Canadian Natural Resources Announces 2008 Q1 Results

Natural gas production volumes for the first quarter represented 44% of the Company's total production. Natural gas production for Q1/08 averaged 1,538 mmcf/d, down 10% from 1,717 mmcf/d for Q1/07 and down 3% from 1,589 mmcf/d for Q4/07. As expected, volumes in Q1/08 reflected a strong winter drilling program offset by the natural decline in base production and continued reallocation of capital towards higher return projects in crude oil.

Total crude oil and NGLs production for Q1/08 was 327,217 bbl/d. Q1/08 production volumes were slightly higher than Q1/07 volumes of 327,001 bbl/d, and decreased 3% from Q4/07 volumes of 337,240 bbl/d. Volumes in Q1/08 reflect the transition between steam and production cycles for Primrose thermal wells and continued conversion of production wells to polymer injection wells at Pelican Lake.

Quarterly cash flow from operations was $1.73 billion, an increase of 6% from Q1/07 and an increase of 16% from Q4/07. The increase from Q1/07 and Q4/07 primarily reflected higher crude oil and natural gas realizations, partially offset by realized hedging losses.

Quarterly net earnings for Q1/08 were $727 million. Quarterly adjusted net earnings from operations for Q1/08 were $872 million.

Maintained a strong undeveloped conventional core land base in Canada of 11.8 million net acres - a key asset for continued value growth.

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 37,000 bbl/d during the first quarter of 2008, up significantly by 5,000 bbl/d from Q1/07 and up 1,000 bbl/d from Q4/07.

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 late 2008 and production in early 2009.

Secured a deep water drilling rig for the Baobab Field. The equipment was mobilized in early Q2/08, enabling work to begin on the restoration of shut-in production. It is targeted that a minimum 3 of the 5 Baobab wells come on stream over the course of 2008 and 2009.

The Olowi Project in Offshore Gabon continues on track. The drilling rig has been mobilized and arrived on site in late April. First crude oil production is targeted for Q4/08.

Work progress on the Horizon Oil Sands Project exited Q1/08 at 94% complete and first oil is targeted for Q3/08.

Commencing January 1, 2009, the Company's commodity hedging program has been revised by its Board of Directors to allow for the hedging of up to 50% (currently 75%) of the near 12 months budgeted production and up to 25% (currently 50%) of the following 13 to 24 months estimated production. The purchase of put options will continue to be in addition to the above parameters. The Company continues to believe that its risk management program meets its objective of securing funding for its capital projects.

Declared a quarterly cash dividend on common shares of C$0.10 per common share, payable July 1, 2008.

Commenting on first quarter 2008 results, Canadian Natural's Chairman, Allan Markin stated, "It has been a good start to the year for Canadian Natural. We completed our winter drilling program in advance of spring break-up, meeting our targets. Our teams were presented with several weeks of cold weather, leading to many weather related issues. The teams rose to the challenge and delivered impressive results. At the Horizon Project, severe weather conditions factored into lower productivity. As the weather became warmer, efficiencies improved and first oil remains targeted for the third quarter of this year."

John Langille, Vice-Chairman, stated, "First quarter cash flow was a reflection of higher realized crude oil pricing, resulting from a lower heavy crude oil differential. The heavy crude oil differential improved due to reduced refinery cracking margins that influence demand for heavy crude oil. Stronger natural gas pricing also added to the bottom line as a cold, late winter resulted in a draw on natural gas inventories. Natural gas pricing was also affected by fewer liquefied natural gas imports to North America and reduced production coming out of Canada. As a result of the increases in both crude oil and natural gas realized strip prices, our cash flow for the year is projected to be in balance with our capital program. Our balance sheet should continue to strengthen as we expect solid earnings throughout 2008."

Steve Laut, President and Chief Operating Officer of Canadian Natural commented, "During Q1/08, we saw the continued benefits of our high-graded natural gas drilling program with strong and steady production delivering on budget. Our North American crude oil drilling program also produced excellent results, particularly from our Pelican Lake assets. Looking ahead, work at the Primrose East Thermal Project continues on schedule, with production expected for early 2009, a further step towards unlocking the significant value of Canadian Natural's thermal crude oil resource base. Our International crude oil projects are also making significant strides with the Olowi Project in Offshore Gabon continuing on track for first oil targeted for late 2008, along with the mobilization of the deep water drilling rig for Baobab in Offshore Cote d'Ivoire. The Horizon Project remains targeted for a Q3/08 start up with operations readiness on schedule to date. The year of execution has started off extremely well."

North America

Q1/08 North American natural gas production decreased 11% from Q1/07 and decreased 3% from Q4/07, reflecting natural declines in base production and the Company's strategic decision to reduce spending on natural gas drilling. Despite the decrease in production, the Company had a highly successful winter drilling program with all planned wells drilled and all planned tie-ins completed prior to spring break-up.

Canadian Natural drilled 167 net targeted natural gas wells in Q1/08 with an active program across the Company's core regions. In Northeast British Columbia, 20 net wells were drilled, while in Northwest Alberta, 50 net wells were drilled. In the Northern Plains, 44 net wells were drilled, with 53 net wells drilled in the Southern Plains.

Planned drilling activity for Q2/08 includes 8 natural gas wells compared to drilling activity for Q2/07 of 6 natural gas wells.

Q1/08 North America crude oil and NGLs production increased 5% from Q1/07 and decreased 3% from Q4/07 levels. The majority of the incremental production volume from Q1/07 was contributed by thermal crude oil and Pelican Lake crude oil. The decrease from Q4/07 is a reflection of transitioning off the production cycle peaks at Primrose North pads.

