long-term debt have been included in the carrying value of the financial  asset
or liability  and are amortized to  consolidated  net earnings over the life of
the financial instrument using the effective interest method.


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

<PAGE>

RISK MANAGEMENT

<TABLE>
<CAPTION>
                                                      Three Months Ended              Year Ended
                                                |--------|                       |-------|
                                                | DEC 31 |    Sep 30    Dec 31   | DEC 31|   Dec 31
($ millions)                                    |  2007  |     2007      2006    | 2007  |   2006
- ------------------------------------------------|--------|-----------------------|-------|-----------
REALIZED LOSS (GAIN)
<S>                                              <C>        <C>         <C>       <C>        <C>
Crude oil and NGLs financial instruments         $   308    $   102     $  223    $   505    $ 1,395
Natural gas financial instruments                   (127)      (125)       (97)      (343)       (70)
                                                 -------    -------     ------    -------    -------
                                                 $   181    $   (23)    $  126    $   162    $ 1,325

UNREALIZED LOSS (GAIN)
Crude oil and NGLs financial instruments         $   770    $    80      $(239)   $ 1,244    $  (736)
Natural gas financial instruments                     75         (4)         8        156       (260)
Interest rate swaps                                    -          -        (10)         -        (17)
                                                 -------    -------     ------    -------    -------
                                                 $   845    $    76      $(241)   $ 1,400    $(1,013)
                                                 -------    -------     ------    -------    -------
TOTAL                                            $ 1,026    $    53      $(115)   $ 1,562    $   312
====================================================================================================
</TABLE>

The net  realized  losses  (gains)  from  crude  oil and NGLs and  natural  gas
financial  instruments  decreased  (increased) the Company's  average  realized
prices  as   follows:

<TABLE>
<CAPTION>

                                    Three Months Ended              Year Ended
                                  |--------|                       |-------|
                                  | DEC 31 |  Sep 30     Dec 31    | DEC 31|    Dec 31
                                  |  2007  |   2007       2006     |  2007 |     2006
- ---------------------------------------------------------------------------------------
<S>                                <C>        <C>        <C>        <C>        <C>
Crude oil and NGLs ($/bbl) (1)     $ 9.99     $ 3.30     $ 7.09     $ 4.18     $ 11.57
Natural gas ($/mcf) (1)            $(0.87)    $(0.83)    $(0.65)    $(0.56)    $(0.13)
=======================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

Complete  details related to outstanding  derivative  financial  instruments at
December 31, 2007 are disclosed in note 10 to the Company's  unaudited  interim
consolidated   financial   statements.   As  at  December  31,  2006,  the  net
unrecognized asset related to the estimated fair values of derivative financial
instruments  designated  as  hedges  was  $222  million.

As effective as the Company's hedges are against reference  commodity prices, a
substantial portion of the commodity derivative  financial  instruments entered
into by the Company have not been formally  designated as hedges for accounting
purposes or do not meet the requirements for hedge accounting under GAAP due to
currency,  product  quality and  location  differentials  (the  "non-designated
hedges"). The change in the fair value of the non-designated hedges is based on
prevailing  forward  commodity  prices in  effect at the end of each  reporting
period and is reflected  in risk  management  activities  in  consolidated  net
earnings.  The  cash  settlement  amount  of  the  risk  management  derivative
financial  instruments may vary materially  depending upon the underlying crude
oil and natural gas prices at the time of final  settlement  of the  derivative
financial  instruments,  as compared to their  mark-to-market value at December
31, 2007. Due to changes in the crude oil and natural gas forward pricing,  and
the reversal of prior period unrealized gains and losses,  the Company recorded
a net  unrealized  loss of  $1,400  million  ($977  million  after-tax)  on its
commodity  risk  management  activities  for the year ended  December 31, 2007,
including an $845 million  ($593  million  after-tax)  unrealized  loss for the
three months ended December 31, 2007  (September 30, 2007 - unrealized  loss of
$76 million, $57 million after-tax; December 31, 2006 - unrealized gain of $241
million, $166 million after-tax).


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

FOREIGN EXCHANGE
                                Three Months Ended           Year Ended
                              |--------|                    |-------|
                              | DEC 31 |  Sep 30    Dec 31  | DEC 31|    Dec 31
($ millions)                  |  2007  |   2007      2006   |  2007 |     2006
- ------------------------------|--------|--------------------|-------|-----------
Net realized foreign
   exchange loss (gain)         $   -     $  22    $  (20)    $  53      $ (12)
Net unrealized foreign
   exchange (gain) loss (1)       (47)     (195)      171      (524)       134
                                -----     -----    ------     -----      -----
                                $ (47)    $(173)   $  151     $(471)     $ 122
================================================================================
(1)  AMOUNTS ARE REPORTED NET OF THE HEDGING EFFECT OF CROSS CURRENCY  INTEREST
     RATE SWAPS AS DESCRIBED IN RISK MANAGEMENT ACTIVITIES.

The Company's  operating  results are affected by  fluctuations in the exchange
rates between the Canadian dollar, US dollar, and UK pound sterling. A majority
of the Company's  revenue is based on reference to US dollar benchmark  prices.
An  increase in the value of the  Canadian  dollar in relation to the US dollar
results  in  decreased  revenue  from  the  sale of the  Company's  production.
Conversely,  a decrease in the value of the Canadian  dollar in relation to the
US  dollar  results  in  increased  revenue  from  the  sale  of the  Company's
production.  Production  expenses  in the  North  Sea are  subject  to  foreign
currency  fluctuations  due to  changes  in the  exchange  rate of the UK pound
sterling to the US dollar,  while  production  expenses in Offshore West Africa
are subject to foreign  currency  fluctuations  due to changes in the  exchange
rate of the  Canadian  dollar to the US dollar.  The value of the  Company's US
dollar denominated debt is also impacted by the value of the Canadian dollar in
relation to the US dollar.

The net  unrealized  foreign  exchange gain for the three months and year ended
December 31, 2007 was primarily  related to the  strengthening  of the Canadian
dollar in relation to the US dollar with respect to the US dollar debt. The net
unrealized  foreign  exchange gain for the three months ended December 31, 2007
was  also  impacted  by the  re-measurement  of North  Sea  future  income  tax
liabilities  denominated in UK pounds  sterling to US dollars.  Included in the
net unrealized gain for the year ended December 31, 2007 was an unrealized loss
of $350 million (nine months ended September 30, 2007 - unrealized loss of $335
million)  related to the impact of the cross currency  interest rate swaps. The
net realized  foreign  exchange  gain for the year ended  December 31, 2007 was
primarily due to the result of foreign exchange rate fluctuations on settlement
of working capital items  denominated in US dollars or UK pounds sterling.  The
Canadian dollar ended the fourth quarter above parity, at US$1.0120 compared to
US$1.0037 at September 30, 2007 (December 31, 2006 - US$0.8581).

During the first quarter of 2007, the Company  de-designated the portion of the
US dollar  denominated debt previously  hedged against its net investment in US
dollar  based  self-sustaining  foreign  operations.  Accordingly,  all foreign
exchange (gains) losses arising each period on US dollar denominated  long-term
debt are now recognized in the consolidated statement of earnings.


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

<PAGE>

TAXES

<TABLE>
<CAPTION>
                                                          Three Months Ended            Year Ended
                                                          ------------------            ----------
                                                  |--------|                      |--------|
                                                  | DEC 31 |   Sep 30    Dec 31   | DEC 31 |   Dec 31
($ millions except income tax rates)              |  2007  |     2007      2006   |   2007 |     2006
- --------------------------------------------------|--------|----------------------|--------|----------
TAXES OTHER THAN INCOME TAX
<S>                                                 <C>        <C>       <C>        <C>        <C>
Current                                             $   16     $   30    $   44     $  121     $  219
Deferred                                                17         10        (3)        44         37
                                                    ------     ------    ------     ------     ------
                                                    $   33     $   40    $   41     $  165     $  256
======================================================================================================

CURRENT INCOME TAX
North America                                       $   31     $   28    $   51     $   96     $  143
North Sea                                               65         56        30        210         30
Offshore West Africa                                    27         21        14         74         49
                                                    ------     ------    ------     ------     ------
                                                       123        105        95        380        222
FUTURE INCOME TAX (RECOVERY) EXPENSE                  (847)       175       135       (456)       652
                                                    ------     ------    ------     ------     ------
                                                      (724)       280       230        (76)       874
Income tax rate and other legislative
changes (1)(2)(3)                                      793          -         -        864        395
                                                    ------     ------    ------     ------     ------
TOTAL INCOME TAX EXPENSE                            $   69     $  280    $  230     $  788     $1,269

Effective income tax rate before non-recurring
benefits                                             93.2%      28.6%     42.4%      31.1%      37.3%
======================================================================================================
</TABLE>
(1)  INCLUDES THE EFFECT OF A ONE TIME RECOVERY OF $793 MILLION DUE TO CANADIAN
     FEDERAL INCOME TAX RATE REDUCTIONS AND OTHER  LEGISLATIVE  CHANGES ENACTED
     OR SUBSTANTIVELY ENACTED DURING THE FOURTH QUARTER OF 2007.

(2)  INCLUDES THE EFFECT OF A ONE TIME  RECOVERY OF $71 MILLION DUE TO CANADIAN
     FEDERAL  INCOME TAX RATE  REDUCTIONS  ENACTED DURING THE SECOND QUARTER OF
     2007.

(3)  INCLUDES THE EFFECT OF THE FOLLOWING:

     o    A  ONE  TIME  EXPENSE  OF  $110  MILLION  RELATED  TO  THE  INCREASED
          SUPPLEMENTARY  CHARGE  ON OIL AND GAS  PROFITS  IN THE UK NORTH  SEA,
          SUBSTANTIVELY  ENACTED DURING THE FIRST QUARTER OF 2006.

     o    A ONE TIME RECOVERY OF $438 MILLION DUE TO CANADIAN FEDERAL,  ALBERTA
          AND  SASKATCHEWAN  TAX RATE  REDUCTIONS  ENACTED  DURING  THE  SECOND
          QUARTER OF 2006.

     o    A ONE TIME  RECOVERY OF $67 MILLION  DUE TO COTE  D'IVOIRE  CORPORATE
          INCOME TAX RATE REDUCTIONS ENACTED DURING THE THIRD QUARTER OF 2006.

Taxes other than income tax primarily  includes current and deferred  petroleum
revenue tax ("PRT").  PRT is charged on certain  fields in the North Sea at the
rate of 50% of net  operating  income,  after  allowing for certain  deductions
including abandonment expenditures.

Taxable  income from the  conventional  crude oil and  natural gas  business in
Canada is primarily  generated  through  partnerships,  with the related income
taxes payable in a future period.  North America current income taxes have been
provided  on the basis of the  corporate  structure  and  available  income tax
deductions  and will vary  depending  upon the  nature,  timing  and  amount of
capital expenditures  incurred in Canada in any particular year. In particular,
current  taxes in a  specific  year are  sensitive  to the  timing  of when the
Horizon  Project  capital  expenditures  are deductible for Canadian income tax
purposes.

During the year ended December 31, 2007, the Company's  consolidated  effective
income tax rate was reduced primarily due to income tax rate reductions enacted
in Canada  during the second and fourth  quarters  of 2007,  the effects of the
non-taxable portion of unrealized foreign exchange gains on US dollar debt, net
of unrealized  losses on cross currency  swaps,  and  adjustments to future tax
expense  in Canada  related to the final  phase-in  of  deductibility  of crown
royalties and the elimination of the resource allowance deduction in 2007.


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

<PAGE>

<TABLE>
<CAPTION>

CAPITAL EXPENDITURES (1)
                                                              Three Months Ended          Year Ended
                                                              ------------------          ----------

                                                        |------|                          | -------|
                                                        |DEC 31|    Sep 30      Dec 31    | DEC 31 |      Dec 31
($ millions)                                            | 2007 |      2007        2006    |   2007 |        2006
- --------------------------------------------------------|------|--------------------------|--------|------------
<S>                                                   <C>          <C>        <C>
EXPENDITURES ON PROPERTY, PLANT AND EQUIPMENT
Net property (dispositions) acquisitions              $   (107)    $     7    $  4,720    $    (39)    $  4,733
Land acquisition and retention                              15          29          28          95          210
Seismic evaluations                                         17          23          17         124          130
Well drilling, completion and equipping                    341         299         462       1,642        2,340
Production and related facilities                          390         238         311       1,205        1,314
                                                      ----------  --------- -----------   ---------   ---------
TOTAL NET RESERVE REPLACEMENT EXPENDITURES                 656         596       5,538       3,027        8,727
                                                      ----------  --------- -----------   ---------   ---------
Horizon Project:
   Phase 1 construction costs                              691         671         745       2,740        2,768
   Phases 2/3 costs                                         33          28          54         124           79
   Capitalized interest, stock-based compensation
   and other                                               108         120         134         437          338
                                                      ----------  --------- -----------   ---------   ---------
Total Horizon Project                                      832         819         933       3,301        3,185
                                                      ----------  --------- -----------   ---------   ---------
Midstream                                                    2           2           1           6           12
Abandonments (2)                                            16          22          19          71           75
Head office                                                  8           3           6          20           26
                                                             -           -           -           -            -
                                                      ----------  --------- -----------   ---------   ---------
TOTAL NET CAPITAL EXPENDITURES                        $  1,514     $ 1,442    $  6,497    $  6,425     $ 12,025

================================================================================================================
BY SEGMENT

North America                                         $    570     $   441    $  5,296    $  2,428     $  7,936
North Sea                                                   44         121         211         439          646
Offshore West Africa                                        43          34          30         159          134
Other                                                       (1)          -           1           1           11
Horizon Project                                            832         819         933       3,301        3,185
Midstream                                                    2           2           1           6           12
Abandonments (2)                                            16          22          19          71           75
Head office                                                  8           3           6          20           26
                                                      ----------  --------- -----------   ---------   ---------
Total                                                 $  1,514     $ 1,442    $  6,497    $  6,425     $ 12,025
================================================================================================================
</TABLE>
(1)  THE NET CAPITAL  EXPENDITURES  EXCLUDE  ADJUSTMENTS RELATED TO DIFFERENCES
     BETWEEN CARRYING VALUE AND TAX VALUE.

