Douglas Proll - Executive Vice President Steve Laut - President and Non-Independent Director Corey Bieber - Chief Financial Officer Tim McKay - Chief Operating Officer

Neil Mehta - Goldman Sachs Phil Gresh - JPMorgan Benny Wong - Morgan Stanley Greg Pardy - RBC Capital Markets John Herrlin - Society General Americas Securities LLC

Good morning, ladies and gentlemen, and welcome to the Canadian Natural Resources Q3 2015 Conference Call. After the presentation, we will conduct a question-and-answer session. Instructions will be given at that time. Please note that this call is being recorded today, Thursday, November 5, 2015 at 9 o'clock a.m. Mountain Time. I would now like to turn the meeting over to your host for today's call, Doug Proll, Executive Vice President of Canadian Natural Resources. Please go ahead, Mr. Proll.

Thank you, operator. Good morning and thank you for joining our third quarter 2015 conference call. Today, we will discuss the company's financial and operating results, including providing you with an update on the progress of the Horizon expansion. We will also discuss our thoughts on guidance for 2016. With me this morning are Steve Laut, our President; Tim McKay, Chief Operating Officer; Lyle Stevens, Executive Vice President - Canadian Operations; and Corey Bieber, Chief Financial Officer. Before we begin, I would like to refer you to the comments regarding forward-looking information contained in our press release, and also note that all amounts are in Canadian dollars, and production and reserves are expressed as before royalties unless otherwise stated. I would like to make a few comments before turning the call over to Steve and Corey. In response to volatile and sharply lower commodity prices, we continue our focus on reducing our cost structures both operating and capital, while maintaining safety and environmental standards and ensuring that our nimble in allocating capital. This strategy has resulted in significant savings to-date, which is apparent in our nine months results. At Canadian Natural, we have a proven, effective, value-driven strategy. We delivered strong cash flow from operations of CAD4.4 billion or CAD4.03 per share for the first nine months of 2015. We continue to execute on our capital programs within our available cash flow. Horizon 2B Phase 2B is targeted to be substantially complete in Q3 2016 with the time as equipment which is will occur concurrent with the major turnaround. We focus on safe, effective, efficient, and environmentally-responsible operations resulting in reliable operating performance across our diverse asset base providing strong cost control management. Canadian Natural is committed to new technology, development and sustainable environmentally-responsible operations. You can know more about our sustainable operations in our 2014 Stewardship Report to stakeholders available on our website. We have a large, well-balanced portfolio of assets with significant exposure to light and heavy crude oil, as well as significant natural gas upside, while continuing the transformation to long-life, low-decline assets. Our balance is strong, we maintain strong lines resources and we have maintained our current quarterly dividend payment. And we're increasing sustainable cash flow from our operations. Thank you. And I will now turn the call over to Steve.