The Company has decided to accelerate the drilling of additional Primrose North pads originally scheduled for 2009 requiring additional capital in 2008 of approximately $130 million; approximately 49 additional horizontal wells of the 120 well program will be drilled in 2008 with the remainder drilled in 2009. Steaming of these wells will commence in Q4/09.

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. Drilling and construction is on schedule, and production is targeted to commence in early 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.

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.

Development of new pads and secondary recovery conversion projects at Pelican Lake continued as expected throughout Q1/08. In Q1/08, the Company drilled 25 horizontal wells with plans to drill an additional 57 horizontal and 7 vertical service wells throughout the remainder of 2008. Pelican Lake production averaged approximately 37,000 bbl/d for Q1/08 compared to approximately 32,000 bbl/d for Q1/07 and approximately 36,000 bbl/d for the prior quarter. 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.

Conventional heavy crude oil production volumes decreased slightly in Q1/08 compared to Q4/07, reflecting expected declines in certain older fields and higher than forecast downtime due to cold weather.

During Q1/08, drilling activity targeted 176 net wells including 96 wells targeting heavy crude oil, 25 wells targeting Pelican Lake crude oil, 22 wells targeting thermal crude oil and 33 wells targeting light crude oil.

Planned drilling activity for Q2/08 includes 62 net crude oil wells, excluding stratigraphic test and service wells.

North Sea

During Q1/08, 1.6 net wells were drilled and completed with an additional 1.6 net wells drilling at quarter end. Crude oil production was down 6% in Q1/08 to 49,568 bbl/d from 52,709 bbl/d in Q4/07 as a result of the disposal of Canadian Natural's interests in the B-Block Fields in December 2007, higher than anticipated downtime on Banff and further decline in the Lyell subsea wells.

Focus on waterflood optimization at Ninian continued with 1 well being converted to water injection during Q1/08 and a further well scheduled to be converted to water injection in Q2/08 to increase water injection capacity. Compared to Q1/07, the Company has increased injection by 45%.

At Murchison, the first of 2 production wells planned for 2008 was completed during Q1/08. The second well is scheduled for completion in Q2/08.

Following disappointing injection performance from the subsea wells drilled at Columba E in 2007, the Company has successfully increased injection by 60% with the optimization of the current pumps to inject above fracture pressure. As a result, a positive production response is forecast for later in 2008.

Offshore West Africa

During Q1/08, 0.6 net crude oil wells were drilled and completed. This represented the final well in the West Espoir drilling campaign with the drilling rig being released during the quarter. The project was delivered on budget and on schedule.

Offshore West Africa's crude oil production was up 4% in Q1/08 to 28,689 bbl/d from 27,688 bbl/d in Q4/07 following the successful completion of drilling at West Espoir and stable production from Baobab.

Progress on the Facility Upgrade Project at Espoir to increase capacity of the Floating, Production, Storage and Offtake Vessel ("FPSO") is progressing ahead of schedule and is expected to now be complete in Q3/09, an acceleration of 3 to 6 months from the original estimate.

The deep water drilling rig for Baobab was mobilized early in Q2/08, enabling work to begin on the restoration of shut-in production. It is targeted that a minimum 3 of the 5 shut-in Baobab wells be on stream over the course of 2008 and 2009.

At the Olowi project in Offshore Gabon, a drilling rig was mobilized and drilling commenced in early May of this year with first crude oil production targeted for late 2008.

Horizon Project

Canadian Natural achieved an overall 94% completion at the end of Q1/08, with craftspeople actively performing hydrotests, airblows, rotation checks and various pre-commissioning activities. Operations teams are walking down the systems in each plant to ensure they are complete prior to commissioning. The last substation on site has been energized and the Extraction Plant started operating on water in late April.

Mine Production commenced operations in the first quarter, using Canadian Natural mine operators and equipment to work on the overburden removal. This is the second area of the Horizon Project where operations have begun, with water systems being the first. This represents a significant milestone for the Company with early operations providing training benefits for Canadian Natural operators prior to full start up.

Commissioning is progressing as 96 plant systems have been turned over and commissioned (out of an estimated 820); along with 10 mine haul trucks (out of 23) and 2 hydraulic shovels, all on schedule. The balance of the mine equipment will be turned over and commissioned to support the ramp up of oil sands mining and bitumen production.

At the end of the first quarter, capital spending on Phase 1 of the Horizon Project was at 111% of the original budget of $6.8 billion. Looking forward to completion, targeted for Q3/08, anticipated capital spending on Phase 1 construction will be within the previously announced range of 25%-28% above the original budget.

There has been progress in hiring of operators with 89% of required personnel in place, all maintenance contracts finalized and all supervision mobilized on site. The plants are prepared to start up and 190,000 barrels of diluent for start up have been delivered to the Horizon Project site.

Once commissioning has been completed and operations have begun, it is anticipated that ramp up to full production will occur over a 3 to 4 month period. The target is to be at 85% design capacity by year end 2008. Full capacity is anticipated to be achieved during Q1/09 as planned.

The sales pipeline which will transport production from the site to Edmonton is on track for completion in Q2/08. Approximately 750,000 barrels of synthetic crude oil from initial production volumes will be used to fill the pipeline.

While focus remains on completion and start up of Phase 1, Canadian Natural continues to plan for future expansions. Two coke drums have been received on site along with all components for the two hydrotreating reactors that will be installed as part of the Phase 2/3 expansion.