(2)  ABANDONMENTS REPRESENT EXPENDITURES TO SETTLE ASSET RETIREMENT OBLIGATIONS
     AND HAVE BEEN REFLECTED AS CAPITAL EXPENDITURES IN THIS TABLE.


  CANADIAN NATURAL RESOURCES LIMITED                                         43
================================================================================
<PAGE>

The Company's  strategy is focused on building a diversified asset base that is
balanced among various products.  In order to facilitate efficient  operations,
the Company  concentrates  its activities in core regions where it can dominate
the land base and  infrastructure.  The Company focuses on maintaining its land
inventories to enable the continuous  exploitation of play types and geological
trends,    greatly   reducing   overall   exploration   risk.   By   dominating
infrastructure,  the Company is able to maximize  utilization of its production
facilities, thereby increasing control over production costs.

Net  capital  expenditures  for the year ended  December  31,  2007 were $6,425
million  compared to $12,025  million  for the year ended  December  31,  2006.
Excluding the ACC acquisition, net capital expenditures were $7,270 million for
2006.  Capital  expenditures  in 2007  reflected the continued  progress on the
Company's larger, future growth projects,  most notably the Horizon Project, as
well as continued industry-wide  inflationary pressures,  offset by the effects
of an overall  strategic  reduction in the North  America  natural gas drilling
program.

For the year ended December 31, 2007, the Company  drilled a total of 1,322 net
wells   consisting  of  383  natural  gas  wells,  592  crude  oil  wells,  254
stratigraphic  test and service wells and 93 wells that were dry. This compared
to 1,738 net wells  drilled for the year ended  December 31, 2006.  The Company
achieved an overall  success rate of 91% for the year ended  December 31, 2007,
excluding  stratigraphic test and service wells, consistent with the year ended
December 31, 2006.

Net capital  expenditures  for the fourth  quarter of 2007 were $1,514  million
compared to $6,497  million for the fourth  quarter of 2006 and $1,442  million
for the prior quarter. Excluding the ACC acquisition,  net capital expenditures
were $1,742 million for the fourth quarter of 2006. Fourth quarter 2007 capital
expenditures  decreased from the comparable period in 2006 due to the Company's
strategic  reduction in natural gas drilling  activity,  and increased slightly
from the third quarter of 2007 due to normal drilling seasonality.

For the fourth  quarter of 2007,  the Company  drilled a total of 271 net wells
consisting of 80 natural gas wells,  169 crude oil wells, 6 stratigraphic  test
and service  wells and 16 wells that were dry.  This  compared to 331 net wells
for the  fourth  quarter of 2006 and 268 net wells for the prior  quarter.  The
Company achieved an overall success rate of 94% for the fourth quarter of 2007,
excluding  stratigraphic test and service wells, compared to 89% for the fourth
quarter of 2006 and 95% for the third quarter of 2007.

NORTH AMERICA

North America,  including the Horizon Project,  accounted for approximately 91%
of the total capital expenditures for the year ended December 31, 2007 compared
to approximately 93% for the year ended December 31, 2006.

During the year ended December 31, 2007,  the Company  targeted 450 net natural
gas wells,  including 58 wells in Northeast British Columbia,  133 wells in the
Northern Plains region,  110 wells in Northwest  Alberta,  and 149 wells in the
Southern  Plains  region.  The Company  also  targeted  610 net crude oil wells
during the same period.  The majority of these wells were  concentrated  in the
Company's crude oil Northern Plains region where 362 heavy crude oil wells, 127
Pelican Lake crude oil wells,  55 thermal crude oil wells and 6 light crude oil
wells were  drilled.  Another 60 wells  targeting  light crude oil were drilled
outside the Northern Plains region.

Due to significant  changes in relative  commodity prices between crude oil and
natural  gas,  the Company  continues  to access its large  crude oil  drilling
inventory  to  maximize  value in both the  short  and  long  term.  Due to the
Company's  focus on  drilling  crude oil wells in 2007,  natural  gas  drilling
activities were reduced to manage overall capital  spending.  Deferred  natural
gas well  locations  have been  retained in the Company's  prospect  inventory.
Drilling on ACC acquired  lands was  optimized  as part of the overall  capital
program.

In November of 2005,  the Company  announced a phased  expansion of its In-Situ
Oil Sands  Assets.  As part of the  development,  the Company is  continuing to
develop its Primrose  thermal  projects.  During 2007, the Company  drilled 135
stratigraphic  test wells and  observation  wells,  2 water source wells and 55
thermal oil wells.  Overall Primrose  thermal  production for each of the years
ended December 31, 2007 and 2006 was approximately 64,000 bbl/d.

The Primrose East  Expansion,  a new facility  located 15  kilometers  from the
existing  Primrose  South  steam  plant  and 25  kilometers  from the Wolf Lake
central processing  facility,  is anticipated to add approximately 40,000 bbl/d
when  complete.  The  Primrose  East  Expansion  received  Board of  Directors'
sanction in 2006 and the Alberta Energy and Utilities Board regulatory approval
in the first quarter of 2007. Drilling and construction are currently underway,
and production is targeted to commence in 2009.

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

<PAGE>

The next phase of the Company's In-Situ Oil Sands Assets expansion is the Kirby
project located 120 kilometers north of the existing Primrose  facilities.  The
Kirby project is  anticipated to add  approximately  45,000 bbl/d of production
growth.  During  September  2007, the Company filed a combined  application and
Environmental  Impact Assessment for this project with Alberta  Environment and
the Alberta Energy and Utilities  Board.  Final corporate  sanction and project
scope will be impacted by environmental regulations and their associated costs.

Development of new pads and secondary recovery  conversion  projects at Pelican
Lake  continued as expected  throughout  the fourth  quarter of 2007.  Drilling
consisted of 18 horizontal wells in the fourth quarter and 125 horizontal wells
for the year ended  December 31, 2007.  The response from the water and polymer
flood  projects  continues to be positive.  Pelican  Lake  production  averaged
approximately  36,000 bbl/d for the fourth  quarter of 2007  compared to 29,000
bbl/d for the fourth quarter of 2006.

Due to growing concerns relating to increased environmental costs for upgraders
located in Canada,  inflationary capital cost pressures and narrowing heavy oil
differentials  in  North  America,  the  Company  has,  at this  point in time,
deferred the Design Basis  Memorandum and Engineering  Design  Specification of
the  Canadian  Natural  Upgrader,  outside  of  the  Horizon  Project,  pending
clarification on the cost of future environmental legislation and a more stable
cost environment.

For the first quarter of 2008, the Company's overall drilling activity in North
America is expected to be comprised of 173 natural gas wells and 175 crude oil
wells excluding stratigraphic and service wells.

HORIZON PROJECT

Work progress on the Horizon  Project was 90% complete at the end of the fourth
quarter.  First  production  continues  to be targeted to commence in the third
quarter of 2008. The project status as at December 31, 2007 was as follows:

o    Overall detailed engineering 98.5% complete and substantially  complete in
     most areas;

o    Overall procurement 99% complete with over $5.6 billion in purchase orders
     and contracts awarded;

o    Commenced receipt and site assembly of Mine Operations  equipment (Shovels
     and Heavy Haul Trucks);

o    Overall construction progress 85% complete;

o    Mine overburden  removal  approximately  72% complete and 0.6 million bank
     cubic meters ahead of schedule;

o    Main  Control  Room  Distributed  Control  Systems  equipment  powered and
     tested;

o    Commissioned 260kV Transmission Line and turned over to operations;

o    Commissioned Raw Water Pumphouse and turned over to operations;

o    Completed reformer erection in Hydrogen Plant;

o    Completed installation and pre-commissioning of CPI Separator Building;

o    Completed the closure of Dyke 10 (external tailings pond) in Mining;

o    Completed  erection of Crushing  Plants and  conveyors in Ore  Preparation
     Area;

o    Completed Primary Separation Cells in Extraction; and

o    Completed construction of Main Laboratory.


Major activities for the first quarter of 2008 include:

o    Mechanically complete Extraction Plant;

o    Mechanically complete Froth Treatment Plant;

o    Mechanically complete Amine Plant;

o    Complete Auxiliary Boiler installation in Cogeneration; and

o    Complete Piping in Heat Integration.

The Company has budgeted  construction  costs of approximately  $1.7 billion to
$1.9  billion  for 2008  related to the  planned  completion  of Phase 1 of the
Horizon Project.


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

<PAGE>

NORTH SEA

In the fourth quarter of 2007, the Company  continued with its planned  program
of infill  drilling,  recompletions,  workovers and  waterflood  optimizations.
During the quarter,  no wells were drilled,  with 1.6 net wells drilling at the
end of  the  quarter.

At Ninian,  the Company continued with its planned  investment in its long-term
facilities and infrastructure strategy, as well as completing workover activity
to  address  water  injection  performance  issues.  Upon  completion  of  this
activity, the drilling crew was mobilized to the Murchison Platform to commence
the first of 2 wells planned for 2008.

In December 2007, the Company completed the sale of its entire working interest
in the B-Block, comprising the Balmoral, Stirling, and Glamis Fields.

OFFSHORE WEST AFRICA

During the  fourth  quarter of 2007,  1.2 net wells were  drilled  with 0.6 net
wells drilling at the end of the quarter.

First  crude  oil from  West  Espoir  commenced  production  in mid 2006 with 1
additional  production  well and 1  additional  injector  well added during the
fourth quarter of 2007. West Espoir development drilling was completed in early
2008, on budget and on schedule.

At the 90%  owned  and  operated  Olowi  Field in  offshore  Gabon,  all  major
construction  contracts  have been  awarded  and  construction  activity on the
wellhead towers and the floating production storage and offtake vessel ("FPSO")
are ongoing.  The project is on schedule with drilling  targeted to commence in
the second  quarter of 2008 and first crude oil  targeted  in late 2008.  Olowi
production  is targeted  to plateau at  approximately  20,000  bbl/d net to the
Company.

<TABLE>
<CAPTION>
LIQUIDITY AND CAPITAL RESOURCES

                                                         |--------------|
($ millions, except ratios)                              |       DEC 31 |        Sep 30              Dec 31
                                                         |        2007  |         2007                2006
- ---------------------------------------------------------|--------------|-------------------------------------
<S>                                                      <C>              <C>               <C>
Working capital deficit (1)                              $         1,382  $         824      $         832
Long-term debt (2)                                       $        10,940  $      10,686      $      11,043

Shareholders' equity
Share capital                                            $         2,674  $       2,663      $       2,562
Retained earnings                                                 10,575          9,824              8,141
Accumulated other comprehensive income (loss)                         72             85               (13)
- ------------------------------------------------------------------------------------------------------------
Total                                                    $        13,321  $      12,572      $      10,690

Debt to book capitalization (2) (3)                                  45%            46%                51%
Debt to market capitalization (2) (4)                                22%            21%                25%
After tax return on average common
         shareholders' equity (5)                                    22%            19%                27%
After tax return on average capital
         employed (2) (6)                                            12%            11%                17%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
(1)  CALCULATED AS CURRENT ASSETS LESS CURRENT LIABILITIES.

(2)  LONG-TERM DEBT AT DECEMBER 31, 2007 IS STATED AT ITS CARRYING  VALUE,  NET
     OF FAIR VALUE  ADJUSTMENTS,  ORIGINAL  ISSUE  DISCOUNTS  AND  TRANSACTIONS
     COSTS.  AMOUNTS FOR PERIODS PRIOR TO JANUARY 1, 2007 WERE NOT ADJUSTED FOR
     THESE ITEMS.

(3)  CALCULATED  AS  LONG-TERM  DEBT;  DIVIDED  BY THE  BOOK  VALUE  OF  COMMON
     SHAREHOLDERS' EQUITY PLUS LONG-TERM DEBT.

(4)  CALCULATED  AS  LONG-TERM  DEBT;  DIVIDED  BY THE  MARKET  VALUE OF COMMON
     SHAREHOLDERS' EQUITY PLUS LONG-TERM DEBT.

(5)  CALCULATED  AS NET  EARNINGS FOR THE TWELVE MONTH  TRAILING  PERIOD;  AS A
     PERCENTAGE OF AVERAGE COMMON SHAREHOLDERS' EQUITY FOR THE PERIOD.

(6)  CALCULATED AS NET EARNINGS PLUS AFTER-TAX  INTEREST EXPENSE FOR THE TWELVE
     MONTH TRAILING PERIOD; AS A PERCENTAGE OF AVERAGE CAPITAL EMPLOYED FOR THE
     PERIOD.  AVERAGE CAPITAL EMPLOYED IS THE AVERAGE  SHAREHOLDERS' EQUITY AND
     LONG-TERM DEBT FOR THE PERIOD, INCLUDING $7,001 MILLION IN AVERAGE CAPITAL
     EMPLOYED  RELATED TO THE HORIZON  PROJECT (2006 - $3,760  MILLION;  2005 -
     $1,421 MILLION).


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

The Company's  capital  resources at December 31, 2007  consisted  primarily of
cash flow from  operations,  available  credit  facilities  and  access to debt
capital markets. Cash flow from operations is dependent on factors discussed in
the Risks and Uncertainties  section of the Company's  December 31, 2006 annual
MD&A. The Company's  ability to renew existing credit  facilities and raise new
debt is also dependent upon these factors, as well as maintaining an investment
grade debt rating and the condition of capital and credit  markets.  Management
believes internally generated cash flows supported by the implementation of the
Company's  hedge policy,  the flexibility of its capital  expenditure  programs
supported by its multi-year  financial  plans,  the Company's  existing  credit
facilities  and the  Company's  ability  to  raise  new  debt  on  commercially
acceptable  terms, will be sufficient to sustain its operations and support its
growth  strategy.  The  Company's  current  debt  ratings are BBB (high) with a
negative trend by DBRS Limited, Baa2 with a stable outlook by Moody's Investors
Service and BBB with a stable  outlook by Standard & Poor's.  The Company  does
not have any direct exposure to asset-backed commercial paper.

