EX-99.3 4 a06302024q2fs.htm EX-99.3
CANADIAN NATURAL RESOURCES LIMITED

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023
JULY 31, 2024

INTERIM CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS

As at | Note | Jun 30 2024 | Dec 31 2023
(millions of Canadian dollars, unaudited)
ASSETS |  |  |
Current assets |  |  |
Cash and cash equivalents |  | $ | 915 |  | $ | 877 |
Accounts receivable |  | 3,652 |  | 3,189 |
Inventory |  | 2,483 |  | 2,034 |
Prepaids and other |  | 301 |  | 471 |
Investments | 7 | — |  | 525 |
Current portion of other long-term assets | 8 | 79 |  | 71 |
|  | 7,430 |  | 7,167 |
Exploration and evaluation assets | 4 | 2,169 |  | 2,208 |
Property, plant and equipment | 5 | 64,336 |  | 64,581 |
Lease assets | 6 | 1,458 |  | 1,458 |
Other long-term assets | 8 | 551 |  | 541 |
|  | $ | 75,944 |  | $ | 75,955 |
LIABILITIES |  |  |
Current liabilities |  |  |
Accounts payable |  | $ | 1,852 |  | $ | 1,418 |
Accrued liabilities |  | 4,165 |  | 3,534 |
Current income taxes payable |  | 58 |  | — |
Current portion of long-term debt | 9 | 820 |  | 980 |
Current portion of other long-term liabilities | 10 | 1,549 |  | 1,503 |
|  | 8,444 |  | 7,435 |
Long-term debt | 9 | 9,329 |  | 9,819 |
Other long-term liabilities | 10 | 8,505 |  | 8,686 |
Deferred income taxes |  | 10,197 |  | 10,183 |
|  | 36,475 |  | 36,123 |
SHAREHOLDERS' EQUITY |  |  |
Share capital | 12 | 11,080 |  | 10,712 |
Retained earnings |  | 28,167 |  | 28,948 |
Accumulated other comprehensive income | 13 | 222 |  | 172 |
|  | 39,469 |  | 39,832 |
|  | $ | 75,944 |  | $ | 75,955 |

Commitments and contingencies (note 17)
Approved by the Board of Directors on July 31, 2024.

Canadian Natural Resources Limited | 1 | Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF EARNINGS

(millions of Canadian dollars, except per common share amounts, unaudited) |  | Three Months Ended |  | Six Months Ended
Note | Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Product sales | 18 | $ | 10,622 |  | $ | 8,846 |  |  | $ | 20,044 |  | $ | 18,394 |
Less: royalties |  | (1,571) |  | (956) |  |  | (2,749) |  | (1,874) |
Revenue |  | 9,051 |  | 7,890 |  |  | 17,295 |  | 16,520 |
Expenses |  |  |  |  |  |
Production |  | 1,979 |  | 2,211 |  |  | 4,136 |  | 4,375 |
Transportation, blending and feedstock |  | 2,655 |  | 2,330 |  |  | 4,939 |  | 4,664 |
Depletion, depreciation and amortization | 4,5,6 | 1,649 |  | 1,397 |  |  | 3,182 |  | 2,815 |
Administration |  | 124 |  | 119 |  |  | 250 |  | 225 |
Share-based compensation | 10 | (13) |  | 70 |  |  | 281 |  | 136 |
Asset retirement obligation accretion | 10 | 97 |  | 91 |  |  | 194 |  | 183 |
Interest and other financing expense |  | 158 |  | 178 |  |  | 296 |  | 332 |
Risk management loss (gain) | 16 | 18 |  | (31) |  |  | 56 |  | (10) |
Foreign exchange loss (gain) |  | 103 |  | (202) |  |  | 353 |  | (216) |
Loss (gain) from investments | 7 | 25 |  | (45) |  |  | (56) |  | (44) |
|  | 6,795 |  | 6,118 |  |  | 13,631 |  | 12,460 |
Earnings before taxes |  | 2,256 |  | 1,772 |  |  | 3,664 |  | 4,060 |
Current income tax expense | 11 | 520 |  | 313 |  |  | 921 |  | 772 |
Deferred income tax expense (recovery) | 11 | 21 |  | (4) |  |  | 41 |  | 26 |
Net earnings |  | $ | 1,715 |  | $ | 1,463 |  |  | $ | 2,702 |  | $ | 3,262 |
Net earnings per common share (1) |  |  |  |  |  |
Basic | 15 | $ | 0.80 |  | $ | 0.67 |  |  | $ | 1.26 |  | $ | 1.49 |
Diluted | 15 | $ | 0.80 |  | $ | 0.66 |  |  | $ | 1.25 |  | $ | 1.47 |

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).

Canadian Natural Resources Limited | 2 | Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

| Three Months Ended |  | Six Months Ended
(millions of Canadian dollars, unaudited) | Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Net earnings | $ | 1,715 |  | $ | 1,463 |  |  | $ | 2,702 |  | $ | 3,262 |
Items that may be reclassified subsequently to net earnings |  |  |  |  |
Net change in derivative financial instruments designated as cash flow hedges |  |  |  |  |
Unrealized income during the period, net of taxes of $nil (2023 – $nil) – three months ended; $nil (2023 – $nil) – six months ended | — |  | 1 |  |  | — |  | 1 |
Reclassification to net earnings, net of taxes of $nil (2023 – $nil) – three months ended; $nil (2023 – $nil) – six months ended | — |  | (1) |  |  | (1) |  | (2) |
| — |  | — |  |  | (1) |  | (1) |
Foreign currency translation adjustment |  |  |  |  |
Translation of net investment | 17 |  | (30) |  |  | 51 |  | (31) |
Other comprehensive income (loss), net of taxes | 17 |  | (30) |  |  | 50 |  | (32) |
Comprehensive income | $ | 1,732 |  | $ | 1,433 |  |  | $ | 2,752 |  | $ | 3,230 |

Canadian Natural Resources Limited | 3 | Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

|  | Six Months Ended
(millions of Canadian dollars, unaudited) | Note | Jun 30 2024 | Jun 30 2023
Share capital | 12 |  |
Balance – beginning of period |  | $ | 10,712 |  | $ | 10,294 |
Issued upon exercise of stock options |  | 227 |  | 190 |
Previously recognized liability on stock options exercised for common shares |  | 285 |  | 196 |
Purchase of common shares under Normal Course Issuer Bid |  | (144) |  | (146) |
Balance – end of period |  | 11,080 |  | 10,534 |
Retained earnings |  |  |
Balance – beginning of period |  | 28,948 |  | 27,672 |
Net earnings |  | 2,702 |  | 3,262 |
Dividends on common shares | 12 | (2,242) |  | (1,972) |
Purchase of common shares under Normal Course Issuer Bid, including tax | 12 | (1,241) |  | (1,029) |
Balance – end of period |  | 28,167 |  | 27,933 |
Accumulated other comprehensive income | 13 |  |
Balance – beginning of period |  | 172 |  | 209 |
Other comprehensive income (loss), net of taxes |  | 50 |  | (32) |
Balance – end of period |  | 222 |  | 177 |
Shareholders' equity |  | $ | 39,469 |  | $ | 38,644 |

Canadian Natural Resources Limited | 4 | Three and six months ended June 30, 2024

