Canadian Natural reports first-quarter profit beat and record oil and gas output

By Amanda Stephenson and Vallari Srivastava

May 8 (Reuters) - Canadian Natural Resources Ltd CNQ.TO, the country's largest oil producer, reported a better-than-expected first-quarter profit and record production on Thursday, helped by stronger Canadian heavy crude prices that persist in the wake of the opening of additional pipeline export capacity last year.

Producers in Canada have benefited this spring from a historically tight price discount on heavy oil versus U.S. benchmark crude, helping cushion the blow from a significant fall in global oil prices.

Canadian Natural President Scott Stauth told analysts on a conference call he expects the current Western Canada Select discount not to change significantly over the next few quarters.

"Our expectation would be that the differentials are in the range that they are, out and forward on," he said.

On Wednesday, WCS for June delivery in Hardisty, Alberta, settled at $8.75 a barrel under the U.S. West Texas Intermediate crude - its narrowest discount since 2020.

Canadian Natural earlier reported a first-quarter profit of C$2.4 billion that beat analysts' estimates.

The company's shares were last up 5.6% on the Toronto Stock Exchange.

Oil producers in Canada have gotten a lift from the start-up of the Trans Mountain pipeline expansion project, which has nearly tripled the flow of oil to the country's Pacific Coast from landlocked Alberta, raised Canadian crude prices and opened up market access to refineries in Asia and the U.S. West Coast.

Canadian oil has also benefited from U.S. sanctions on Venezuela and other countries, which are boosting demand for non-sanctioned heavy crude producers.

Canadian Natural's quarterly output rose to a record 1.58 million barrels of oil equivalent per day during the first quarter, from 1.33 million boepd during the same period a year earlier.

The company plans to lower its annual capital budget by C$100 million to C$6.05 billion, and said that would not impact its planned operating activities or targeted production levels for 2025.

Stauth said the lowered capital budget was not related to the lower WTI price environment, but instead due to ongoing efficiency and optimization projects at various sites that have helped the company cut costs.

He also said he hoped the negotiations between the federal government and the Pathways Alliance, a group of oil sands producers that have proposed a C$16 billion carbon capture and storage project, would be able to continue in the near future now the Canadian election is over and new Prime Minister Mark Carney is in place.

($1 = 1.3878 Canadian dollars)