At December  31,  2007,  the Company had undrawn bank lines of credit of $1,442
million.  Details related to the Company's  long-term debt at December 31, 2007
are  disclosed  in  note  4 to the  Company's  unaudited  interim  consolidated
financial  statements.  Subsequent to December 31, 2007,  the Company issued an
aggregate  US$1,200  million of unsecured  notes.  Proceeds from the securities
issued were used to repay the Company's bankers' acceptances.

At December 31, 2007, the Company's  working capital deficit was $1,382 million
and included the current portion of the stock-based  compensation  liability of
$390 million and the current  portion of the net  mark-to-market  liability for
risk  management  derivative  financial  instruments  of  $1,227  million.  The
settlement of the stock-based compensation liability is dependent upon both the
surrender  of vested stock  options for cash  settlement  by employees  and the
value  of the  Company's  share  price  at the  time  of  surrender.  The  cash
settlement amount of the risk management  derivative financial  instruments may
vary materially  depending upon the underlying crude oil and natural gas prices
at the time of final  settlement of the derivative  financial  instruments,  as
compared to their mark-to-market value at December 31, 2007.

The Company  believes it has the necessary  financial  capacity to complete the
Horizon Project, while at the same time not compromising conventional crude oil
and natural gas growth  opportunities.  The financing of Phase 1 of the Horizon
Project development is guided by the competing  principles of retaining as much
direct ownership interest as possible while maintaining a strong balance sheet.

Long-term debt was $10,940 million at December 31, 2007, resulting in a debt to
book capitalization level of 45% (September 30, 2007 - 46%; December 31, 2006 -
51%).  While this ratio is at the high end of the 35% to 45% range  targeted by
management, the Company remains committed to maintaining a strong balance sheet
and flexible  capital  structure,  and expects its debt to book  capitalization
ratio to be near the  midpoint  of the range in late  2008.  While the  Company
believes that it has the balance  sheet  strength and  flexibility  to complete
Phase  1 of  the  Horizon  Project,  as  well  as  its  other  planned  capital
expenditure programs, the Company has hedged a significant portion of its crude
oil and  natural gas  production  for 2008 at prices  that  protect  investment
returns.  In the future,  the  Company may also  consider  the  divestiture  of
certain  non-strategic and non-core properties to gain additional balance sheet
flexibility.

The  Company's  commodity  hedging  program  reduces the risk of  volatility in
commodity  price markets and supports the  Company's  cash flow for its capital
expenditures  throughout the Horizon Project  construction period. This program
allows for the hedging of up to 75% of the near 12 months budgeted  production,
up to 50% of the following 13 to 24 months  estimated  production and up to 25%
of production expected in months 25 to 48. For the purpose of this program, the
purchase of crude oil put options is in  addition to the above  parameters.  In
accordance with the policy, approximately 65% of expected crude oil volumes are
hedged for 2008 and  approximately  53% of  expected  natural  gas  volumes are
hedged for the first  quarter of 2008.  Subsequent  to December 31,  2007,  the
Company  hedged  25,000  bbl/d of crude oil  volumes for 2009 using WTI collars
with a US$70.00 floor.


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

<PAGE>

The Company has the  following  commodity  related  net  financial  derivatives
outstanding as at December 31, 2007:

<TABLE>
<CAPTION>
                                      Remaining term      Volume               Weighted average
                                                                                     price                       INDEX
- -----------------------------------------------------------------------------------------------------------------------
<S>                              <C>                      <C>                <C>                           <C>
CRUDE OIL
Crude oil price collars (1)      Jan 2008  -  Mar 2008    50,000 bbl/d       US$60.00  -    US$80.06               WTI
                                 Jan 2008  -  Jun 2008    25,000 bbl/d       US$60.00  -    US$80.44               WTI
                                 Apr 2008  -  Sep 2008    25,000 bbl/d       US$60.00  -    US$80.46               WTI
                                 Jul 2008  -  Sep 2008    25,000 bbl/d       US$70.00  -   US$123.75               WTI
                                 Oct 2008  -  Dec 2008    25,000 bbl/d       US$70.00  -   US$112.63               WTI
                                 Jan 2008  -  Dec 2008    20,000 bbl/d       US$50.00  -    US$65.53       Mayan Heavy
                                 Jan 2008  -  Dec 2008    50,000 bbl/d       US$60.00  -    US$75.22               WTI
                                 Jan 2008  -  Dec 2008    50,000 bbl/d       US$60.00  -    US$76.05               WTI
                                 Jan 2008  -  Dec 2008    50,000 bbl/d       US$60.00  -    US$76.98               WTI
Crude oil puts                   Jan 2008  -  Dec 2008    50,000 bbl/d                 -    US$55.00               WTI

=======================================================================================================================
</TABLE>
(1)  SUBSEQUENT TO DECEMBER 31, 2007, THE COMPANY ENTERED INTO 25,000 BBL/D OF
     US$70.00 - US$111.56 WTI COLLARS FOR THE PERIOD JANUARY TO DECEMBER 2009.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
<S>                              <C>                      <C>                <C>             <C>           <C>
NATURAL GAS
AECO price collars               Jan 2008  -  Mar 2008    400,000 GJ/d       C$7.00    -     C$14.08              AECO
                                 Jan 2008  -  Mar 2008    500,000 GJ/d       C$7.50    -     C$10.81              AECO
=======================================================================================================================
</TABLE>

The Company's  outstanding  commodity financial  derivatives are expected to be
settled  monthly  based on the  applicable  index  pricing  for the  respective
contract month.

LONG-TERM DEBT

As at  December  31,  2007,  the  Company  had in place  unsecured  bank credit
facilities of $6,209  million,  comprised of:

o    a $100 million demand credit facility;

o    a  non-revolving  syndicated  credit  facility of $2,350 million  maturing
     October 2009;

o    a revolving  syndicated  credit  facility of $2,230 million  maturing June
     2012;

o    a revolving  syndicated  credit  facility of $1,500 million  maturing June
     2012; and

o    a (pound)15  million demand credit facility related to the Company's North
     Sea operations.

During  the second  quarter of 2007,  one of the  revolving  syndicated  credit
facilities  was  increased  from  $1,825  million to $2,230  million and a $500
million demand credit facility was terminated.  The revolving syndicated credit
facilities  were  extended  and now  mature  June  2012.  Both  facilities  are
extendible annually for one year periods at the mutual agreement of the Company
and the lenders.  If the  facilities  are not extended,  the full amount of the
outstanding principal would be repayable on the maturity date.

In conjunction with the closing of the acquisition of ACC in November 2006, the
Company  executed a $3,850 million,  non-revolving  syndicated  credit facility
maturing in October 2009. In March 2007,  $1,500  million was repaid,  reducing
the facility to $2,350 million.

In addition to the outstanding debt, letters of credit and financial guarantees
aggregating  $345  million,  including  $300  million  related  to the  Horizon
Project, were outstanding at December 31, 2007.


   48                                         CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

MEDIUM-TERM NOTES

In December 2007,  the Company issued $400 million of unsecured  notes maturing
December 2010,  bearing interest at 5.50%.  Proceeds from the securities issued
were  used to repay  bankers'  acceptances  under  the  Company's  bank  credit
facilities.  After issuing  these  securities,  the Company has $2,600  million
remaining on its  outstanding  $3,000  million base shelf  prospectus  filed in
September 2007 that allows for the issue of  medium-term  notes in Canada until
October 2009. If issued,  these  securities will bear interest as determined at
the date of issuance.

During the first quarter of 2007,  $125 million of 7.40%  unsecured  debentures
due March 1, 2007 were repaid.

SENIOR UNSECURED NOTES

During the second quarter of 2007,  US$31 million of the senior unsecured notes
were repaid.

US DOLLAR DEBT SECURITIES

In March  2007,  the  Company  issued  US$2,200  million  of  unsecured  notes,
comprised of US$1,100 million of unsecured notes maturing May 2017 and US$1,100
million of unsecured notes maturing March 2038,  bearing  interest at 5.70% and
6.25%,  respectively.  Concurrently,  the Company  entered into cross  currency
interest rate swaps to fix the Canadian dollar interest and principal repayment
amounts on the entire US$1,100 million of unsecured notes due May 2017 at 5.10%
and C$1,287  million.  The Company also entered into a cross currency  interest
rate swap to fix the Canadian dollar interest and principal  repayment  amounts
on US$550 million of unsecured notes due March 2038 at 5.76% and C$644 million.
Proceeds from the  securities  issued were used to repay  bankers'  acceptances
under the Company's bank credit  facilities.

During the first quarter of 2007, the Company  de-designated the portion of its
US dollar  denominated debt previously  hedged against its net investment in US
dollar  based  self-sustaining  foreign  operations.  Accordingly,  all foreign
exchange  (gains)  losses  arising  each  period  on  U.S.  dollar  denominated
long-term debt are now recognized in the consolidated statement of earnings.

In September  2007, the Company filed a base shelf  prospectus  that allows for
the issue of up to US$3,000  million of debt  securities  in the United  States
until October 2009.

Subsequent  to December  31,  2007,  the  Company  issued  US$1,200  million of
unsecured  notes  under  this US base  shelf  prospectus,  comprised  of US$400
million of 5.15%  unsecured  notes due February  2013,  US$400 million of 5.90%
unsecured  notes due February 2018, and US$400 million of 6.75% unsecured notes
due  February  2039.  Proceeds  from the  securities  issued were used to repay
bankers' acceptances under the Company's bank credit facilities.  After issuing
these securities, the Company has US$1,800 million remaining on its outstanding
US$3,000 million base shelf prospectus.  If issued,  these securities will bear
interest as determined at the date of issuance.

SHARE CAPITAL

As at December 31, 2007, there were 539,729,000  common shares  outstanding and
30,649,000 stock options outstanding.  As at February 26, 2008, the Company had
540,252,000 common shares outstanding and 29,173,000 stock options outstanding.

During 2007,  the Company did not purchase any common  shares for  cancellation
pursuant to the Normal  Course  Issuer Bid  previously  filed for the  12-month
period beginning  January 24, 2007 and ending January 23, 2008. The Company has
decided  not to renew the  Normal  Course  Issuer Bid until  subsequent  to the
completion of Phase 1 of the Horizon Project.

In February 2008, the Company's Board of Directors  approved an increase in the
annual  dividend  paid by the Company to $0.40 per common  share for 2008.  The
increase  represents a 18% increase from 2007,  recognizes the stability of the
Company's cash flow, and provides a return to Shareholders.  This is the eighth
consecutive  year in which  the  Company  has paid  dividends  and the  seventh
consecutive year of an increase in the distribution  paid to its  Shareholders.
The dividend  policy  undergoes a periodic review by the Board of Directors and
is subject to change. In March 2007, an increase in the annual dividend paid by
the  Company  was  approved to $0.34 per common  share for 2007.  The  increase
represented a 13% increase from 2006.


  CANADIAN NATURAL RESOURCES LIMITED                                         49
================================================================================
<PAGE>

COMMITMENTS AND OFF BALANCE SHEET ARRANGEMENTS

In the  normal  course of  business,  the  Company  has  entered  into  various
commitments that will have an impact on the Company's future operations.  These
commitments  primarily relate to debt repayments,  operating leases relating to
offshore  FPSOs,  drilling  rigs and office  space,  and firm  commitments  for
gathering,  processing  and  transmission  services,  as well  as  expenditures
relating to asset retirement obligations.  As at December 31, 2007, no entities
were  consolidated  under  the  Canadian  Institute  of  Chartered  Accountants
Handbook   Accounting   Guideline  15,   "Consolidation  of  Variable  Interest
Entities".  The following  table  summarizes  the Company's  commitments  as at
December 31, 2007:

<TABLE>
<CAPTION>
($ millions)                           2008          2009        2010        2011         2012      Thereafter
- ----------------------------------------------------------------------------------------------------------------
<S>                               <C>           <C>         <C>         <C>         <C>         <C>

Product transportation
  and pipeline                    $     232     $     151   $     137   $     109   $       91  $       972
Offshore equipment operating
  lease (1)                       $     114     $     129   $     113   $     111   $       90  $       387
Offshore drilling (2) (3)         $     267     $     185   $      39   $       -   $        -  $         -
Asset retirement obligations (4)  $      33     $       4   $       5   $       4   $        4  $     4,376
Long-term debt (5)                $      39     $   2,361   $     400   $     395   $      346  $     5,098
Interest expense (6)              $     612     $     590   $     487   $     465   $      374  $     4,338
Office lease                      $      26     $      28   $      28   $      22   $        3  $         -

Electricity and other             $     166     $     173   $      25   $       4   $        -  $         -
================================================================================================================
</TABLE>
(1)  OFFSHORE EQUIPMENT OPERATING LEASES ARE PRIMARILY COMPRISED OF OBLIGATIONS
     RELATED TO FPSOS.  DURING 2006,  THE COMPANY  ENTERED INTO AN AGREEMENT TO
     LEASE AN  ADDITIONAL  FPSO  COMMENCING  IN 2008,  IN  CONNECTION  WITH THE
     PLANNED OFFSHORE  DEVELOPMENT IN GABON,  OFFSHORE WEST AFRICA.  DURING THE
     INITIAL TERM,  THE TOTAL ANNUAL  PAYMENTS FOR THE GABON FPSO ARE ESTIMATED
     TO BE US$50 MILLION.

(2)  DURING 2007,  THE COMPANY  ENTERED INTO A ONE-YEAR  AGREEMENT FOR OFFSHORE
     DRILLING  SERVICES RELATED TO THE BAOBAB FIELD IN COTE D'IVOIRE,  OFFSHORE
     WEST AFRICA.  THE  AGREEMENT IS SCHEDULED TO COMMENCE IN 2008,  SUBJECT TO
     RIG AVAILABILITY.  ESTIMATED TOTAL PAYMENTS OF US$100 MILLION, AFTER JOINT
     VENTURE RECOVERIES, HAVE BEEN INCLUDED IN THIS TABLE FOR THE PERIOD 2008 -
     2009.