CONSOLIDATED STATEMENTS OF CASH FLOWS

|  | Three Months Ended |  | Six Months Ended
(millions of Canadian dollars, unaudited) | Note | Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Operating activities |  |  |  |  |  |
Net earnings |  | $ | 1,715 |  | $ | 1,463 |  |  | $ | 2,702 |  | $ | 3,262 |
Non-cash items |  |  |  |  |  |
Depletion, depreciation and amortization | 4,5,6 | 1,649 |  | 1,397 |  |  | 3,182 |  | 2,815 |
Share-based compensation |  | (13) |  | 70 |  |  | 281 |  | 136 |
Asset retirement obligation accretion |  | 97 |  | 91 |  |  | 194 |  | 183 |
Unrealized risk management (gain) loss |  | — |  | (4) |  |  | 13 |  | 16 |
Unrealized foreign exchange (gain) loss |  | (15) |  | (231) |  |  | 254 |  | (234) |
Loss (gain) from investments | 7 | 25 |  | (40) |  |  | (50) |  | (33) |
Deferred income tax expense (recovery) |  | 21 |  | (4) |  |  | 41 |  | 26 |
Realized foreign exchange loss on repayment of US dollar debt securities |  | 135 |  | — |  |  | 135 |  | — |
Abandonment expenditures | 10 | (129) |  | (100) |  |  | (291) |  | (237) |
Other |  | 84 |  | 86 |  |  | (9) |  | (3) |
Net change in non-cash working capital |  | 515 |  | 17 |  |  | 500 |  | (1,891) |
Cash flows from operating activities |  | 4,084 |  | 2,745 |  |  | 6,952 |  | 4,040 |
Financing activities |  |  |  |  |  |
Issue of bank credit facilities and commercial paper, net | 9 | — |  | 345 |  |  | — |  | 933 |
Repayment of medium-term notes | 9 | (320) |  | — |  |  | (320) |  | (11) |
Repayment of US dollar debt securities | 9 | (688) |  | — |  |  | (688) |  | — |
Payment of lease liabilities | 6 | (78) |  | (68) |  |  | (157) |  | (135) |
Issue of common shares on exercise of stock options | 12 | 52 |  | 47 |  |  | 227 |  | 190 |
Dividends on common shares |  | (1,125) |  | (989) |  |  | (2,201) |  | (1,927) |
Purchase of common shares under Normal Course Issuer Bid | 12 | (762) |  | (490) |  |  | (1,368) |  | (1,175) |
Cash flows used in financing activities |  | (2,921) |  | (1,155) |  |  | (4,507) |  | (2,125) |
Investing activities |  |  |  |  |  |
Net proceeds (expenditures) on exploration and evaluation assets | 4,18 | 4 |  | (7) |  |  | (65) |  | (35) |
Net expenditures on property, plant and equipment | 5,18 | (1,625) |  | (1,562) |  |  | (2,669) |  | (2,791) |
Net proceeds from investment | 7 | 575 |  | — |  |  | 575 |  | — |
Net change in non-cash working capital |  | 31 |  | 9 |  |  | (248) |  | 113 |
Cash flows used in investing activities |  | (1,015) |  | (1,560) |  |  | (2,407) |  | (2,713) |
Increase (decrease) in cash and cash equivalents | 148 |  | 30 |  |  | 38 |  | (798) |
Cash and cash equivalents – beginning of period | 767 |  | 92 |  |  | 877 |  | 920 |
Cash and cash equivalents – end of period |  | $ | 915 |  | $ | 122 |  |  | $ | 915 |  | $ | 122 |
Interest paid on long-term debt, net |  | $ | 126 |  | $ | 135 |  |  | $ | 307 |  | $ | 303 |
Income taxes paid, net |  | $ | 437 |  | $ | 651 |  |  | $ | 635 |  | $ | 2,207 |

Canadian Natural Resources Limited | 5 | Three and six months ended June 30, 2024

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(tabular amounts in millions of Canadian dollars, unless otherwise stated, unaudited)
1. ACCOUNTING POLICIES
Canadian Natural Resources Limited (the "Company") is a senior independent crude oil and natural gas exploration, development and production company. The Company's exploration and production operations are focused in North America, largely in Western Canada; the United Kingdom portion of the North Sea; and Côte d'Ivoire in Offshore Africa.
The Oil Sands Mining and Upgrading segment produces synthetic crude oil through bitumen mining and upgrading operations at Horizon Oil Sands ("Horizon") and through the Company's direct and indirect interest in the Athabasca Oil Sands Project ("AOSP").
Within Western Canada in the Midstream and Refining segment, the Company maintains certain activities that include pipeline operations, an electricity co-generation system and an investment in the North West Redwater Partnership ("NWRP"), a general partnership formed to upgrade and refine bitumen in the Province of Alberta.
The Company was incorporated in Alberta, Canada. The address of its registered office is 2100, 855 - 2 Street S.W., Calgary, Alberta, Canada.
These interim consolidated financial statements and the related notes have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"), applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34 "Interim Financial Reporting", following the same accounting policies as the audited consolidated financial statements of the Company as at December 31, 2023, except as disclosed in note 2. These interim consolidated financial statements contain disclosures that are supplemental to the Company's annual audited consolidated financial statements. Certain disclosures normally required to be included in the notes to the annual audited consolidated financial statements have been condensed. These interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2023.
Critical Accounting Estimates and Judgements
The Company has made estimates, assumptions, and judgements regarding certain assets, liabilities, revenues and expenses in the preparation of these interim consolidated financial statements, primarily related to unsettled transactions and events as of the date of these interim consolidated financial statements. Accordingly, actual results may differ from estimated amounts, and those differences may be material.
Common Share Split and Comparative Figures
At the Company's Annual and Special Meeting held on May 2, 2024, shareholders passed a Special Resolution approving a two for one common share split effective for shareholders of record as of market close on June 3, 2024. On June 10, 2024, shareholders of record received one additional share for every one common share held, with common shares trading on a split-adjusted basis beginning June 11, 2024. Common share, per common share, dividend, and stock option amounts for periods prior to the two for one common share split have been updated to reflect the common share split.
2. CHANGE IN ACCOUNTING POLICIES
In January 2020, the IASB issued amendments to IAS 1 "Presentation of Financial Statements" to clarify that liabilities are classified as either current or non-current, depending on the existence of the substantive right at the end of the reporting period for an entity to defer settlement of the liability for at least twelve months after the reporting period. In October 2022, the IASB issued further amendments to specify that the classification of debt as current or non-current at the reporting date is not affected by covenants to be complied with after the reporting date. The amendments were adopted on January 1, 2024 and had no impact on the Company's interim consolidated financial statements.

