Canadian Natural Resources will cut oil

CALGARY, Alberta, Nov. 27 (UPI) -- Canadian Natural Resources has cut its crude oil and natural gas budget by one-third.

The company now plans to spend no more than $1.7 billion for 2008, largely due to the increased royalties in Alberta on energy production.

"Of the reduction in capital spending, 78 percent or $645 million is due to a reduced drilling program in Alberta largely as a result of the impact of the royalty review changes," said a representative for CNR.

In October, Alberta Premier Ed Stelmach increased Alberta's oil and gas royalties by $1.4 billion, the Toronto Star reported.

"The new royalty regime introduced by the province of Alberta, effective for 2009, will take the vast majority of any increases in natural gas prices for most of our natural gas wells," said John Langille, vice chairman of Canadian Natural Resources. "As such, the ability to increase natural gas drilling activity with increasing gas prices is severely impacted."

Crude oil and NGLs production target is 316,000 to 366,000 barrels per day before royalties. Construction capital expenditures on the Horizon oil sands project are budgeted at $600 million and international conventional crude oil and natural gas capital expenditures was given $689 million in the budget.