(3)  DURING 2007, THE COMPANY AWARDED  CONTRACTS FOR A DRILLING RIG AND FOR THE
     CONSTRUCTION OF WELLHEAD  TOWERS IN CONNECTION  WITH THE PLANNED  OFFSHORE
     DEVELOPMENT IN GABON,  OFFSHORE WEST AFRICA.  ESTIMATED  TOTAL PAYMENTS OF
     US$393  MILLION  HAVE BEEN  INCLUDED  IN THIS TABLE FOR THE PERIOD  2008 -
     2010.

(4)  AMOUNTS  REPRESENT   MANAGEMENT'S  ESTIMATE  OF  THE  FUTURE  UNDISCOUNTED
     PAYMENTS  TO SETTLE  ASSET  RETIREMENT  OBLIGATIONS  RELATED  TO  RESOURCE
     PROPERTIES,   FACILITIES,  AND  PRODUCTION  PLATFORMS,  BASED  ON  CURRENT
     LEGISLATION AND INDUSTRY  OPERATING  PRACTICES.  AMOUNTS DISCLOSED FOR THE
     PERIOD 2008 - 2012  REPRESENT THE MINIMUM  REQUIRED  EXPENDITURES  TO MEET
     THESE OBLIGATIONS.  ACTUAL  EXPENDITURES IN ANY PARTICULAR YEAR MAY EXCEED
     THESE MINIMUM AMOUNTS.

(5)  THE  LONG-TERM  DEBT  REPRESENTS  PRINCIPAL  REPAYMENTS  ONLY AND DOES NOT
     REFLECT FAIR VALUE  ADJUSTMENTS,  ORIGINAL ISSUE  DISCOUNTS OR TRANSACTION
     COSTS.  NO DEBT  REPAYMENTS  ARE REFLECTED FOR $2,366 MILLION OF REVOLVING
     BANK CREDIT FACILITIES DUE TO THE EXTENDABLE NATURE OF THE FACILITIES.

(6)  INTEREST   EXPENSE   AMOUNTS   REPRESENT  THE  SCHEDULED   FIXED-RATE  AND
     VARIABLE-RATE  CASH  PAYMENTS  RELATED  TO  LONG-TERM  DEBT.  INTEREST  ON
     VARIABLE-RATE  LONG-TERM DEBT WAS ESTIMATED BASED UPON PREVAILING INTEREST
     RATES AS OF DECEMBER 31, 2007.

In  addition  to  the  amounts   disclosed  above,  the  Company  has  budgeted
construction  costs of  approximately  $1.7  billion to $1.9  billion  for 2008
related to the planned completion of Phase 1 of the Horizon Project.

LEGAL PROCEEDINGS

The Company is defendant  and plaintiff in a number of legal actions that arise
in the  normal  course of  business.  In  addition,  the  Company is subject to
certain  contractor  construction  claims related to the Horizon  Project.  The
Company  believes that any liabilities  that might arise pertaining to any such
matters  would  not  have  a  material  effect  on its  consolidated  financial
position.


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

CRITICAL ACCOUNTING ESTIMATES AND CHANGE IN ACCOUNTING POLICIES

The  preparation  of  financial   statements   requires  the  Company  to  make
judgements,  assumptions and estimates in the application of generally accepted
accounting  principles that have a significant  impact on the financial results
of  the  Company.   Actual  results  could  differ  from  those  estimates.   A
comprehensive  discussion of the Company's  significant  accounting policies is
contained in the MD&A and the audited consolidated financial statements for the
year ended December 31, 2006.

For the impact of new accounting standards related to financial instruments and
comprehensive  income, please refer to Risk Management Activities on page 38 of
this MD&A and note 2 of the unaudited interim consolidated financial statements
as at December 31, 2007.

SENSITIVITY ANALYSIS

The following table is indicative of the annualized  sensitivities of cash flow
from  operations  and net earnings from changes in certain key  variables.  The
analysis is based on business  conditions  and sales volumes  during the fourth
quarter of 2007,  excluding  mark-to-market  gains (losses) on risk  management
activities,  and is not necessarily indicative of future results. Each separate
line item in the  sensitivity  analysis  shows  the  effect of a change in that
variable only; all other variables are held constant.

<TABLE>
<CAPTION>
                                     CASH FLOW          CASH FLOW
                                                              FROM                               NET
                                          FROM          OPERATIONS           NET             EARNINGS
                                    OPERATIONS  (PER COMMON SHARE,      EARNINGS    (PER COMMON SHARE,
                                  ($ MILLIONS)              BASIC)   ($ MILLIONS)               BASIC)
- -------------------------------------------------------------------------------------------------------
<S>                                 <C>         <C>                  <C>            <C>
PRICE CHANGES
Crude oil - WTI US$1.00/bbl (1)
   Excluding financial derivatives  $       96  $         0.18       $       70        $      0.13
   Including financial derivatives  $       21  $         0.04       $       17        $      0.03
Natural gas - AECO C$0.10/mcf (1)
   Excluding financial derivatives  $       41  $         0.08       $       29        $      0.05
   Including financial derivatives  $       33  $         0.06       $       23        $      0.04
VOLUME CHANGES
Crude oil - 10,000 bbl/d            $      132  $         0.25       $       70        $      0.13
Natural gas - 10 mmcf/d             $       16  $         0.03       $        6        $      0.01
FOREIGN CURRENCY RATE CHANGE
$0.01 change in US$ (1)
Including financial derivatives     $  73 - 74  $  0.13 - 0.14       $  31 - 32        $      0.06
INTEREST RATE CHANGE - 1%           $       38  $         0.07       $       38        $      0.07
=======================================================================================================
</TABLE>
(1)  FOR DETAILS OF OUTSTANDING  FINANCIAL  INSTRUMENTS IN PLACE, REFER TO NOTE
     10 OF THE COMPANY'S UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS.


  CANADIAN NATURAL RESOURCES LIMITED                                         51
================================================================================
<PAGE>

<TABLE>
<CAPTION>
OTHER OPERATING HIGHLIGHTS
NETBACK ANALYSIS

                                              Three Months Ended                Year Ended
                                               ----------------                -----------
                                    DEC 31          Sep 30      Dec 31      DEC 31      Dec 31
($/boe) (1)                           2007            2007        2006        2007        2006
- ------------------------------------------------------------------------------------------------
<S>                               <C>           <C>          <C>         <C>         <C>

Sales price (2)                   $   49.23     $    47.96   $   43.91   $   49.05   $   47.92
Royalties                              6.21           6.07        5.62        6.26        5.89
Production expense (3)                 8.85           9.62        9.16        9.75        9.14
- ------------------------------------------------------------------------------------------------
NETBACK                               34.17          32.27       29.13       33.04       32.89
Midstream contribution (3)            (0.24)         (0.26)      (0.22)      (0.23)      (0.23)
Administration                         0.76           0.94        1.01        0.93        0.85
Interest, net                          0.92           1.15        1.08        1.24        0.66
Realized risk management
   loss (gain)                         3.27          (0.41)       2.25        0.73        6.27
Realized foreign exchange
   (gain) loss                            -           0.38       (0.34)      0.24        (0.06)
Taxes other than income
   tax - current                       0.30           0.54        0.78        0.54        1.04
Current income tax -
   North America                       0.56           0.49        0.91        0.43        0.68
Current income tax -
   North Sea                           1.18           0.99        0.54        0.95        0.14
Current income tax -
   Offshore West Africa                0.50           0.37        0.24        0.33        0.23
- ------------------------------------------------------------------------------------------------
CASH FLOW                         $   26.92     $    28.08   $   22.88   $   27.88   $   23.31
================================================================================================
</TABLE>
(1)  AMOUNTS EXPRESSED ON A PER UNIT BASIS ARE BASED ON SALES VOLUMES.

(2)  NET OF  TRANSPORTATION  AND BLENDING COSTS AND EXCLUDING  RISK  MANAGEMENT
     ACTIVITIES.

(3)  EXCLUDING INTERSEGMENT ELIMINATION.


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

FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS

                                                             -------------------

                                                                          DEC 31              Dec 31
(millions of Canadian dollars, unaudited)                                   2007                2006
- ----------------------------------------------------------------------------------------------------
<S>                                                          <C>                    <C>
ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                 $                21    $             23
   Accounts receivable and other                                           1,662               1,947
   Future income tax                                                         480                 163
   Current portion of other long-term assets (note 3)                         18                 106
- ----------------------------------------------------------------------------------------------------
                                                                           2,181               2,239
PROPERTY, PLANT AND EQUIPMENT (note 12)                                   33,902              30,767
OTHER LONG-TERM ASSETS (note 3)                                               31                 154

- ----------------------------------------------------------------------------------------------------
                                                             $            36,114    $         33,160
====================================================================================================
LIABILITIES
CURRENT LIABILITIES
   Accounts payable                                          $               379    $            842
   Accrued liabilities                                                     1,567               1,618
   Current portion of other long-term liabilities (note 5)                 1,617                 611
- ----------------------------------------------------------------------------------------------------
                                                                           3,563               3,071
LONG-TERM DEBT (note 4)                                                   10,940              11,043
OTHER LONG-TERM LIABILITIES (note 5)                                       1,561               1,393
FUTURE INCOME TAX                                                          6,729               6,963
- ----------------------------------------------------------------------------------------------------
                                                                          22,793              22,470
- ----------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
SHARE CAPITAL (note 7)                                                     2,674               2,562
RETAINED EARNINGS                                                         10,575               8,141
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (note 8)                        72                 (13)
- ----------------------------------------------------------------------------------------------------
                                                                          13,321              10,690
- ----------------------------------------------------------------------------------------------------
                                                             $            36,114    $         33,160
====================================================================================================
COMMITMENTS (NOTE 11)
</TABLE>


  CANADIAN NATURAL RESOURCES LIMITED                                        53
================================================================================

 <PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF EARNINGS

                                           Three Months Ended           Year Ended
                                      |-------|              |--------|
                                      |DEC 31 |      Dec 31  | DEC 31 |       Dec 31
(millions of Canadian dollars,        |  2007 |      2006    |  2007  |        2006
except per common                     |       |              |        |
share amounts, unaudited)             |       |              |        |
- --------------------------------------|-------|--------------|--------|---------------
<S>                                   <C>         <C>        <C>          <C>

REVENUE                               $  3,200    $  2,826   $  12,543    $   11,643
Less: royalties                           (343)       (317)     (1,391)       (1,245)
- --------------------------------------------------------------------------------------
REVENUE, NET OF ROYALTIES                2,857       2,509      11,152        10,398
- --------------------------------------------------------------------------------------
EXPENSES

Production                                 491         519       2,184         1,949
Transportation and blending                467         333       1,570         1,443
Depletion, depreciation and
    amortization                           719         724       2,863         2,391
Asset retirement obligation
    accretion (note 5)                      17          18          70            68
Administration                              42          57         208           180
Stock-based compensation
    (recovery) expense (note 5)            (16)        176         193           139
Interest, net                               51          62         276           140
Risk management activities
    (note 10)                            1,026        (115)      1,562           312
Foreign exchange (gain) loss               (47)        151        (471)          122
- --------------------------------------------------------------------------------------
                                         2,750       1,925       8,455         6,744
- --------------------------------------------------------------------------------------
EARNINGS BEFORE TAXES                      107         584       2,697         3,654
Taxes other than income tax                 33          41         165           256
Current income tax expense
    (note 6)                               123          95         380           222
Future income tax (recovery)
    expense (note 6)                      (847)        135        (456)          652
- --------------------------------------------------------------------------------------
NET EARNINGS                          $    798    $    313   $   2,608    $    2,524

======================================================================================
NET EARNINGS PER COMMON SHARE
    (note 9)
  Basic and diluted                   $   1.48    $   0.58   $    4.84    $     4.70
======================================================================================
</TABLE>


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

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

                                                           Year Ended
                                                  |--------|
                                                  | DEC 31 |         Dec 31
(millions of Canadian dollars, unaudited)         |   2007 |          2006
- --------------------------------------------------|--------|--------------------
SHARE CAPITAL
Balance - beginning of year                       $  2,562          $  2,442
Issued upon exercise of stock options                   21                21
Previously recognized liability on stock
     options exercised for common shares                91               101
Purchase of common shares under Normal
     Course Issuer Bid                                   -                (2)

- --------------------------------------------------------------------------------
Balance - end of year                                2,674             2,562
- --------------------------------------------------------------------------------
RETAINED EARNINGS
Balance - beginning of year,
     as originally reported                          8,141             5,804
Transition adjustment on adoption
     of financial instruments
     standards (note 2)                                 10                 -
- --------------------------------------------------------------------------------
Balance - beginning of year,
     as restated                                     8,151             5,804
Net earnings                                         2,608             2,524
Dividends on common
     shares (note 7)                                  (184)             (161)
Purchase of common shares under
     Normal Course Issuer Bid                            -               (26)
- --------------------------------------------------------------------------------
Balance - end of year                               10,575             8,141
- --------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME
     (LOSS) (note 2)
Balance - beginning of year                            (13)               (9)
Transition adjustment on adoption
     of financial instruments standards                159                 -
- --------------------------------------------------------------------------------
Balance - beginning of year, after
     effect of transition adjustment                   146                (9)
Other comprehensive loss, net of taxes                 (74)               (4)
- --------------------------------------------------------------------------------
Balance - end of year                                   72               (13)
- --------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY                              $ 13,321          $ 10,690
===============================================================================