Canadian Natural Resources Limited | 6 | Three and six months ended June 30, 2024

3. ACCOUNTING STANDARDS ISSUED BUT NOT YET APPLIED
In April 2024, the IASB issued IFRS 18 "Presentation and Disclosure in Financial Statements", which provides presentation and disclosure requirements for the primary financial statements and related notes, replacing IAS 1 “Presentation of Financial Statements". IFRS 18 introduces defined categories for income and expenses and requires disclosure of new defined subtotals, including operating profit. The new standard also requires additional notes for management performance measures and disclosure of certain expenses by nature. There are some associated changes to the statement of cash flows, including the starting point for the calculation of cash flows from operating activities and the categorization of interest and dividends. IFRS 18 is effective January 1, 2027, with early adoption permitted. The new standard is required to be adopted retrospectively. The Company is assessing the impact of IFRS 18 on the Company’s consolidated financial statements.
In May 2024, the IASB issued amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" to clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled using an electronic payment system. The amendments also clarify the requirements for assessing whether a financial asset meets the solely payments of principal and interest criterion, and adds disclosure requirements for financial instruments with certain contingent features and for equity investments designated at fair value through other comprehensive income. The amendments are effective January 1, 2026, with early adoption permitted. The amendments are required to be adopted retrospectively by adjusting the opening balance of financial assets, financial liabilities and retained earnings at the date of adoption. The Company is assessing the impact of the amendments on the Company’s consolidated financial statements.
4. EXPLORATION AND EVALUATION ASSETS

| Exploration and Production | Oil Sands Mining and Upgrading | Total |  |  |  |  |  |  |  |
| North America | North Sea | Offshore Africa |  |  |  |  |  |  |  |  |  |
Cost |  |  |  |  |  |  |  |  |  |  |  |  |
At December 31, 2023 | $ | 2,031 |  | $ | — |  | $ | 100 |  | $ | 77 |  | $ | 2,208 |  |  |  |  |  |  |  |  |
Additions, net | 68 |  | — |  | (3) |  | — |  | 65 |  |  |  |  |  |  |  |  |
Transfers to property, plant and equipment | (42) |  | — |  | — |  | — |  | (42) |  |  |  |  |  |  |  |  |
Derecognitions and other (1) | — |  | — |  | (62) |  | — |  | (62) |  |  |  |  |  |  |  |  |
At June 30, 2024 | $ | 2,057 |  | $ | — |  | $ | 35 |  | $ | 77 |  | $ | 2,169 |  |  |  |  |  |  |  |  |

(1)In connection with the Company’s notice of withdrawal from Block 11B/12B in South Africa in the second quarter of 2024, the Company derecognized $62 million of exploration and evaluation assets through depletion, depreciation and amortization expense.

Canadian Natural Resources Limited | 7 | Three and six months ended June 30, 2024

5. PROPERTY, PLANT AND EQUIPMENT

| Exploration and Production | Oil Sands Mining and Upgrading | Midstream and Refining | Head Office | Total
| North America | North Sea | Offshore Africa |  |  |  |
Cost |  |  |  |  |  |  |
At December 31, 2023 | $ | 83,483 |  | $ | 8,606 |  | $ | 4,409 |  | $ | 49,375 |  | $ | 484 |  | $ | 566 |  | $ | 146,923 |
Additions | 1,445 |  | 7 |  | 81 |  | 1,117 |  | 7 |  | 20 |  | 2,677 |
Transfers from exploration & evaluation assets | 42 |  | — |  | — |  | — |  | — |  | — |  | 42 |
Derecognitions (1) | (309) |  | — |  | — |  | (341) |  | — |  | — |  | (650) |
Foreign exchange adjustments and other | — |  | 315 |  | 162 |  | — |  | — |  | — |  | 477 |
At June 30, 2024 | $ | 84,661 |  | $ | 8,928 |  | $ | 4,652 |  | $ | 50,151 |  | $ | 491 |  | $ | 586 |  | $ | 149,469 |
Accumulated depletion and depreciation |  |  |  |  |
At December 31, 2023 | $ | 58,840 |  | $ | 8,382 |  | $ | 3,358 |  | $ | 11,105 |  | $ | 213 |  | $ | 444 |  | $ | 82,342 |
Expense | 1,852 |  | 29 |  | 71 |  | 992 |  | 8 |  | 13 |  | 2,965 |
Derecognitions (1) | (309) |  | — |  | — |  | (341) |  | — |  | — |  | (650) |
Foreign exchange adjustments and other | — |  | 307 |  | 158 |  | 11 |  | — |  | — |  | 476 |
At June 30, 2024 | $ | 60,383 |  | $ | 8,718 |  | $ | 3,587 |  | $ | 11,767 |  | $ | 221 |  | $ | 457 |  | $ | 85,133 |
Net book value |  |  |  |  |  |  |
At June 30, 2024 | $ | 24,278 |  | $ | 210 |  | $ | 1,065 |  | $ | 38,384 |  | $ | 270 |  | $ | 129 |  | $ | 64,336 |
At December 31, 2023 | $ | 24,643 |  | $ | 224 |  | $ | 1,051 |  | $ | 38,270 |  | $ | 271 |  | $ | 122 |  | $ | 64,581 |

(1)An asset is derecognized when no future economic benefits are expected to arise from its continued use or disposal.
6. LEASES
Lease assets

| Product transportation and storage | Field equipment and power | Offshore vessels and equipment | Office leases and other | Total
At December 31, 2023 | $ | 840 |  | $ | 482 |  | $ | 71 |  | $ | 65 |  | $ | 1,458 |
Additions | 5 |  | 62 |  | 31 |  | 53 |  | 151 |
Depreciation | (49) |  | (71) |  | (25) |  | (10) |  | (155) |
Foreign exchange adjustments and other | 2 |  | 2 |  | 2 |  | (2) |  | 4 |
At June 30, 2024 | $ | 798 |  | $ | 475 |  | $ | 79 |  | $ | 106 |  | $ | 1,458 |

Lease liabilities
The Company measures its lease liabilities at the discounted value of its lease payments during the lease term. Lease liabilities as at June 30, 2024 were as follows:

| Jun 30 2024 | Dec 31 2023
Lease liabilities | $ | 1,548 |  | $ | 1,555 |
Less: current portion | 276 |  | 298 |
| $ | 1,272 |  | $ | 1,257 |

Canadian Natural Resources Limited | 8 | Three and six months ended June 30, 2024

Total cash outflows for leases for the three months ended June 30, 2024, including payments related to short-term leases not reported as lease assets, were $319 million (three months ended June 30, 2023 – $341 million; six months ended June 30, 2024 – $655 million; six months ended June 30, 2023 – $678 million). Interest expense on leases for the three months ended June 30, 2024 was $18 million (three months ended June 30, 2023 – $16 million; six months ended June 30, 2024 – $35 million; six months ended June 30, 2023 – $32 million).
7. INVESTMENTS

| Jun 30 2024 | Dec 31 2023
Investment in PrairieSky Royalty Ltd. | $ | — |  | $ | 525 |

The loss (gain) from investment was comprised as follows:

| Three Months Ended |  | Six Months Ended
| Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Loss (gain) from investment | $ | 25 |  | $ | (40) |  |  | $ | (50) |  | $ | (33) |
Dividend income | — |  | (5) |  |  | (6) |  | (11) |
| $ | 25 |  | $ | (45) |  |  | $ | (56) |  | $ | (44) |

During the second quarter of 2024, the Company sold its 22.6 million common share investment in PrairieSky Royalty Ltd. for $25.65 per common share with net proceeds, after fees and expenses, of $575 million.
8. OTHER LONG-TERM ASSETS

| Jun 30 2024 | Dec 31 2023 |  |  |  |
Long-term prepayments, contracts and other (1) | $ | 315 |  | $ | 279 |  |  |  |  |
Prepaid cost of service tolls | 166 |  | 179 |  |  |  |  |
Long-term inventory | 142 |  | 141 |  |  |  |  |
Risk management (note 16) | 7 |  | 13 |  |  |  |  |
| 630 |  | 612 |  |  |  |  |
Less: current portion | 79 |  | 71 |  |  |  |  |
| $ | 551 |  | $ | 541 |  |  |  |  |