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

                                                                   Three Months Ended        Year Ended
                                                                |----------|            |-------|
                                                                |  DEC 31  |  Dec 31    | DEC 31|  Dec 31
(millions of Canadian dollars,                                  |  2007    |  2006      | 2007  |  2006
 unaudited)                                                     |          |            |       |
- ----------------------------------------------------------------|----------|------------|-------|------------
<S>                                                               <C>        <C>         <C>       <C>
NET EARNINGS                                                      $  798     $  313     $  2,608   $  2,524
- ------------------------------------------------------------------------------------------------------------
  NET CHANGE IN DERIVATIVE FINANCIAL INSTRUMENTS
     DESIGNATED AS CASH FLOW HEDGES
     Unrealized income during the period (net of taxes of
        $3 million - three months ended;
        $6 million - year ended)                                      32         -           38          -
     Reclassification to net earnings
        (net of taxes of $21 million
        - three months ended; $45 million - year ended)              (45)        -          (96)         -
- ------------------------------------------------------------------------------------------------------------
                                                                     (13)         -         (58)         -
- ------------------------------------------------------------------------------------------------------------
    FOREIGN CURRENCY TRANSLATION ADJUSTMENT
     Translation of net investment                                     -         2          (16)        (4)
     Hedge of net investment, net of tax                               -        (3)           -          -
- ------------------------------------------------------------------------------------------------------------
                                                                       -        (1)         (16)        (4)
- ------------------------------------------------------------------------------------------------------------
OTHER COMPREHENSIVE LOSS, NET OF TAXES                               (13)       (1)         (74)        (4)
- ------------------------------------------------------------------------------------------------------------
COMPREHENSIVE INCOME                                              $  785    $  312     $  2,534   $  2,520
============================================================================================================
</TABLE>


  CANADIAN NATURAL RESOURCES LIMITED                                         55
================================================================================
<PAGE>

<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                     Three Months Ended              Year Ended
                                                                |-----------|                 |---------|
                                                                | DEC 31    |    Dec 31       |  DEC 31 |       Dec 31
(millions of Canadian dollars,                                  | 2007      |    2006         |  2007   |       2006
 unaudited)                                                     |           |                 |         |
- ----------------------------------------------------------------|-----------|-----------------|---------|--------------
<S>                                                                <C>            <C>            <C>          <C>
OPERATING ACTIVITIES
Net earnings                                                      $      798    $    313      $   2,608    $     2,524
Non-cash items
   Depletion, depreciation and amortization                              719         724          2,863          2,391
   Asset retirement obligation accretion                                  17          18             70             68
   Stock-based compensation (recovery) expense                           (16)        176            193            139
   Unrealized risk management activities                                 845        (241)         1,400         (1,013)
   Unrealized foreign exchange (gain) loss                               (47)        171           (524)            134
   Deferred petroleum revenue tax expense   (recovery)                    17          (3)            44              37
   Future income tax (recovery) expense                                 (847)        135           (456)           652
Deferred charges and other                                                31           6             38             (2)
Abandonment expenditures                                                 (16)        (19)           (71)           (75)
Net change in non-cash working capital                                  (264)       (317)          (346)          (679)
- -----------------------------------------------------------------------------------------------------------------------
                                                                       1,237         963          5,819          4,176
- -----------------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
(Repayment) issue of bank credit facilities, net                        (128)      5,384         (1,925)          6,499
Issue of medium-term notes                                               398           -            273             400
Repayment of senior unsecured notes                                        -           -            (33)              -
Issue of US dollar debt securities                                         -           -          2,553             788
Issue of common shares on exercise of stock options                        2           4             21              21
Dividends on common shares                                               (46)        (40)          (178)           (153)
Purchase of common shares                                                  -           -              -             (28)
Net change in non-cash working capital                                     2          29              8              37
- -----------------------------------------------------------------------------------------------------------------------
                                                                         228       5,377            719           7,564
- -----------------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Expenditures on property, plant and equipment                         (1,603)     (1,791)        (6,464)         (7,266)
Net proceeds on sale of property, plant and equipment                    105          68            110              71
- -----------------------------------------------------------------------------------------------------------------------
Net expenditures on property, plant and equipment                     (1,498)     (1,723)        (6,354)         (7,195)
Acquisition of Anadarko Canada Corporation                                 -      (4,641)             -          (4,641)
Net change in non-cash working capital                                    33          35           (186)            101
- -----------------------------------------------------------------------------------------------------------------------
                                                                      (1,465)     (6,329)        (6,540)        (11,735)
- -----------------------------------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                           -          11             (2)              5
CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                           21          12             23              18
- -----------------------------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS - END OF PERIOD                         $       21    $     23      $      21    $         23
=======================================================================================================================
INTEREST PAID                                                     $      153    $     83      $     556    $        262
TAXES PAID
   Taxes other than income tax                                    $       13    $     52      $     116    $        291
   Current income tax                                             $      145    $    108      $     302    $        412
=======================================================================================================================
</TABLE>


   56                                         CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<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,
2006,  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 interim financial
statements   should  be  read  in  conjunction   with  the  Company's   audited
consolidated financial statements and notes thereto for the year ended December
31, 2006.

2.   CHANGE IN ACCOUNTING POLICY

FINANCIAL INSTRUMENTS AND COMPREHENSIVE INCOME

Effective  January 1, 2007,  the Company  adopted the following new  accounting
standards issued by the Canadian Institute of Chartered Accountants relating to
the accounting for and disclosure of financial  instruments  and  comprehensive
income:

o    Section  1530  -   "Comprehensive   Income"   introduces  the  concept  of
     comprehensive income to Canadian GAAP.  Comprehensive income is the change
     in equity  (net  assets) of the  Company  during a  reporting  period from
     transactions and other events and circumstances from non-owner sources. It
     includes all changes in equity  during a period except  transactions  with
     owners. The foreign currency translation adjustment,  which was previously
     a separate  component of shareholders'  equity, is now recorded as part of
     accumulated other comprehensive income.

o    Section 3251 - "Equity"  replaces Section 3250 - "Surplus" and establishes
     standards  for the  presentation  of equity and changes in equity during a
     reporting period.

o    Section 3855 -  "Financial  Instruments  -  Recognition  and  Measurement"
     prescribes when a financial asset,  financial liability,  or non-financial
     derivative  should  be  recognized  on the  balance  sheet  as well as its
     measurement amount.

o    Section  3865 -  "Hedges"  replaces  Accounting  Guideline  13 -  "Hedging
     Relationships"  and EIC 128 -  "Accounting  for  Trading,  Speculative  or
     Non-Hedging  Derivative  Financial  Instruments"  and  specifies how hedge
     accounting is to be applied and what  disclosures are necessary when hedge
     accounting is applied.

Adoption  of  these  standards  required  the  Company  to  record  all  of its
derivative  financial  instruments on the balance sheet at estimated fair value
as at January 1, 2007, including those designated as hedges. Designated hedges,
other than cross currency swaps,  were previously not recognized on the balance
sheet  but  were  disclosed  in the  notes  to the  financial  statements.  The
adjustment to recognize all designated hedges on the balance sheet was recorded
as an adjustment  to the opening  balance of retained  earnings or  accumulated
other comprehensive income, as appropriate.

With the  exception  of the  foreign  currency  translation  adjustment,  these
standards  were adopted  prospectively;  accordingly,  comparative  amounts for
prior  periods  have not been  restated.  The  reclassification  of the foreign
currency  translation  adjustment  to other  comprehensive  income was  applied
retroactively with prior period restatement.


  CANADIAN NATURAL RESOURCES LIMITED                                         57
================================================================================
<PAGE>

Effective  January 1, 2007,  the  Company's  accounting  policies for financial
instruments and comprehensive income are as follows:

RISK MANAGEMENT ACTIVITIES

The Company utilizes  various  derivative  financial  instruments to manage its
commodity  price,  currency  and  interest  rate  exposures.  These  derivative
financial instruments are not intended for trading or speculative purposes.

All derivative financial  instruments are recognized at estimated fair value on
the  consolidated  balance sheet at each balance sheet date. The estimated fair
value of  derivative  instruments  has  been  determined  based on  appropriate
internal valuation methodologies and/or third party indications. However, these
estimates  may not  necessarily  be  indicative  of the  amounts  that could be
realized or settled in a current market  transaction and these  differences may
be material.

The Company formally  documents all derivative  financial  instruments that are
designated   as  hedging   transactions   at  the   inception  of  the  hedging
relationship,  in accordance with the Company's risk management  policies.  The
effectiveness  of the hedging  relationship is evaluated,  both at inception of
the hedge and on an ongoing basis.

The  Company  periodically  enters into  commodity  price  contracts  to manage
anticipated  sales of crude oil and natural gas  production in order to protect
cash flow for capital expenditure programs. The effective portion of changes in
the fair value of derivative  commodity price contracts designated as cash flow
hedges  is  initially   recognized  in  other   comprehensive   income  and  is
reclassified to risk management  activities in consolidated net earnings in the
same  period or  periods  in which the crude oil or  natural  gas is sold.  The
ineffective portion of changes in the fair value of these designated  contracts
is immediately  recognized in risk management  activities in  consolidated  net
earnings. All changes in the fair value of non-designated crude oil and natural
gas commodity price  contracts are recognized in risk management  activities in
consolidated net earnings.

The Company  enters into  interest  rate swap  contracts to manage its fixed to
floating  interest rate mix on certain of its long-term debt. The interest rate
swap contracts  require the periodic  exchange of payments without the exchange
of the notional  principal amounts on which the payments are based.  Changes in
the fair value of interest rate swap contracts  designated as fair value hedges
and  corresponding  changes in the fair value of the hedged  long-term debt are
included in interest expense in consolidated net earnings.  Changes in the fair
value of  non-designated  interest  rate swap  contracts  are  included in risk
management activities in consolidated net earnings.

Cross currency swap contracts are periodically used to manage currency exposure
on US dollar  denominated  long-term  debt.  The cross  currency swap contracts
require the  periodic  exchange of  payments  with the  exchange at maturity of
notional principal amounts on which the payments are based. Changes in the fair
value of the  foreign  exchange  component  of cross  currency  swap  contracts
designated as cash flow hedges are included in foreign exchange in consolidated
net  earnings.  The  effective  portion  of  changes  in the fair  value of the
interest rate  component of cross  currency swap  contracts  designated as cash
flow  hedges  is  initially  included  in  other  comprehensive  income  and is
reclassified to interest  expense when realized,  with the ineffective  portion
recognized in risk management activities in consolidated net earnings.  Changes
in the fair value of non-designated  cross currency swap contracts are included
in risk management activities in consolidated net earnings.

Gains or losses on the  termination  of  financial  instruments  that have been
designated  as  cash  flow  hedges  are  deferred   under   accumulated   other
comprehensive  income on the  consolidated  balance  sheets and amortized  into
consolidated net earnings in the period in which the underlying  hedged item is
recognized.  In the event a  designated  hedged item is sold,  extinguished  or
matures prior to the  termination  of the related  derivative  instrument,  any
unrealized  derivative  gain or loss is recognized  immediately in consolidated
net earnings.  Gains or losses on the termination of financial instruments that
have not been designated as hedges are recognized in consolidated  net earnings
immediately.

Embedded derivatives are derivatives that are included in a non-derivative host
contract.  Embedded  derivatives are recorded at fair value separately from the
host contract when their economic characteristics and risks are not clearly and
closely related to the host contract.

Transaction costs that are directly attributable to the acquisition or issue of
a financial  asset or  financial  liability  and  original  issue  discounts on
long-term  debt  have  been  included  in the  carrying  value  of the  related
financial  asset or liability  and are amortized to  consolidated  net earnings
over the life of the financial instrument using the effective interest method.


   58                                         CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

COMPREHENSIVE INCOME

Comprehensive  income is  comprised  of the  Company's  net  earnings and other
comprehensive income. Other comprehensive income includes the effective portion
of changes in the fair value of derivative financial instruments  designated as
cash flow hedges and foreign currency  translation  gains and losses on the net
investment in self-sustaining foreign operations. Other comprehensive income is
shown net of related income taxes.

The effects of adopting  these  standards on the opening  balance sheet were as
follows:

                                                               |--------------|
                                                               |   JAN 1, 2007|
- ---------------------------------------------------------------|--------------|
Increased current portion of other long-term assets (1)        $       193
Decreased other long-term assets (2)                           $       (16)
Decreased long-term debt (3)                                   $       (72)
Increased retained earnings (4)                                $        10
Increased foreign currency translation adjustment (5)          $        13
Increased accumulated other comprehensive income (6)           $       146
Decreased current portion of future income tax asset (7)       $       (62)
Increased future income tax liability (7)                      $        18
- ------------------------------------------------------------------ ----------
(1)  RELATES TO THE  RECOGNITION  OF THE  CURRENT  PORTION OF THE FAIR VALUE OF
     DERIVATIVE FINANCIAL INSTRUMENTS DESIGNATED AS CASH FLOW HEDGES.

(2)  RELATES TO THE  RECOGNITION OF THE LONG-TERM  PORTION OF THE FAIR VALUE OF
     DERIVATIVE  FINANCIAL  INSTRUMENTS  DESIGNATED AS CASH FLOW AND FAIR VALUE
     HEDGES, AS WELL AS THE  RECLASSIFICATION OF TRANSACTION COSTS AND ORIGINAL
     ISSUE DISCOUNTS FROM DEFERRED CHARGES TO LONG-TERM DEBT.

(3)  RELATES  TO THE FAIR  VALUE  IMPACT OF  DERIVATIVE  FINANCIAL  INSTRUMENTS
     DESIGNATED  AS FAIR  VALUE  HEDGES,  AS WELL  AS THE  RECLASSIFICATION  OF
     TRANSACTION COSTS AND ORIGINAL ISSUE DISCOUNTS.

(4)  RELATES TO THE IMPACT ON ADOPTION OF THE MEASUREMENT OF INEFFECTIVENESS ON
     DERIVATIVE FINANCIAL INSTRUMENTS DESIGNATED AS CASH FLOW HEDGES.

(5)  RELATES TO THE  RETROACTIVE  RESTATEMENT OF FOREIGN  CURRENCY  TRANSLATION
     ADJUSTMENT TO ACCUMULATED OTHER COMPREHENSIVE INCOME.

(6)  RELATES TO THE  RECOGNITION  OF  ACCUMULATED  OTHER  COMPREHENSIVE  INCOME
     ARISING FROM THE  MEASUREMENT  OF  EFFECTIVENESS  ON DERIVATIVE  FINANCIAL
     INSTRUMENTS DESIGNATED AS CASH FLOW HEDGES.

(7)  RELATES TO THE FUTURE INCOME TAX IMPACTS OF THE ABOVE NOTED ADJUSTMENTS.