(1)Includes physical product sales contracts, accrued interest on the deferred PRT recovery, and the unamortized portion of the Company's share bonus program.
The Company has a 50% equity investment in NWRP. NWRP operates a 50,000 barrels per day bitumen upgrader and refinery that processes approximately 12,500 barrels per day of bitumen feedstock for the Company (25% toll payer) and 37,500 barrels per day of bitumen feedstock for the Alberta Petroleum Marketing Commission ("APMC") (75% toll payer), an agent of the Government of Alberta. The Company is unconditionally obligated to pay its 25% pro rata share of the debt component of the monthly fee-for-service toll over the 40-year tolling period until 2058 (note 17). Sales of diesel and refined products and associated refining tolls are recognized in the Midstream and Refining segment (note 18).
During the second quarter of 2024, NWRP issued $700 million of 4.85% series P bonds due June 1, 2034 and $600 million of 5.08% series Q bonds due June 1, 2054. Additionally, NWRP extended its revolving credit facility originally maturing June 2025 to June 2027, and reduced the capacity from $2,175 million to $1,900 million. NWRP also repaid $440 million on its non-revolving credit facility maturing June 2025, reducing the amount outstanding to $500 million.
The carrying value of the Company's interest in NWRP is $nil, and as at June 30, 2024, the cumulative unrecognized share of the equity loss and partnership distributions from NWRP was $516 million (December 31, 2023 – $555 million). For the three months ended June 30, 2024, the Company's recovery of its share of unrecognized equity losses was $35 million (six months ended June 30, 2024 – recovery of unrecognized equity losses of $39 million; three months ended June 30, 2023 – unrecognized equity loss of $1 million; six months ended June 30, 2023 – unrecognized equity loss of $17 million).

Canadian Natural Resources Limited | 9 | Three and six months ended June 30, 2024

9. LONG-TERM DEBT

| Jun 30 2024 | Dec 31 2023
Canadian dollar denominated debt, unsecured |  |
Medium-term notes | $ | 966 |  | $ | 1,286 |
US dollar denominated debt, unsecured |  |
US dollar debt securities (June 30, 2024 – US$6,750 million; December 31, 2023 – US$7,250 million) | 9,238 |  | 9,573 |
Long-term debt before transaction costs and original issue discounts, net | 10,204 |  | 10,859 |
Less: original issue discounts, net (1) | 10 |  | 11 |
transaction costs (1) (2) | 45 |  | 49 |
| 10,149 |  | 10,799 |
Less: current portion of long-term debt (1) (2) | 820 |  | 980 |
| $ | 9,329 |  | $ | 9,819 |

(1)The Company has included unamortized original issue discounts and premiums, and directly attributable transaction costs in the carrying amount of the outstanding debt.
(2)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.
Bank Credit Facilities and Commercial Paper
As at June 30, 2024, the Company had undrawn revolving bank credit facilities of $5,450 million. Details of these facilities are described below. The Company also has certain other dedicated credit facilities supporting letters of credit.
▪a $100 million demand credit facility;
▪a $500 million revolving credit facility, maturing February 2025;
▪a $2,425 million revolving syndicated credit facility, maturing June 2025; and
▪a $2,425 million revolving syndicated credit facility, maturing June 2027.
Borrowings under the Company's revolving credit facilities may be made by way of pricing referenced to CORRA, SOFR, US base rate or Canadian prime rate.
The Company's borrowings under its US commercial paper program are authorized up to a maximum of US$2,500 million.
The Company's weighted average interest rate on total long-term debt outstanding for the six months ended June 30, 2024 was 4.9% (June 30, 2023 – 4.7%).
As at June 30, 2024, letters of credit and guarantees aggregating to $703 million were outstanding (December 31, 2023 – $446 million).
Medium-Term Notes
During the second quarter of 2024, the Company repaid $320 million of 3.55% medium-term notes.
In July 2023, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to $3,000 million of medium-term notes in Canada, which expires in August 2025. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance.
US Dollar Debt Securities
During the second quarter of 2024, the Company repaid US$500 million of 3.80% US dollar debt securities.
In July 2023, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to US$3,000 million of debt securities in the United States, which expires in August 2025. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance.

Canadian Natural Resources Limited | 10 | Three and six months ended June 30, 2024

10. OTHER LONG-TERM LIABILITIES

| Jun 30 2024 | Dec 31 2023
Asset retirement obligations | $ | 7,658 |  | $ | 7,690 |
Lease liabilities (note 6) | 1,548 |  | 1,555 |
Share-based compensation | 698 |  | 780 |
Transportation and processing contracts | 69 |  | 87 |
Risk management (note 16) | 9 |  | 4 |
Other | 72 |  | 73 |
| 10,054 |  | 10,189 |
Less: current portion | 1,549 |  | 1,503 |
| $ | 8,505 |  | $ | 8,686 |

Asset Retirement Obligations
The Company's asset retirement obligations are expected to be settled on an ongoing basis over a period of approximately 60 years and discounted using a weighted average discount rate of 5.2% (December 31, 2023 – 5.2%) and inflation rates of up to 2% (December 31, 2023 – up to 2%). Reconciliations of the discounted asset retirement obligations were as follows:

| Jun 30 2024 | Dec 31 2023
Balance – beginning of period | $ | 7,690 |  | $ | 6,908 |
Liabilities incurred | 12 |  | 25 |
Liabilities disposed, net | (4) |  | — |
Liabilities settled | (291) |  | (509) |
Asset retirement obligation accretion | 194 |  | 366 |
Revision of cost, inflation and timing estimates (1) | — |  | 621 |
Change in discount rates | — |  | 314 |
Foreign exchange adjustments | 57 |  | (35) |
Balance – end of period | 7,658 |  | 7,690 |
Less: current portion | 702 |  | 634 |
| $ | 6,956 |  | $ | 7,056 |

(1)Includes normal course revisions of cost, inflation and timing estimates, as well as revisions related to cost estimate increases in 2023 on future abandonment of the Ninian field assets in the North Sea.
Share-Based Compensation
The liability for share-based compensation includes costs incurred under the Company's Stock Option Plan and Performance Share Unit ("PSU") plans. The Company's Stock Option Plan provides current employees with the right to elect to receive common shares or a cash payment in exchange for stock options surrendered. The PSU plan provides certain executive employees of the Company with the right to receive a cash payment, the amount of which is determined with reference to the value of the Company's shares, and by individual employee performance and the extent to which certain other performance measures are met.