3.   OTHER LONG-TERM ASSETS

                                                |----------|
                                                |   DEC 31 |       Dec 31
                                                |     2007 |         2006
- ------------------------------------------------|----------|----------------
Deferred charges (note 2)                         $    28        $   109
Risk management (note 10)                               -            128
Other                                                  21             23
- --------------------------------------------------------------------------
                                                       49            260
Less: current portion                                  18            106
- --------------------------------------------------------------------------
                                                  $    31        $   154
==========================================================================


  CANADIAN NATURAL RESOURCES LIMITED                                         59
================================================================================
<PAGE>

4.   LONG-TERM DEBT

<TABLE>
<CAPTION>
                                                                     |--------------|-------------|
                                                                     |  PRO FORMA   |             |
                                                                     |    DEC 31    |     DEC 31  |        Dec 31
                                                                     |    2007(4)   |       2007  |        2006
- ---------------------------------------------------------------------|--------------|-------------|-----------------
<S>                                                                     <C>               <C>              <C>
CANADIAN DOLLAR DENOMINATED DEBT
Bank credit facilities (bankers' acceptances)                          $   3,510          $  4,696         $   6,621
Medium-term notes                                                          1,200             1,200               925
- --------------------------------------------------------------------------------------------------------------------
                                                                           4,710             5,896             7,546
- --------------------------------------------------------------------------------------------------------------------
US DOLLAR DENOMINATED DEBT
Senior unsecured notes
   (2007 - US$62 million; and 2006 - US$93 million)                           61                61               108
US dollar debt securities (2007 - US$5,108 million;
   and 2006 - US$2,908 million)                                            6,244             5,048             3,389
Less - original issue discount on senior unsecured
   notes and US dollar debt securities (1)                                   (24)              (23)                -
- --------------------------------------------------------------------------------------------------------------------
                                                                           6,281             5,086             3,497
Change in fair value of interest rate swaps on US dollar
   debt securities (2)                                                         9                 9                 -
- --------------------------------------------------------------------------------------------------------------------
                                                                           6,290             5,095             3,497
- --------------------------------------------------------------------------------------------------------------------
Long-term debt before transaction costs                                   11,000            10,991            11,043
Less - transaction costs (1) (3)                                             (60)              (51)                -
- --------------------------------------------------------------------------------------------------------------------
                                                                       $  10,940          $ 10,940         $  11,043
====================================================================================================================
</TABLE>
(1)  AS  DESCRIBED  IN NOTE 2,  EFFECTIVE  JANUARY 1,  2007,  THE  COMPANY  HAS
     INCLUDED  UNAMORTIZED  ORIGINAL ISSUE DISCOUNTS AND DIRECTLY  ATTRIBUTABLE
     TRANSACTION COSTS IN THE CARRYING VALUE OF THE OUTSTANDING DEBT.

(2)  THE CARRYING  VALUES OF US$350 MILLION OF 5.45% NOTES DUE OCTOBER 2012 AND
     US$350  MILLION OF 4.90% NOTES DUE DECEMBER  2014 HAVE BEEN ADJUSTED BY $9
     MILLION TO REFLECT THE FAIR VALUE IMPACT OF HEDGE ACCOUNTING (NOTE 2).

(3)  TRANSACTION COSTS PRIMARILY REPRESENT UNDERWRITING  COMMISSIONS CHARGED AS
     A  PERCENTAGE  OF THE RELATED  DEBT  OFFERINGS,  AS WELL AS LEGAL,  RATING
     AGENCY AND OTHER PROFESSIONAL FEES.

(4)  ON  JANUARY  10,  2008,  THE  COMPANY  ISSUED  US$1,200  MILLION  OF  DEBT
     SECURITIES.  THE PRO FORMA GIVES EFFECT TO THE PROCEEDS AND THEIR  INITIAL
     USE.

BANK CREDIT FACILITIES

As at  December  31,  2007,  the  Company  had in place  unsecured  bank credit
facilities of $6,209 million, comprised of:

|X|  a $100 million demand credit facility;

|X|  a  non-revolving  syndicated  credit  facility of $2,350 million  maturing
     October 2009;

|X|  a revolving  syndicated  credit  facility of $2,230 million  maturing June
     2012;

|X|  a revolving  syndicated  credit  facility of $1,500 million  maturing June
     2012; and

|X|  a (pound)15  million demand credit facility related to the Company's North
     Sea operations.

During  the second  quarter of 2007,  one of the  revolving  syndicated  credit
facilities  was  increased  from  $1,825  million to $2,230  million and a $500
million demand credit facility was terminated.  The revolving syndicated credit
facilities  were also extended and now mature June 2012.  Both  facilities  are
extendible annually for one year periods at the mutual agreement of the Company
and the lenders.  If the  facilities  are not extended,  the full amount of the
outstanding principal would be repayable on the maturity date.

In  conjunction  with  the  closing  of  the  acquisition  of  Anadarko  Canada
Corporation  in  November  2006,  the  Company   executed  a  $3,850   million,
non-revolving  syndicated  credit  facility  maturing in October 2009. In March
2007, $1,500 million was repaid, reducing the facility to $2,350 million.


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

The weighted average interest rate of the bank credit facilities outstanding at
December 31, 2007, was 5.2% (December 31, 2006 - 4.8%).

In addition to the outstanding debt, letters of credit and financial guarantees
aggregating  $345 million,  including  $300 million  related to the Horizon Oil
Sands Project ("Horizon Project"), were outstanding at December 31, 2007.

MEDIUM-TERM NOTES

In December 2007,  the Company issued $400 million of unsecured  notes maturing
December 2010,  bearing interest at 5.50%.  Proceeds from the securities issued
were  used to repay  bankers'  acceptances  under  the  Company's  bank  credit
facilities.  After issuing  these  securities,  the Company has $2,600  million
remaining on its  outstanding  $3,000  million base shelf  prospectus  filed in
September 2007 that allows for the issue of  medium-term  notes in Canada until
October 2009. If issued,  these  securities will bear interest as determined at
the date of issuance.

During the first quarter of 2007,  $125 million of 7.40%  unsecured  debentures
due March 1, 2007 were repaid.

SENIOR UNSECURED NOTES

During the second quarter of 2007,  US$31 million of the senior unsecured notes
were repaid.

US DOLLAR DEBT SECURITIES

In March  2007,  the  Company  issued  US$2,200  million  of  unsecured  notes,
comprised of US$1,100 million of unsecured notes maturing May 2017 and US$1,100
million of unsecured notes maturing March 2038,  bearing  interest at 5.70% and
6.25%,  respectively.  Concurrently,  the Company  entered into cross  currency
interest rate swaps to fix the Canadian dollar interest and principal repayment
amounts on the entire US$1,100 million of unsecured notes due May 2017 at 5.10%
and C$1,287  million (note 10). The Company also entered into a cross  currency
interest rate swap to fix the Canadian dollar interest and principal  repayment
amounts on US$550 million of unsecured  notes due March 2038 at 5.76% and C$644
million  (note 10).  Proceeds  from the  securities  issued  were used to repay
bankers' acceptances under the Company's bank credit facilities.

During the first quarter of 2007, the Company  de-designated the portion of the
US dollar  denominated debt previously  hedged against its net investment in US
dollar  based  self-sustaining  foreign  operations.  Accordingly,  all foreign
exchange  (gains)  losses  arising  each  period  on  U.S.  dollar  denominated
long-term debt are now recognized in the consolidated statement of earnings.

In September  2007, the Company filed a base shelf  prospectus  that allows for
the issue of up to US$3,000  million of debt  securities  in the United  States
until October 2009.

Subsequent  to December  31,  2007,  the  Company  issued  US$1,200  million of
unsecured  notes  under  this US base  shelf  prospectus,  comprised  of US$400
million of 5.15%  unsecured  notes due February  2013,  US$400 million of 5.90%
unsecured  notes due February 2018, and US$400 million of 6.75% unsecured notes
due  February  2039.  Proceeds  from the  securities  issued were used to repay
bankers' acceptances under the Company's bank credit facilities.  After issuing
these securities, the Company has US$1,800 million remaining on its outstanding
US$3,000 million base shelf prospectus.  If issued,  these securities will bear
interest as determined at the date of issuance.


  CANADIAN NATURAL RESOURCES LIMITED                                         61
================================================================================

<PAGE>

5.   OTHER LONG-TERM LIABILITIES

                                      |-----------|
                                      |    DEC 31 |                   Dec 31
                                      |      2007 |                     2006
- --------------------------------------|-----------|-----------------------------
Asset retirement obligations            $  1,074                    $  1,166
Stock-based compensation                     529                         744
Risk management (note 10)                  1,474                           -
Other                                        101                          94
- -------------------------------------------------------------------------------
                                           3,178                       2,004
Less: current portion                      1,617                         611
- -------------------------------------------------------------------------------
                                        $  1,561                    $  1,393
===============================================================================

ASSET RETIREMENT OBLIGATIONS

At December 31, 2007, the Company's  total  estimated costs to settle its asset
retirement  obligations were approximately  $4,426 million (December 31, 2006 -
$4,497  million).  These costs will be incurred over the lives of the operating
assets and have been discounted using a weighted average  credit-adjusted  risk
free  rate  of  6.6%.  A  reconciliation  of the  discounted  asset  retirement
obligations is as follows:

                                      |--------------|
                                      | YEAR ENDED   |              Year Ended
                                      | DEC 31, 2007 |             Dec 31, 2006
- --------------------------------------|--------------|--------------------------
Balance - beginning of year             $  1,166                    $  1,112
         Liabilities incurred                 21                          26
         Liabilities (disposed)
           acquired                          (65)                         56
         Liabilities settled                 (71)                        (75)
         Asset retirement
           obligation accretion               70                          68
         Revision of estimates                35                         (21)
         Foreign exchange                    (82)                          -
- -------------------------------------------------------------------------------
Balance - end of year                   $  1,074                    $  1,166
===============================================================================


   62                                         CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

STOCK-BASED COMPENSATION

The Company recognizes a liability for the potential cash settlements under its
Stock Option Plan.  The current  portion  represents  the maximum amount of the
liability  payable  within the next 12-month  period if all vested  options are
surrendered for cash settlement.

                                      |--------------|
                                      | YEAR ENDED   |              Year Ended
                                      | DEC 31, 2007 |             Dec 31, 2006
- -------------------------------------------------------------------------------
Balance - beginning of year              $    744                    $   891
         Stock-based compensation             193                        139
         Payments for options
           surrendered                       (375)                      (264)
         Transferred to common
           shares                             (91)                      (101)
         Capitalized to Horizon
           Project                             58                         79
- -------------------------------------------------------------------------------
Balance - end of year                         529                        744
Less: current portion of
   stock-based compensation                   390                        611
- -------------------------------------------------------------------------------
                                         $    139                    $   133
===============================================================================

6.    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
                                              |  2007    |    2006   |   2007  |    2006
- ----------------------------------------------|----------|-----------|---------|----------
<S>                                            <C>          <C>       <C>          <C>

Current income tax - North America             $    31      $   51    $   96       $   143
Current income tax - North Sea                      65          30       210            30
Current income tax - Offshore West Africa           27          14        74            49
- ------------------------------------------------------------------------------------------
Current income tax expense                         123          95       380           222
Future income tax (recovery) expense              (847)        135      (456)          652
- ------------------------------------------------------------------------------------------
Income tax (recovery) expense                  $  (724)     $  230    $  (76)      $   874
==========================================================================================
</TABLE>

Taxable  income from the  conventional  crude oil and  natural gas  business in
Canada is primarily  generated  through  partnerships,  with the related income
taxes payable in a future period.  North America current income taxes have been
provided  on the basis of the  corporate  structure  and  available  income tax
deductions  and will vary  depending  upon the  nature,  timing  and  amount of
capital expenditures incurred in Canada in any particular year.

During the fourth quarter of 2007, the Canadian Federal  Government  enacted or
substantively enacted income tax rate and other legislative changes,  resulting
in a reduction of future income tax liabilities of approximately $793 million.

During the second  quarter of 2007,  the Canadian  Federal  Government  enacted
income  tax rate  changes,  resulting  in a  reduction  of  future  income  tax
liabilities of approximately $71 million.

During the first quarter of 2006,  enacted income tax rate changes  resulted in
an increase of future income tax liabilities of  approximately  $110 million in
the UK North Sea.

During the second quarter of 2006,  enacted income tax rate changes resulted in
a reduction of future income tax liabilities of  approximately  $438 million in
North America.

During the third quarter of 2006, enacted income tax rate changes resulted in a
reduction of future income tax liabilities of approximately $67 million in Cote
d'Ivoire, Offshore West Africa.


  CANADIAN NATURAL RESOURCES LIMITED                                         63
================================================================================
<PAGE>

7.    SHARE CAPITAL

<TABLE>
<CAPTION>
                                                                                |-----------------------------------|
                                                                                |          Year Ended Dec 31, 2007  |
ISSUED                                                                          | NUMBER OF SHARES                  |
COMMON SHARES                                                                   |      (thousands)         AMOUNT   |
- --------------------------------------------------------------------------------|-----------------------------------|
<S>                                                                               <C>                    <C>

Balance - beginning of year                                                         537,903              $  2,562
         Issued upon exercise of stock options                                        1,826                    21
         Previously recognized liability on stock options exercised
             for common shares                                                            -                    91
- --------------------------------------------------------------------------------------------------------------------
Balance - end of year                                                               539,729              $  2,674
====================================================================================================================
</TABLE>

NORMAL COURSE ISSUER BID

During 2007,  the Company did not purchase any common  shares for  cancellation
pursuant to the Normal  Course  Issuer Bid  previously  filed for the  12-month
period beginning  January 24, 2007 and ending January 23, 2008. The Company has
not renewed the Normal Course Issuer Bid in 2008.

DIVIDEND POLICY

In February 2008, the Board of Directors set the regular quarterly  dividend at
$0.10 per common  share.  The Company has paid regular  quarterly  dividends in
January,  April, July, and October of each year since 2001. The dividend policy
undergoes a periodic review by the Board of Directors and is subject to change.