Canadian Natural Resources Limited | 11 | Three and six months ended June 30, 2024

The Company recognizes a liability for potential cash settlements under these plans. The current portion of the liability represents the maximum amount of the liability payable within the next twelve month period if all vested stock options and PSUs are settled in cash.

| Jun 30 2024 | Dec 31 2023
Balance – beginning of period | $ | 780 |  | $ | 832 |
Share-based compensation expense | 281 |  | 491 |
Cash payment for stock options surrendered and PSUs vested | (81) |  | (110) |
Transferred to common shares | (285) |  | (435) |
Other | 3 |  | 2 |
Balance – end of period | 698 |  | 780 |
Less: current portion | 539 |  | 538 |
| $ | 159 |  | $ | 242 |

11. INCOME TAXES
The provision for income tax was as follows:

| Three Months Ended |  | Six Months Ended
Expense (recovery) | Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Current corporate income tax – North America (1) | $ | 548 |  | $ | 299 |  |  | $ | 960 |  | $ | 779 |
Current corporate income tax – North Sea | (13) |  | (4) |  |  | (18) |  | 2 |
Current corporate income tax – Offshore Africa | 5 |  | 20 |  |  | 10 |  | 30 |
Current PRT (2) – North Sea | (6) |  | (5) |  |  | (20) |  | (45) |
Other taxes | (14) |  | 3 |  |  | (11) |  | 6 |
Current income tax | 520 |  | 313 |  |  | 921 |  | 772 |
Deferred corporate income tax | 14 |  | (15) |  |  | 28 |  | 8 |
Deferred PRT (2) – North Sea | 7 |  | 11 |  |  | 13 |  | 18 |
Deferred income tax | 21 |  | (4) |  |  | 41 |  | 26 |
Income tax | $ | 541 |  | $ | 309 |  |  | $ | 962 |  | $ | 798 |

(1)Includes North America Exploration and Production, Oil Sands Mining and Upgrading, and Midstream and Refining segments.
(2)Petroleum Revenue Tax.
12. SHARE CAPITAL
Authorized
Preferred shares issuable in a series.
Unlimited number of common shares without par value.

| Six Months Ended Jun 30, 2024
Issued Common Shares(1) | Number of shares (thousands) | Amount
Balance – beginning of period | 2,144,815 |  | $ | 10,712 |
Issued upon exercise of stock options | 10,924 |  | 227 |
Previously recognized liability on stock options exercised for common shares | — |  | 285 |
Purchase of common shares under Normal Course Issuer Bid | (28,100) |  | (144) |
Balance – end of period | 2,127,639 |  | $ | 11,080 |

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).

Canadian Natural Resources Limited | 12 | Three and six months ended June 30, 2024

Dividends(1)
The Company has paid regular quarterly dividends in each year since 2001. The dividend policy undergoes periodic review by the Board of Directors and is subject to change.
On February 28, 2024, the Board of Directors approved a 5% increase in the quarterly dividend to $0.525 per common share, beginning with the dividend paid on April 5, 2024.
On November 1, 2023, the Board of Directors approved an 11% increase in the quarterly dividend to $0.50 per common share. On March 1, 2023, the Board of Directors approved a 6% increase in the quarterly dividend to $0.45 per common share.
Normal Course Issuer Bid(1)
On March 8, 2024, the Company's application was approved for a Normal Course Issuer Bid to purchase through the facilities of the Toronto Stock Exchange ("TSX"), alternative Canadian trading platforms, and the New York Stock Exchange, up to 180,462,858 common shares, representing 10% of the public float, over a 12-month period commencing March 13, 2024 and ending March 12, 2025.
For the six months ended June 30, 2024, the Company purchased 28,100,000 common shares at a weighted average price of $48.68 per common share for a total cost, including tax, of $1,385 million. Retained earnings were reduced by $1,241 million, representing the excess of the purchase price of common shares over their average carrying value. Subsequent to June 30, 2024, up to and including July 30, 2024, the Company purchased 5,500,000 common shares at a weighted average price of $48.80 per common share for a total cost, including tax, of $273 million.
Share-Based Compensation – Stock Options(1)
The following table summarizes information relating to stock options outstanding as at June 30, 2024:

| Six Months Ended Jun 30, 2024
| Stock options (thousands) | Weighted average exercise price
Outstanding – beginning of period | 52,410 |  | $ | 26.80 |
Granted | 14,241 |  | $ | 44.59 |
Exercised for common shares | (10,924) |  | $ | 20.75 |
Surrendered for cash settlement | (294) |  | $ | 22.16 |
Forfeited | (2,582) |  | $ | 28.27 |
Outstanding – end of period | 52,851 |  | $ | 32.80 |
Exercisable – end of period | 7,539 |  | $ | 23.85 |

The Stock Option Plan is a "rolling 7%" plan, whereby the aggregate number of common shares that may be reserved for issuance under the plan shall not exceed 7% of the common shares outstanding from time to time.
13. ACCUMULATED OTHER COMPREHENSIVE INCOME
The components of accumulated other comprehensive income, net of taxes, were as follows:

| Jun 30 2024 | Jun 30 2023
Derivative financial instruments designated as cash flow hedges | $ | 71 |  | $ | 74 |
Foreign currency translation adjustment | 151 |  | 103 |
| $ | 222 |  | $ | 177 |

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).

Canadian Natural Resources Limited | 13 | Three and six months ended June 30, 2024

14. CAPITAL DISCLOSURES
The Company has defined its capital to mean its long-term debt and consolidated shareholders' equity, as determined at each reporting date.
The Company's objectives when managing its capital structure are to maintain financial flexibility and balance to enable the Company to access capital markets to sustain its on-going operations and growth strategies. The Company primarily monitors capital on the basis of an internally derived financial measure referred to as its "debt to book capitalization ratio", which is the ratio of current and long-term debt less cash and cash equivalents divided by the sum of the carrying value of shareholders' equity plus current and long-term debt less cash and cash equivalents. The Company's internal targeted range for its debt to book capitalization ratio is 25% to 45%. The ratio may fall below or exceed the targeted range depending on the execution of the Company's capital program, commodity price and foreign currency volatility, and the timing of acquisitions. As at June 30, 2024, the ratio was below the target range at 19.0%.
Readers are cautioned that the debt to book capitalization ratio is not defined by IFRS and this financial measure may not be comparable to similar measures presented by other companies. Further, there are no assurances that the Company will continue to use this measure to monitor capital or will not alter the method of calculation of this measure in the future.

| Jun 30 2024 | Dec 31 2023
Long-term debt | $ | 10,149 |  | $ | 10,799 |
Less: cash and cash equivalents | 915 |  | 877 |
Long-term debt, net | $ | 9,234 |  | $ | 9,922 |
Total shareholders' equity | $ | 39,469 |  | $ | 39,832 |
Debt to book capitalization | 19.0% | 19.9%

The Company is subject to a financial covenant that requires debt to book capitalization as defined in its credit facility agreements to not exceed 65%. As at June 30, 2024, the Company was in compliance with this covenant.
15. NET EARNINGS PER COMMON SHARE(1)

|  | Three Months Ended |  | Six Months Ended
|  | Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Weighted average common shares outstanding – basic (thousands of shares) | 2,133,374 |  | 2,190,136 |  |  | 2,137,730 |  | 2,195,501 |
Effect of dilutive stock options (thousands of shares) | 16,089 |  | 21,028 |  |  | 16,647 |  | 22,076 |
Weighted average common shares outstanding – diluted (thousands of shares) | 2,149,463 |  | 2,211,164 |  |  | 2,154,377 |  | 2,217,577 |
Net earnings | $ | 1,715 |  | $ | 1,463 |  |  | $ | 2,702 |  | $ | 3,262 |
Net earnings per common share | – basic | $ | 0.80 |  | $ | 0.67 |  |  | $ | 1.26 |  | $ | 1.49 |
| – diluted | $ | 0.80 |  | $ | 0.66 |  |  | $ | 1.25 |  | $ | 1.47 |

(1)Common share, per common share, dividend, and stock option amounts have been updated to reflect the two for one common share split (note 1).