In March 2007,  the Board of Directors  set the regular  quarterly  dividend at
$0.085 per common share (2006 - $0.075 per common share).

<TABLE>
<CAPTION>
STOCK OPTIONS

                                                                   |--------------------------------------------|
                                                                   |     Year Ended Dec 31, 2007                |
                                                                   |  STOCK OPTIONS           WEIGHTED AVERAGE  |
                                                                   |    (thousands)             EXERCISE PRICE  |
- -------------------------------------------------------------------|--------------------------------------------|
<S>                                                                        <C>                  <C>
Outstanding - beginning of year                                            34,425                $  33.77
         Granted                                                            7,498                $  70.03
         Surrendered for cash settlement                                   (7,249)               $  16.10
         Exercised for common shares                                       (1,826)               $  11.71
         Forfeited                                                         (2,199)               $  46.46
- ----------------------------------------------------------------------------------------------------------------
Outstanding - end of year                                                  30,649                $  47.23
- ----------------------------------------------------------------------------------------------------------------
Exercisable - end of year                                                   7,640                $  30.00
================================================================================================================
</TABLE>


   64                                         CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>

8.    ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The components of accumulated other comprehensive  income (loss), net of taxes,
were as follows:

<TABLE>
<CAPTION>
                                                                     |----------|
                                                                     | DEC 31   |   Dec 31
                                                                     |   2007   |     2006
- ---------------------------------------------------------------------|----------|-----------------
<S>                                                                  <C>            <C>
Derivative financial instruments designated as cash flow hedges       $   101       $       -
Foreign currency translation adjustment                                   (29)             (13)
- ------------------------------------------------------------------------------------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)                         $    72       $      (13)
================================================================================================
</TABLE>

9.    NET EARNINGS PER COMMON SHARE

<TABLE>
<CAPTION>
                                                                Three Months Ended                  Year Ended
                                                             |----------|                 |---------|
                                                             |  DEC 31  |     Dec 31      |  DEC 31 |  Dec 31
                                                             |    2007  |       2006      |   2007  |   2006
- -------------------------------------------------------------|----------|-----------------|---------|------------
<S>                                                          <C>          <C>              <C>         <C>

Weighted average common shares outstanding (thousands) -       539,652      537,616         539,336       537,339
   basic and diluted
- -----------------------------------------------------------------------------------------------------------------
Net earnings - basic and diluted                             $     798    $     313        $  2,608    $    2,524
- -----------------------------------------------------------------------------------------------------------------
Net earnings per common share - basic and diluted            $    1.48    $    0.58        $   4.84    $     4.70
=================================================================================================================
</TABLE>


  CANADIAN NATURAL RESOURCES LIMITED                                         65
================================================================================


<PAGE>

10.   FINANCIAL INSTRUMENTS

RISK MANAGEMENT

The Company  uses  derivative  financial  instruments  to manage its  commodity
price,   foreign   currency  and  interest  rate  exposures.   These  financial
instruments  are entered into solely for hedging  purposes and are not intended
for trading or other speculative  purposes.

As described in note 2, commencing January 1, 2007, the Company recorded all of
its  derivative  financial  instruments  on the  balance  sheet at fair  value,
including  those  designated  as  hedges.  As at  December  31,  2006,  the net
unrecognized asset related to the estimated fair values of derivative financial
instruments designated as hedges was $222 million.

The estimated fair values of derivative financial instruments recognized in the
risk management asset (liability) were comprised as follows:

<TABLE>
<CAPTION>
                                                            |---------------|
                                                            |  YEAR ENDED   |     Year Ended
                                                            | DEC 31, 2007  |    Dec 31, 2006
- ------------------------------------------------------------|---------------|-----------------------------
Asset (liability)                                           RISK MANAGEMENT     Risk management   Deferred
                                                             MARK-TO-MARKET      mark-to-market    revenue
- ----------------------------------------------------------------------------------------------------------
<S>                                                          <C>                <C>               <C>
Balance - beginning of year                                  $    128           $     (877)       $   (8)
Retained earnings effect of adoption of financial
   instrument standards (note 2)                                   14                    -             -
Net cost of outstanding put options                                58                  455             -
Net change in fair value of outstanding derivative
   financial instruments attributable to:
      - Risk management activities                             (1,400)               1,005             -
      - Interest expense                                            9                    -             -
      - Foreign exchange                                         (350)                   -             -
      - Other comprehensive income                                125                    -             -
Amortization of deferred revenue                                    -                    -             8
- ----------------------------------------------------------------------------------------------------------
                                                               (1,416)                 583             -
Add: Put premium financing obligations (1)                        (58)                (455)            -
- ----------------------------------------------------------------------------------------------------------
Balance - end of year                                          (1,474)                 128             -
Less: current portion                                          (1,227)                  88             -
- ----------------------------------------------------------------------------------------------------------
                                                             $   (247)          $       40        $    -
==========================================================================================================
</TABLE>
(1)  THE COMPANY HAS  NEGOTIATED  PAYMENT OF PUT OPTION  PREMIUMS  WITH VARIOUS
     COUNTER-PARTIES  AT THE  TIME  OF  ACTUAL  SETTLEMENT  OF  THE  RESPECTIVE
     OPTIONS.  THESE OBLIGATIONS HAVE BEEN REFLECTED IN THE NET RISK MANAGEMENT
     ASSET (LIABILITY).


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

Net losses (gains) from risk management activities were as follows:

<TABLE>
<CAPTION>
                                         Three Months Ended            Year Ended
                                      |----------|             |----------|
                                      |  DEC 31  |  Dec 31     |  DEC 31  |    Dec 31
                                      |    2007  |    2006     |    2007  |      2006
- --------------------------------------|----------|-------------|----------|--------------
<S>                                   <C>           <C>        <C>           <C>
Net realized risk management loss      $    181    $   126    $      162     $  1,325
Net unrealized risk management
   mark-to-market loss (gain)               845       (241)        1,400       (1,013)
- -----------------------------------------------------------------------------------------
                                       $  1,026    $  (115)   $    1,562     $    312
=========================================================================================
</TABLE>

The Company had the  following  net  financial  derivatives  outstanding  as at
December 31, 2007:

<TABLE>
<CAPTION>
                                      Remaining term               Volume              Weighted average
                                                                                             price                      INDEX
- ------------------------------------------------------------------------------------------------------------------------------
<S>                              <C>                           <C>                  <C>                           <C>
         CRUDE OIL
Crude oil price collars (1)      Jan 2008  -  Mar 2008         50,000 bbl/d          US$60.00  -   US$80.06               WTI
                                 Jan 2008  -  Jun 2008         25,000 bbl/d          US$60.00  -   US$80.44               WTI
                                 Apr 2008  -  Sep 2008         25,000 bbl/d          US$60.00  -   US$80.46               WTI
                                 Jul 2008  -  Sep 2008         25,000 bbl/d          US$70.00  -  US$123.75               WTI
                                 Oct 2008  -  Dec 2008         25,000 bbl/d          US$70.00  -  US$112.63               WTI
                                 Jan 2008  -  Dec 2008         20,000 bbl/d          US$50.00  -   US$65.53       Mayan Heavy
                                 Jan 2008  -  Dec 2008         50,000 bbl/d          US$60.00  -   US$75.22               WTI
                                 Jan 2008  -  Dec 2008         50,000 bbl/d          US$60.00  -   US$76.05               WTI
                                 Jan 2008  -  Dec 2008         50,000 bbl/d          US$60.00  -   US$76.98               WTI
Crude oil puts                   Jan 2008  -  Dec 2008         50,000 bbl/d                    -   US$55.00               WTI
==============================================================================================================================
</TABLE>
(1)  SUBSEQUENT TO DECEMBER 31, 2007, THE COMPANY  ENTERED INTO 25,000 BBL/D OF
     US$70.00 - US$111.56 WTI COLLARS FOR THE PERIOD JANUARY TO DECEMBER 2009.

The net cost of  outstanding  put  options  and  their  respective  periods  of
settlement are as follows:


                                              Q1 2008  Q2 2008  Q3 2008  Q4 2008
- -------------------------------------------------------------------------------
Cost ($ millions)                             US$14    US$15    US$15     US$15
- -------------------------------------------------------------------------------

                       Remaining term         Volume    Weighted average
                                                              price        INDEX
- --------------------------------------------------------------------------------
NATURAL GAS
AECO price
   collars         Jan 2008  -  Mar 2008   400,000 GJ/d  C$7.00 -  C$14.08  AECO
                   Jan 2008  -  Mar 2008   500,000 GJ/d  C$7.50 -  C$10.81  AECO
================================================================================

The Company's  outstanding  commodity financial  derivatives are expected to be
settled  monthly  based on the  applicable  index  pricing  for the  respective
contract month.


  CANADIAN NATURAL RESOURCES LIMITED                                         67
================================================================================

<PAGE>

<TABLE>
<CAPTION>
                                                            Amount
                               Remaining Term         ($ millions)      Fixed Rate              Floating Rate
- --------------------------------------------------------------------------------------------------------------
<S>                         <C>                             <C>              <C>            <C>
INTEREST RATE
Swaps - fixed to floating   Jan 2008  -  Oct 2012           US$350           5.45%          LIBOR (1) + 0.81%
                            Jan 2008  -  Dec 2014           US$350           4.90%          LIBOR (1) + 0.38%
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1)   LONDON INTERBANK OFFERED RATE

<TABLE>
<CAPTION>
                                                                         Exchange        Exchange
                                                            Amount           rate            rate      Interest rate
                                 Remaining Term       ($ millions)       (US$/C$)           (US$)               (C$)
- ----------------------------------------------------------------------------------------------------------------------
<S>                         <C>                           <C>            <C>             <C>           <C>
CROSS CURRENCY
Swaps                       Jan 2008  -  Aug 2016           US$250          1.116           6.00%              5.40%
                            Jan 2008  -  May 2017         US$1,100          1.170           5.70%              5.10%
                            Jan 2008  -  Mar 2038           US$550          1.170           6.25%              5.76%
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>

11.   COMMITMENTS

The Company has committed to certain payments as follows:

<TABLE>
<CAPTION>
                                 2008        2009        2010        2011       2012       Thereafter
- -------------------------------------------------------------------------------------------------------
                                 <S>         <C>         <C>         <C>        <C>        <C>
Product transportation and       $    232    $  151      $   137     $  109     $   91     $    972
   pipeline
Offshore equipment operating
   leases (1)                    $    114    $  129      $   113     $  111     $   90     $    387
Offshore drilling (2) (3)        $    267    $  185      $    39     $    -     $    -     $      -
Asset retirement
   obligations (4)               $     33    $    4      $     5     $    4     $    4     $  4,376
Office leases                    $     26    $   28      $    28     $   22     $    3     $      -
Electricity and other            $    166    $  173      $    25     $    4     $    -     $      -
=======================================================================================================
</TABLE>
(1)  OFFSHORE EQUIPMENT OPERATING LEASES ARE PRIMARILY COMPRISED OF OBLIGATIONS
     RELATED TO FLOATING  PRODUCTION,  STORAGE AND  OFFTAKE  VESSELS  ("FPSO").
     DURING 2006, THE COMPANY  ENTERED INTO AN AGREEMENT TO LEASE AN ADDITIONAL
     FPSO  COMMENCING  IN  2008,  IN  CONNECTION  WITH  THE  PLANNED   OFFSHORE
     DEVELOPMENT IN GABON,  OFFSHORE WEST AFRICA.  DURING THE INITIAL TERM, THE
     TOTAL  ANNUAL  PAYMENTS  FOR THE  GABON  FPSO  ARE  ESTIMATED  TO BE US$50
     MILLION.

(2)  DURING 2007,  THE COMPANY  ENTERED INTO A ONE-YEAR  AGREEMENT FOR OFFSHORE
     DRILLING  SERVICES RELATED TO THE BAOBAB FIELD IN COTE D'IVOIRE,  OFFSHORE
     WEST AFRICA.  THE  AGREEMENT IS SCHEDULED TO COMMENCE IN 2008,  SUBJECT TO
     RIG AVAILABILITY.  ESTIMATED TOTAL PAYMENTS OF US$100 MILLION, AFTER JOINT
     VENTURE RECOVERIES, HAVE BEEN INCLUDED IN THIS TABLE FOR THE PERIOD 2008 -
     2009.

(3)  DURING 2007, THE COMPANY AWARDED  CONTRACTS FOR A DRILLING RIG AND FOR THE
     CONSTRUCTION OF WELLHEAD  TOWERS IN CONNECTION  WITH THE PLANNED  OFFSHORE
     DEVELOPMENT IN GABON,  OFFSHORE WEST AFRICA.  ESTIMATED  TOTAL PAYMENTS OF
     US$393  MILLION  HAVE BEEN  INCLUDED  IN THIS TABLE FOR THE PERIOD  2008 -
     2010.

(4)  AMOUNTS  REPRESENT   MANAGEMENT'S  ESTIMATE  OF  THE  FUTURE  UNDISCOUNTED
     PAYMENTS  TO SETTLE  ASSET  RETIREMENT  OBLIGATIONS  RELATED  TO  RESOURCE
     PROPERTIES,   FACILITIES,  AND  PRODUCTION  PLATFORMS,  BASED  ON  CURRENT
     LEGISLATION AND INDUSTRY  OPERATING  PRACTICES.  AMOUNTS DISCLOSED FOR THE
     PERIOD 2008 - 2012  REPRESENT THE MINIMUM  REQUIRED  EXPENDITURES  TO MEET
     THESE OBLIGATIONS.  ACTUAL  EXPENDITURES IN ANY PARTICULAR YEAR MAY EXCEED
     THESE MINIMUM AMOUNTS.

In  addition  to  the  amounts   disclosed  above,  the  Company  has  budgeted
construction  costs of  approximately  $1.7  billion to $1.9  billion  for 2008
related to the planned completion of Phase 1 of the Horizon Project.