Canadian Natural Resources Limited | 14 | Three and six months ended June 30, 2024

16. FINANCIAL INSTRUMENTS
The Company's financial instruments are comprised of cash and cash equivalents, accounts receivable, investments, risk management assets and liabilities, accounts payable, accrued liabilities, lease liabilities, and long-term debt. These financial instruments, with the exception of investments and risk management assets and liabilities, are classified as financial assets and liabilities at amortized cost. Investments are classified as financial assets at fair value through profit or loss. Risk management assets and liabilities are classified as derivatives held for trading or as cash flow hedges.
The estimated fair values of derivative financial instruments in Level 2 at each measurement date have been determined based on appropriate internal valuation methodologies and/or third party indications, including quoted forward prices for commodities, foreign exchange rates, interest yield curves and other volatility factors.
The changes in estimated fair values of derivative financial instruments included in the risk management asset (liability) were recognized in the financial statements as follows:

Asset (liability) | Jun 30 2024 | Dec 31 2023 |  |  |
Balance – beginning of period | $ | 9 |  | $ | 6 |  |  |  |
Net change in fair value of outstanding derivative financial instruments recognized in: |  |  |  |  |
Risk management activities (1) (2) | (11) |  | 3 |  |  |  |
Foreign exchange | — |  | — |  |  |  |
Balance – end of period | (2) |  | 9 |  |  |  |
Less: current portion | (4) |  | 8 |  |  |  |
| $ | 2 |  | $ | 1 |  |  |  |

(1)Risk management assets and liabilities are disclosed in note 8 and note 10, respectively.
(2)In the fourth quarter of 2023, the Company entered into 50,000 MMBtu/d of US$1.82 AECO fixed price financial contracts for the period of January to December 2024.
Net loss (gain) from risk management activities was as follows:

| Three Months Ended |  | Six Months Ended
| Jun 30 2024 | Jun 30 2023 |  | Jun 30 2024 | Jun 30 2023
Net realized risk management loss (gain) | $ | 18 |  | $ | (27) |  |  | $ | 43 |  | $ | (26) |
Net unrealized risk management (gain) loss | — |  | (4) |  |  | 13 |  | 16 |
| $ | 18 |  | $ | (31) |  |  | $ | 56 |  | $ | (10) |

The carrying amounts of the Company's financial instruments approximated their fair value, except for fixed rate long-term debt. The Company's financial instruments are categorized as Level 1 with the exception of risk management assets and liabilities, which are categorized as Level 2. There were no transfers between Level 1, 2, and 3 financial instruments. The fair values of the Company's fixed rate long-term debt is outlined below:

| Jun 30, 2024 |  |
| Carrying amount |  | Level 1 Fair Value |  |
Fixed rate long-term debt (1) (2) | $ | 10,149 |  |  | $ | 9,991 |  |  |

(1)The fair value of fixed rate long-term debt has been determined based on quoted market prices.
(2)Includes the current portion of fixed rate long-term debt.

Canadian Natural Resources Limited | 15 | Three and six months ended June 30, 2024

Financial Risk Factors
The Company's financial risks are consistent with those discussed in notes 1, 4 and 19 of the Company's audited consolidated financial statements for the year ended December 31, 2023.
a) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's market risk is comprised of commodity price risk, interest rate risk, and foreign currency exchange rate risk.
Commodity price risk management
The Company periodically uses commodity derivative financial instruments to manage its exposure to commodity price risk associated with the sale of its future crude oil and natural gas production and with natural gas purchases.
Interest rate risk management
The Company is exposed to interest rate price risk on its fixed rate long-term debt and to interest rate cash flow risk on its floating rate long-term debt. At June 30, 2024, the Company had no interest rate swap contracts outstanding.
Foreign currency exchange rate risk management
The Company is exposed to foreign currency exchange rate risk in Canada primarily related to its US dollar denominated long-term debt, commercial paper and working capital. The Company is also exposed to foreign currency exchange rate risk on transactions conducted in other currencies and in the carrying value of its foreign subsidiaries.
As at June 30, 2024, the Company had US$1,509 million of foreign currency forward contracts outstanding (December 31, 2023 – US$1,003 million), with original terms of up to 90 days, all of which were designated as derivatives held for trading.
b) Credit risk
Credit risk is the risk that a party to a financial instrument will cause a financial loss to the Company by failing to discharge an obligation.
Counterparty credit risk management
The Company's accounts receivable are mainly with customers in the crude oil and natural gas industry and are subject to normal industry credit risks. The Company manages these risks by reviewing its exposure to individual companies on a regular basis and, where appropriate, ensuring that parental guarantees or letters of credit are in place to minimize the impact in the event of default. As at June 30, 2024, substantially all of the Company's accounts receivable were due within normal trade terms.
The Company is also exposed to possible losses in the event of nonperformance by counterparties to derivative financial instruments; however, the Company manages this credit risk by entering into agreements with counterparties that are substantially all investment grade financial institutions. The carrying amount of financial assets approximates the maximum credit exposure.
c) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities.
Management of liquidity risk requires the Company to maintain sufficient cash and cash equivalents, along with other sources of capital, consisting primarily of cash flow from operating activities, available credit facilities, commercial paper and access to debt capital markets, to meet obligations as they become due. The Company believes it has adequate bank credit facilities to provide liquidity to manage fluctuations in the timing of the receipt and/or disbursement of operating cash flows.

Canadian Natural Resources Limited | 16 | Three and six months ended June 30, 2024

As at June 30, 2024, the maturity dates of the Company's financial liabilities were as follows:

| Less than 1 year | 1 to less than 2 years | 2 to less than 5 years | Thereafter
Accounts payable | $ | 1,852 |  | $ | — |  | $ | — |  | $ | — |
Accrued liabilities | $ | 4,165 |  | $ | — |  | $ | — |  | $ | — |
Long-term debt (1) | $ | 820 |  | $ | 821 |  | $ | 2,377 |  | $ | 6,186 |
Other long-term liabilities (2) | $ | 285 |  | $ | 209 |  | $ | 412 |  | $ | 651 |
Interest and other financing expense (3) | $ | 565 |  | $ | 509 |  | $ | 1,268 |  | $ | 3,310 |

(1)Long-term debt represents principal repayments only and does not reflect interest, original issue discounts and premiums or transaction costs.
(2)Lease payments included within other long-term liabilities reflect principal payments only and are as follows; less than one year, $276 million; one to less than two years, $209 million; two to less than five years, $412 million; and thereafter, $651 million.
(3)Includes interest and other financing expense on long-term debt and other long-term liabilities. Payments were estimated based upon applicable interest and foreign exchange rates as at June 30, 2024.
17. COMMITMENTS AND CONTINGENCIES
In the normal course of business, the Company has committed to certain payments. The following table summarizes the Company's commitments as at June 30, 2024:

| Remaining 2024 | 2025 | 2026 | 2027 | 2028 | Thereafter
Product transportation and processing (1) | $ | 890 |  | $ | 1,736 |  | $ | 1,585 |  | $ | 1,503 |  | $ | 1,386 |  | $ | 14,017 |
North West Redwater Partnership service toll (2) | $ | 74 |  | $ | 148 |  | $ | 130 |  | $ | 115 |  | $ | 119 |  | $ | 4,729 |
Offshore vessels and equipment | $ | 20 |  | $ | 35 |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Field equipment and power | $ | 27 |  | $ | 25 |  | $ | 23 |  | $ | 22 |  | $ | 22 |  | $ | 193 |
Other | $ | 75 |  | $ | 111 |  | $ | 111 |  | $ | 22 |  | $ | 23 |  | $ | 285 |

(1)The Company's commitment for the 20-year product transportation agreement on the Trans Mountain Expansion pipeline reflects interim tolls approved by the Canada Energy Regulator in the fourth quarter of 2023, and is subject to change pending the approval of final tolls.
(2)Pursuant to the processing agreements, the Company pays its 25% pro rata share of the debt component of the monthly fee-for-service toll. Included in the toll is $2,685 million of interest payable over the 40-year tolling period, ending in 2058 (note 8).
In addition to the commitments disclosed above, the Company has entered into various agreements related to the engineering, procurement and construction of its various development projects. These contracts can be cancelled by the Company upon notice without penalty, subject to the costs incurred up to and in respect of the cancellation.
The Company is defendant and plaintiff in a number of legal actions arising in the normal course of business. In addition, the Company is subject to certain contractor construction claims. 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.

Canadian Natural Resources Limited | 17 | Three and six months ended June 30, 2024

18. SEGMENTED INFORMATION

| North America | North Sea | Offshore Africa | Total Exploration and Production
| Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended
| Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30
(millions of Canadian dollars, unaudited) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023
Segmented product sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crude oil and NGLs | 5,269 |  | 4,040 |  | 9,553 |  | 7,789 |  | 133 |  | 194 |  | 272 |  | 194 |  | 82 |  | 171 |  | 164 |  | 263 |  | 5,484 |  | 4,405 |  | 9,989 |  | 8,246 |
Natural gas | 292 |  | 465 |  | 777 |  | 1,272 |  | 2 |  | 1 |  | 3 |  | 4 |  | 10 |  | 13 |  | 23 |  | 25 |  | 304 |  | 479 |  | 803 |  | 1,301 |
Other income and revenue (1) | (5) |  | (7) |  | (7) |  | 4 |  | — |  | — |  | 4 |  | — |  | 1 |  | 5 |  | 1 |  | 7 |  | (4) |  | (2) |  | (2) |  | 11 |
Total segmented product sales | 5,556 |  | 4,498 |  | 10,323 |  | 9,065 |  | 135 |  | 195 |  | 279 |  | 198 |  | 93 |  | 189 |  | 188 |  | 295 |  | 5,784 |  | 4,882 |  | 10,790 |  | 9,558 |
Less: royalties | (841) |  | (504) |  | (1,424) |  | (995) |  | (1) |  | (1) |  | (1) |  | (1) |  | (4) |  | (18) |  | (9) |  | (28) |  | (846) |  | (523) |  | (1,434) |  | (1,024) |
Segmented revenue | 4,715 |  | 3,994 |  | 8,899 |  | 8,070 |  | 134 |  | 194 |  | 278 |  | 197 |  | 89 |  | 171 |  | 179 |  | 267 |  | 4,938 |  | 4,359 |  | 9,356 |  | 8,534 |
Segmented expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Production | 804 |  | 918 |  | 1,713 |  | 1,920 |  | 112 |  | 149 |  | 218 |  | 152 |  | 19 |  | 37 |  | 40 |  | 64 |  | 935 |  | 1,104 |  | 1,971 |  | 2,136 |
Transportation, blending and feedstock | 1,707 |  | 1,408 |  | 3,266 |  | 2,954 |  | 5 |  | 5 |  | 6 |  | 5 |  | — |  | — |  | — |  | — |  | 1,712 |  | 1,413 |  | 3,272 |  | 2,959 |
Depletion, depreciation and amortization | 956 |  | 871 |  | 1,897 |  | 1,761 |  | 24 |  | 15 |  | 41 |  | 16 |  | 108 |  | 65 |  | 155 |  | 100 |  | 1,088 |  | 951 |  | 2,093 |  | 1,877 |
Asset retirement obligation accretion | 57 |  | 58 |  | 115 |  | 117 |  | 16 |  | 12 |  | 32 |  | 23 |  | 2 |  | 2 |  | 4 |  | 4 |  | 75 |  | 72 |  | 151 |  | 144 |
Risk management loss (gain) (commodity derivatives) | 3 |  | (3) |  | 6 |  | 17 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 3 |  | (3) |  | 6 |  | 17 |
Total segmented expenses | 3,527 |  | 3,252 |  | 6,997 |  | 6,769 |  | 157 |  | 181 |  | 297 |  | 196 |  | 129 |  | 104 |  | 199 |  | 168 |  | 3,813 |  | 3,537 |  | 7,493 |  | 7,133 |
Segmented earnings (loss) | 1,188 |  | 742 |  | 1,902 |  | 1,301 |  | (23) |  | 13 |  | (19) |  | 1 |  | (40) |  | 67 |  | (20) |  | 99 |  | 1,125 |  | 822 |  | 1,863 |  | 1,401 |
Non-segmented expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Administration |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Share-based compensation |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest and other financing expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk management loss (gain) (other) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange loss (gain) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss (gain) from investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total non-segmented expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Earnings before taxes |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current income tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Deferred income tax |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Net earnings |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

Canadian Natural Resources Limited | 18 | Three and six months ended June 30, 2024