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

12.   SEGMENTED INFORMATION

<TABLE>
<CAPTION>
                                           NORTH AMERICA                      NORTH SEA                OFFSHORE WEST AFRICA
(millions of Canadian            Three Months                       Three Months                     Three Months
dollars,                             Ended           Year Ended         Ended        Year Ended          Ended          Year Ended
   unaudited)                       Dec 31             Dec 31           Dec 31           Dec 31          Dec 31            Dec 31
                            |--------|          |-------|          |------|        |-------|        |------|         |------|
                            |  2007  |   2006   |  2007 |   2006   | 2007 | 2006   |  2007 |   2006 | 2007 |  2006   | 2007 | 2006
- ----------------------------|--------|----------|-------|----------|------|--------|-------|--------|------|---------|------|-----
<S>                          <C>        <C>     <C>       <C>      <C>     <C>      <C>       <C>   <C>      <C>    <C>      <C>
SEGMENTED REVENUE             2,571     2,243    10,149    9,066      367    352     1,597    1,616    260     232      776    950
Less: royalties                (317)     (305)   (1,318)  (1,203)      (1)    (1)       (3)      (3)   (25)    (11)     (70)   (39)

- ----------------------------------------------------------------------------------------------------------------------------------
SEGMENTED REVENUE, NET OF     2,254     1,938     8,831    7,863      366    351     1,594    1,613    235     221      706    911
   ROYALTIES
- ----------------------------------------------------------------------------------------------------------------------------------
SEGMENTED EXPENSES
Production                      377       400     1,642    1,436       79     77       432      390     31      38       94    106
Transportation and
   blending                     473       337     1,595    1,465        4      4        16       15      1       1        1      1
Depletion, depreciation
   and amortization             602       580     2,350    1,897       69     85       340      297     46      57      165    189
Asset retirement
   obligation accretion          10         9        38       35        7      9        30       31      -       -        2      2
Realized risk management
   activities                   182        76       129    1,022       (1)    50        33      303      -       -        -      -
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL SEGMENTED EXPENSES      1,644     1,402     5,754    5,855      158    225       851    1,036     78      96      262    298
- ----------------------------------------------------------------------------------------------------------------------------------
SEGMENTED EARNINGS (LOSS)       610       536     3,077    2,008      208    126       743      577    157     125      444    613
   BEFORE THE FOLLOWING
- ----------------------------------------------------------------------------------------------------------------------------------
NON-SEGMENTED EXPENSES
Administration
Stock-based compensation
   (recovery) expense
   Interest, net Unrealized
   risk management activities
Foreign exchange (gain)
   loss
- ------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-SEGMENTED
   EXPENSES
- ------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAXES
Taxes other than income
   tax
Current income tax expense
Future income tax
   (recovery) expense
- ------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS
==============================================================================================================================
</TABLE>


  CANADIAN NATURAL RESOURCES LIMITED                                         69
================================================================================
<PAGE>

<TABLE>
<CAPTION>
                                           MIDSTREAM                INTER-SEGMENT ELIMINATION
                                                                            AND OTHER                         TOTAL
(millions of Canadian           Three Months                       Three Months                     Three Months
dollars,                            Ended          Year Ended         Ended        Year Ended           Ended        Year Ended
   unaudited)                      Dec 31            Dec 31           Dec 31           Dec 31           Dec 31         Dec 31
                           |--------|         |-------|          |------|        |-------|         |------|         |------|
                           |  2007  |   2006  |  2007 |   2006   | 2007 | 2006   |  2007 |   2006  | 2007 |  2006   | 2007 |  2006
- ---------------------------|--------|---------|-------|----------|------|--------|-------|---------|------|---------|------|-------
<S>                         <C>        <C>    <C>       <C>      <C>     <C>      <C>       <C>    <C>      <C>      <C>      <C>
SEGMENTED REVENUE               19        18       74       72      (17)   (19)      (53)     (61)  3,200   2,826    12,543  11,643
Less: royalties                  -         -        -        -         -     -         -        -    (343)   (317)   (1,391) (1,245)
- -----------------------------------------------------------------------------------------------------------------------------------

SEGMENTED REVENUE, NET OF       19        18       74       72      (17)   (19)      (53)     (61)  2,857   2,509    11,152  10,398
   ROYALTIES
- -----------------------------------------------------------------------------------------------------------------------------------
SEGMENTED EXPENSES
Production                       6         6       22       23       (2)    (2)       (6)      (6)    491     519     2,184   1,949
Transportation and blending      -         -        -        -      (11)    (9)      (42)     (38)    467     333     1,570   1,443
Depletion, depreciation and
   amortization                  2         2        8        8        -      -         -        -     719     724     2,863   2,391
Asset retirement obligation
   accretion                     -         -        -        -        -      -         -        -      17      18        70      68
Realized risk management
   activities                    -         -        -        -        -      -         -        -     181     126       162   1,325
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL SEGMENTED EXPENSES         8         8       30       31      (13)    (11)     (48)     (44)  1,875   1,720     6,849   7,176
- -----------------------------------------------------------------------------------------------------------------------------------
SEGMENTED EARNINGS (LOSS)
   BEFORE THE FOLLOWING         11        10       44       41       (4)     (8)      (5)     (17)    982     789     4,303   3,222
- -----------------------------------------------------------------------------------------------------------------------------------
NON-SEGMENTED EXPENSES
Administration                                                                                         42      57       208     180
Stock-based compensation
   (recovery) expense                                                                                 (16)    176       193     139
Interest, net                                                                                          51      62       276     140
Unrealized risk management
   activities                                                                                         845    (241)    1,400  (1,013)
Foreign exchange (gain)
   loss                                                                                               (47)    151      (471)    122
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL NON-SEGMENTED EXPENSES                                                                          875     205     1,606    (432)
- -----------------------------------------------------------------------------------------------------------------------------------
EARNINGS BEFORE TAXES                                                                                 107     584     2,697   3,654
Taxes other than income tax                                                                            33      41       165     256
Current income tax expense                                                                            123      95       380     222
Future income tax
   (recovery) expense                                                                                (847)    135      (456)    652
- -----------------------------------------------------------------------------------------------------------------------------------
NET EARNINGS                                                                                          798     313     2,608   2,524
===================================================================================================================================
</TABLE>


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

<TABLE>
<CAPTION>
NET ADDITIONS TO PROPERTY, PLANT AND EQUIPMENT

                                                                  Year Ended
                                        DEC 31, 2007                                            Dec 31, 2006
                            |------------------------------------------------|
                            | NET EXPENDITURES  NON CASH/FAIR     CAPITALIZED|       Net        Non Cash/Fair       Capitalized
                            |                  VALUE CHANGES(1)     COSTS    |  Expenditures   Value Changes(1)         Costs
- -----------------------------------------------------------------------------|-------------------------------------------------
<S>                         <C>              <C>                <C>            <C>         <C>               <C>
North America               $    2,428       $    52            $  2,480         $   7,936       $   1,521         $   9,457
North Sea                          439           (77)                362               646             (14)              632
Offshore West Africa               159           (11)                148               134               1               135
Other                                1             -                   1                11               -                11
Horizon Project (2)              3,301             -               3,301             3,185               -             3,185
Midstream                            6             -                   6                12               -                12
Head office                         20             -                  20                26               -                26
- -------------------------------------------------------------------------------------------------------------------------------
                            $    6,354       $   (36)           $  6,318         $  11,950       $   1,508         $  13,458
===============================================================================================================================
</TABLE>
(1)  ASSET  RETIREMENT  OBLIGATIONS,  FUTURE INCOME TAX ADJUSTMENTS  RELATED TO
     DIFFERENCES  BETWEEN  CARRYING  VALUE AND TAX VALUE,  AND OTHER FAIR VALUE
     ADJUSTMENTS.

(2)  NET EXPENDITURES FOR THE HORIZON PROJECT ALSO INCLUDE CAPITALIZED INTEREST
     AND STOCK-BASED COMPENSATION.

<TABLE>
<CAPTION>
                                   Property, plant and
                                          equipment                      Total assets

                                   |---------|                    |-------|
                                   |  DEC 31 |   Dec 31           |DEC 31 |           Dec 31
                                   |    2007 |     2006           | 2007  |            2006
- -----------------------------------|---------|--------------------|-------|-------------------
<S>                               <C>         <C>              <C>                 <C>
SEGMENTED ASSETS
North America                     $  22,033    $  21,879       $  23,617           $  23,670
North Sea                             1,728        2,029           1,957               2,248
Offshore West Africa                  1,188        1,204           1,354               1,323
Other                                    25           24              41                  46
Horizon Project                       8,651        5,350           8,740               5,444
Midstream                               205          207             333                 355
Head office                              72           74              72                  74
- ----------------------------------------------------------------------------------------------
                                  $  33,902    $  30,767       $  36,114           $  33,160
==============================================================================================
</TABLE>

CAPITALIZED INTEREST


The Company  capitalizes  construction period interest based on Horizon Project
costs incurred and the Company's cost of borrowing.  Interest capitalization on
a  particular  development  phase  ceases once  construction  is  substantially
complete and this phase of the Horizon  Project is  available  for its intended
use. For the year ended December 31, 2007, pre-tax interest of $356 million was
capitalized to the Horizon Project (December 31, 2006 - $196 million).


  CANADIAN NATURAL RESOURCES LIMITED                                         71
================================================================================

<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  September  2007.  These  ratios  are  based  on  the  Company's  interim
consolidated   financial  statements  that  are  prepared  in  accordance  with
accounting principles generally accepted in Canada.

Interest coverage ratios for the twelve month period ended December 31, 2007:

- -------------------------------------------------------------------------------
Interest coverage (times)
     Net earnings (1)                                                      4.4x
     Cash flow from operations (2)                                        10.8x
===============================================================================

(1)  NET EARNINGS PLUS INCOME TAXES AND INTEREST EXPENSE; DIVIDED BY THE SUM OF
     INTEREST EXPENSE AND CAPITALIZED  INTEREST.

(2)  CASH FLOW FROM OPERATIONS PLUS CURRENT INCOME TAXES AND INTEREST  EXPENSE;
     DIVIDED BY THE SUM OF INTEREST EXPENSE AND CAPITALIZED INTEREST.


   72                                         CANADIAN NATURAL RESOURCES LIMITED
================================================================================

<PAGE>


CONFERENCE CALL

A conference call will be held at 9:00 a.m.  Mountain Time,  11:00 a.m. Eastern
Time on Thursday,  February 28, 2008. The North American conference call number
is  1-866-540-8136  and the outside North  American  conference  call number is
001-416-340-8010.  Please call in about 10 minutes  before the starting time in
order to be patched into the call. The  conference  call will also be broadcast
live on the internet and may be accessed  through the Canadian  Natural website
at www.cnrl.com.

A taped rebroadcast will be available until 6:00 p.m. Mountain Time,  Thursday,
March 6, 2008. To access the postview in North  America,  dial  1-800-408-3053.
Those outside of North America, dial  001-416-695-5800.  The passcode to use is
3243753.

WEBCAST

This call is being  webcast by Vcall and can be accessed on Canadian  Natural's
website at WWW.CNRL.COM/INVESTOR_INFO/CALENDAR.HTML.

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.

2008 FIRST QUARTER  RESULTS

2008 first  quarter  results are  scheduled  for release  after market close on
Thursday, May 8, 2008. A conference call will be held on Friday, May 9, 2008 at
9:00 a.m. Mountain Time, 11:00 a.m. Eastern Time.




For further information, please contact:


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

                                                                ALLAN P. MARKIN
                                                                       Chairman

                                                               JOHN G. LANGILLE
   TELEPHONE:         (403) 514-7777                              Vice-Chairman
   FACSIMILE:         (403) 514-7888
   EMAIL:              IR@CNRL.COM                                STEVE W. LAUT
                       ------------                                 President &
   WEBSITE:            WWW.CNRL.COM                     Chief Operating Officer
                       ------------

   TRADING SYMBOL - CNQ                                        DOUGLAS A. PROLL
   Toronto Stock Exchange                             Chief Financial Officer &
   New York Stock Exchange                       Senior Vice-President, Finance

                                                                COREY B. BIEBER
                                                                Vice-President,
                                                   Finance & Investor Relations

  CANADIAN NATURAL RESOURCES LIMITED                                         73
================================================================================

<PAGE>

[GRAPHIC OMITTED]

Canadian Natural
- -------------------------------------------------------------------------------
News Release       |       Discipline   |      Opportunity   |    Strategy
- -------------------------------------------------------------------------------


                       CANADIAN NATURAL RESOURCES LIMITED
                               ANNOUNCES DIVIDEND
          CALGARY, ALBERTA - FEBRUARY 28, 2008 - FOR IMMEDIATE RELEASE


Canadian  Natural  Resources  Limited  announces  its  Board of  Directors  has
declared a quarterly  cash  dividend on its common shares of C$0.10 (ten cents)
per common share. The dividend will be payable April 1, 2008 to shareholders of
record at the close of business on March 14, 2008.

Canadian  Natural is a senior oil and  natural  gas  production  company,  with
continuing  operations  in its core areas located in Western  Canada,  the U.K.
portion of the North Sea and Offshore West Africa.


                       CANADIAN NATURAL RESOURCES LIMITED
                          2500, 855 - 2nd Street S.W.
                                Calgary, Alberta
                                    T2P 4J8
<TABLE>
<S>                           <C>                         <C>
TELEPHONE:  (403) 514-7777        ALLAN P. MARKIN               DOUGLAS A. PROLL
FACSIMILE:  (403) 514-7888           Chairman               Chief Financial Officer and
EMAIL:      IR@CNRL.COM                                   Senior Vice-President, Finance
WEBSITE:    www.cnrl.com         JOHN G. LANGILLE
                                   Vice-Chairman                 COREY B. BIEBER
TRADING SYMBOL - CNQ                                              Vice-President,
Toronto Stock Exchange             STEVE W. LAUT          Finance and Investor Relations
New York Stock Exchange            President and
                              Chief Operating Officer
</TABLE>


Certain  information  regarding  the Company  contained  herein may  constitute
forward-looking  statements under  applicable  securities laws. Such statements
are subject to known or unknown risks and  uncertainties  that may cause actual
results  to  differ  materially  from  those  anticipated  or  implied  in  the
forward-looking statements.

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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