| Oil Sands Mining and Upgrading | Midstream and Refining | Inter–segment elimination and other | Total
| Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended | Three Months Ended | Six Months Ended
| Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30 | Jun 30
(millions of Canadian dollars, unaudited) | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023
Segmented product sales |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Crude oil and NGLs (2) | 4,525 |  | 3,546 |  | 8,693 |  | 8,028 |  | 21 |  | 15 |  | 41 |  | 36 |  | 54 |  | 149 |  | 37 |  | 217 |  | 10,084 |  | 8,115 |  | 18,760 |  | 16,527 |
Natural gas | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 27 |  | 43 |  | 57 |  | 72 |  | 331 |  | 522 |  | 860 |  | 1,373 |
Other income and revenue (1) | (4) |  | 8 |  | (3) |  | 27 |  | 215 |  | 203 |  | 429 |  | 453 |  | — |  | — |  | — |  | 3 |  | 207 |  | 209 |  | 424 |  | 494 |
Total segmented product sales | 4,521 |  | 3,554 |  | 8,690 |  | 8,055 |  | 236 |  | 218 |  | 470 |  | 489 |  | 81 |  | 192 |  | 94 |  | 292 |  | 10,622 |  | 8,846 |  | 20,044 |  | 18,394 |
Less: royalties | (725) |  | (433) |  | (1,315) |  | (850) |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | (1,571) |  | (956) |  | (2,749) |  | (1,874) |
Segmented revenue | 3,796 |  | 3,121 |  | 7,375 |  | 7,205 |  | 236 |  | 218 |  | 470 |  | 489 |  | 81 |  | 192 |  | 94 |  | 292 |  | 9,051 |  | 7,890 |  | 17,295 |  | 16,520 |
Segmented expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Production | 941 |  | 997 |  | 1,967 |  | 2,039 |  | 88 |  | 91 |  | 167 |  | 169 |  | 15 |  | 19 |  | 31 |  | 31 |  | 1,979 |  | 2,211 |  | 4,136 |  | 4,375 |
Transportation, blending and feedstock (2) | 682 |  | 582 |  | 1,250 |  | 1,132 |  | 194 |  | 162 |  | 352 |  | 315 |  | 67 |  | 173 |  | 65 |  | 258 |  | 2,655 |  | 2,330 |  | 4,939 |  | 4,664 |
Depletion, depreciation and amortization | 557 |  | 442 |  | 1,081 |  | 930 |  | 4 |  | 4 |  | 8 |  | 8 |  | — |  | — |  | — |  | — |  | 1,649 |  | 1,397 |  | 3,182 |  | 2,815 |
Asset retirement obligation accretion | 22 |  | 19 |  | 43 |  | 39 |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 97 |  | 91 |  | 194 |  | 183 |
Risk management loss (gain) (commodity derivatives) | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | — |  | 3 |  | (3) |  | 6 |  | 17 |
Total segmented expenses | 2,202 |  | 2,040 |  | 4,341 |  | 4,140 |  | 286 |  | 257 |  | 527 |  | 492 |  | 82 |  | 192 |  | 96 |  | 289 |  | 6,383 |  | 6,026 |  | 12,457 |  | 12,054 |
Segmented earnings (loss) | 1,594 |  | 1,081 |  | 3,034 |  | 3,065 |  | (50) |  | (39) |  | (57) |  | (3) |  | (1) |  | — |  | (2) |  | 3 |  | 2,668 |  | 1,864 |  | 4,838 |  | 4,466 |
Non-segmented expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Administration |  |  |  |  |  |  |  |  |  |  |  |  | 124 |  | 119 |  | 250 |  | 225 |
Share-based compensation |  |  |  |  |  |  |  |  |  |  |  |  | (13) |  | 70 |  | 281 |  | 136 |
Interest and other financing expense |  |  |  |  |  |  |  |  |  |  |  |  | 158 |  | 178 |  | 296 |  | 332 |
Risk management loss (gain) (other) |  |  |  |  |  |  |  |  |  |  |  |  | 15 |  | (28) |  | 50 |  | (27) |
Foreign exchange loss (gain) |  |  |  |  |  |  |  |  |  |  |  |  | 103 |  | (202) |  | 353 |  | (216) |
Loss (gain) from investments |  |  |  |  |  |  |  |  |  |  |  |  | 25 |  | (45) |  | (56) |  | (44) |
Total non-segmented expenses |  |  |  |  |  |  |  |  |  |  |  |  | 412 |  | 92 |  | 1,174 |  | 406 |
Earnings before taxes |  |  |  |  |  |  |  |  |  |  |  |  | 2,256 |  | 1,772 |  | 3,664 |  | 4,060 |
Current income tax |  |  |  |  |  |  |  |  |  |  |  |  | 520 |  | 313 |  | 921 |  | 772 |
Deferred income tax |  |  |  |  |  |  |  |  |  |  |  |  | 21 |  | (4) |  | 41 |  | 26 |
Net earnings |  |  |  |  |  |  |  |  |  |  |  |  | 1,715 |  | 1,463 |  | 2,702 |  | 3,262 |

(1)Includes the sale of diesel and other refined products in the Midstream and Refining segment, and other income.
(2)Includes blending and feedstock costs associated with the processing of third party bitumen and other purchased feedstock in the Oil Sands Mining and Upgrading segment.

Canadian Natural Resources Limited | 19 | Three and six months ended June 30, 2024

Capital Expenditures(1)

| Six Months Ended |  |  |  |  |  |  |  |
| Jun 30, 2024 | Jun 30, 2023 |  |  |  |  |  |  |  |
| Net expenditures | Non-cash and fair value changes (2) | Capitalized costs | Net expenditures | Non-cash and fair value changes (2) | Capitalized costs |  |  |  |  |  |  |  |
Exploration and evaluation assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exploration and Production |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 68 |  | $ | (42) |  | $ | 26 |  | $ | 34 |  | $ | (26) |  | $ | 8 |  |  |  |  |  |  |  |  |
Offshore Africa | (3) |  | (62) |  | (65) |  | 1 |  | — |  | 1 |  |  |  |  |  |  |  |  |
| 65 |  | (104) |  | (39) |  | 35 |  | (26) |  | 9 |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |
Exploration and Production |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | 1,437 |  | (259) |  | 1,178 |  | 1,628 |  | (268) |  | 1,360 |  |  |  |  |  |  |  |  |
North Sea | 7 |  | — |  | 7 |  | 8 |  | — |  | 8 |  |  |  |  |  |  |  |  |
Offshore Africa | 81 |  | — |  | 81 |  | 79 |  | — |  | 79 |  |  |  |  |  |  |  |  |
| 1,525 |  | (259) |  | 1,266 |  | 1,715 |  | (268) |  | 1,447 |  |  |  |  |  |  |  |  |
Oil Sands Mining and Upgrading | 1,117 |  | (341) |  | 776 |  | 1,055 |  | (185) |  | 870 |  |  |  |  |  |  |  |  |
Midstream and Refining | 7 |  | — |  | 7 |  | 5 |  | — |  | 5 |  |  |  |  |  |  |  |  |
Head Office | 20 |  | — |  | 20 |  | 16 |  | — |  | 16 |  |  |  |  |  |  |  |  |
| 2,669 |  | (600) |  | 2,069 |  | 2,791 |  | (453) |  | 2,338 |  |  |  |  |  |  |  |  |
| $ | 2,734 |  | $ | (704) |  | $ | 2,030 |  | $ | 2,826 |  | $ | (479) |  | $ | 2,347 |  |  |  |  |  |  |  |  |

(1)This table provides a reconciliation of capitalized costs, reported in note 4 and note 5, to net expenditures reported in the investing activities section of the statements of cash flows. The reconciliation excludes the impact of foreign exchange adjustments.
(2)Derecognitions, asset retirement obligations, transfer of exploration and evaluation assets, and other fair value adjustments.
Segmented Assets

| Jun 30 2024 | Dec 31 2023
Exploration and Production |  |
North America | $ | 30,437 |  | $ | 30,058 |
North Sea | 476 |  | 602 |
Offshore Africa | 1,277 |  | 1,380 |
Other | 51 |  | 32 |
Oil Sands Mining and Upgrading | 42,561 |  | 42,865 |
Midstream and Refining | 929 |  | 856 |
Head Office | 213 |  | 162 |
| $ | 75,944 |  | $ | 75,955 |

Canadian Natural Resources Limited | 20 | Three and six months ended June 30, 2024

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 July 2023. 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 June 30, 2024: |
Interest coverage (times) |
Net earnings (1) | 17.3x
Adjusted funds flow (2) | 30.8x

(1)Net earnings plus income taxes and interest expense; divided by interest expense.
(2)Adjusted funds flow (as defined in the Company's Management's Discussion and Analysis), plus current income taxes and interest expense; divided by interest expense.

Canadian Natural Resources Limited | 21 | Three and six months ended June 30, 2024