Good morning, everyone. As you can see from the quarter, Canadian Natural remains in a strong position. As we progress 2015, it’s apparent that the resilience of our strong, diverse and well balanced asset base robustness of our business model in the effectiveness our strategies combined for our ability to execute these strategies has allowed to adopt and navigate this low commodity price environment. Canadian Natural is one of the few companies in our peer groups where underlying base business is delivering sufficient cash flow in this commodity price environment. Cash flow we are using to partially fund the rise and expansion the cornerstone of our transition to our long life low decline asset base. Canadian Natural has built to withstand low commodity prices. In 2015, Canadian Natural remains committed to lowering the cost structure in a methodical and structured manner. We are committed to completing Horizon Phase 2/3 on schedule and on budget. We’re also committed to maintain the optionality of our balanced and diverse asset base ensuring we can act quickly to change. Most importantly, we are committed to maintaining balance sheet strength, creating value and delivering returns to shareholders. In the third quarter, we delivered 848,000 BOEs a day, our production up 6% over Q3 2014. Canadian Natural’s operations continued to be effective and efficient, as we further enhance our effectiveness in Q3 through better efficiency and innovation. Operating costs were down from Q3 2014 to Q3 2015. 15% of Pelican Lake, 19% of Canadian light oil, 21% in primary heavy oil, 27% of Horizon and 8% in North American natural gas. And because of the cyclical nature of Primrose production, it’s not meaningful to compare quarter-to-quarter. That being said, annual thermal operating costs are targeted to be down 16% in 2015. As a result, we’ll be toward low end of our operating cost guidance for 2015 with the exception of Horizon. Once again we’re lowering our operating cost guidance by CAD1 a barrel to CAD29 to CAD32 a barrel for the year. This is the third consecutive quarter we are lowered our Horizon operating cost guidance in 2015, reflecting our ability to enhance reliability, the effectiveness and efficiency at our Horizon operations. Horizon 2015 operating costs are full CAD9 a barrel lower than our 2014 average operating costs. In a low commodity price environment, CAD9 a barrel makes a significant difference to robustness of our operations. At midpoint of production guidance CAD9 a barrel translates into over CAD418 million of additional operating cash flow. For the overall company, we have done a very good job of reducing operating costs, taking out CAD945 million of cost in 2015 compared to cost in 2014 on a per unit basis. We also make good strips in the capital side of the business with joined cost coming down 25% to 35% versus 2014 and our E&P facility cost coming down 20% to 30%. Lowering the overall cost structure is one of the key commitments in 2015 and we made good progress. Balance sheet strength is another commitment. Canadian Natural’s balance sheet remains strong and we maintain significant capital flexibility effectively allocating capital and keeping our transition to our longer life low decline based asset base intact. In 2015, we have exercised our capital flexibility differing CAD2.4 billion of capital spending in January. And over the course of the year, we have to cost savings and capital optimization, reduce the capital program and another CAD690. And in the third quarter, we’ve seen another CAD65 million reduction. These cost reduction reflect additional cost savings for our program, a result of our ability to optimize our execution, enhance productivity, right scope projects, leverage technology, as well lower energy and material costs. As a result, on a combined basis including deferrals, we’ve taken out CAD3.2 billion from original 2015 budget. The 2015 capital budget is now at CAD5.4 billion, CAD2.1 billion is allocated to execution of Horizon based 2/3 expansion, the major component of our transition to our longer life low decline asset base. Capital spending that delivers no additional production in 2015. And from our production perspective, oil and gas production will grow 9% in 2015. Importantly, using strip pricing of CAD50 WTI and AECO pricing at CAD2.63 for 2015 at the midpoint of production guidance, Canadian Natural generates CAD5.9 billion in cash flow. Dividends are CAD1 billion, and with the current capital program of CAD5.4 billion, we'll utilize CAD500 million on our balance sheet to fund the CAD2.15 billion of capital allocated to Horizon Phase 2/3 expansion. Our balance sheet remains strong and is projected to end of the year at 37.7% debt-to-book and debt-to-EBITDA at 2.7. We're also committed to monetizing Canadian Natural's royalty assets, assets that generate CAD160 million on an annualized Q2 basis of which CAD100 million is third party royalties. With Q2 volumes at 8,157 BOE/d of which 6.979 BEO/d are from third party royalties. We target this monetization in 2015. However, we're flexible on timing to ensure we maximize value for shareholders. This provides Canadian Natural with additional balance sheet flexibility. Canadian Natural is built for the low commodity price cycle. Our focus on effectiveness, efficiency and innovation is well underway, and we expect to carry this focus into 2016 as we continue to strengthen our capacity to deliver value throughout the commodity price cycles. We have finalized the 2016 budget. The goals for 2016 will be the same as they were in 2015 that is we’ll continue our focus on lowering cost structures on all levels. We are committed completion of Horizon Phase 2B in Q4 2016 with some components of the expansions coming on in May after the May turnaround in 2016 and we’ll make significant progress on Phase 3 with Phase 3 complete in Q4 2017. We’re also committed to maintain the optionality where balanced in diverse asset base ensuring we can act quickly to change. Most importantly, we are committed to maintaining balance sheet strength, creating value and delivering returns to shareholders. We targeted 2016 capital program to be roughly CAD4.5 to CAD5 billion and our production will be in the 840,000 to 850.000 BOE/d range, which will be 65% oil and 35% gas. In 2016, capital allocated Horizon expansion will be CAD2.1 billion and in 2017 it will drop significantly to CAD1.2 billion. We target Horizon Phase 2B completion in Q4 2016 and will take Horizon production up to 170,000 to 175,000 barrels a day with average Q4 production targeted in the 150,000 to 160,000 barrels a day range. Phase 3 is targeted for completion Q4 2017 and will Horizon production to 250,000 barrel of light, sweet 34 API crude for 50 years with no declines. Operating costs are expected to be significantly lower at Phase 2B and Phase 3 well below CAD25 a barrel. We are confident our ability to deliver operating cost at these levels especially considering Q3 operating costs were CAD27 a barrel. As Horizon product ramps up in 2016, product cap expenditures dropped dramatically in 2017 and they go to zero in 2018. Combined with dropping operating costs and increased production, Canadian Natural’s cash flow ramps up substantially and become significantly more sustainable allowing for greater flexibility in the allocation of cash flow. In 2017, we will have significantly more capacity allocate cash flow and we will maintain a balance in our cash flow allocation between the following priorities, debt repayment which will be a higher priority initially, returns to shareholders through dividends and share buyback, opportunistic acquisitions if they make sense and add value and resource development. Canadian Natural is clearly in a very strong position. Touching on each of the assets and starting with natural gas in North America. Natural gas production in North America was 1.5 million Bcf a day, down 3% due to additional unplanned and longer duration of expected pipeline maintenance which drove constraints and takeaway capacity. Gas production was restricted by 105 million cubic feet a day for Q3. Asset and takeaway constraints, gas production would have been up 3% Q3 over Q3 2014. 2015 gas drilling program is at 17 wells versus 76 in 2014 and production growth for 2015 will be 13%. Production in light oil and NGL assets in Canada continue to perform to expectation. Our 2015 drilling program is down to 4 wells from 101 wells in 2014. As expected, quarter-over-quarter production is down 6%. In our international light oil operations, we have stopped all drilling in the high-tax North Sea basin. In March 2015, the U.K. governments recognize that the increase government take too far. And in effort to restart the activity and create jobs, they reduce the supplementary charge on oil and gas profits from 32% to 20% effective January 1st, 2015. In addition, the legislation reduced the PRT rate from 50% to 35% effective January, 2016. We also replaced the existing Brownfield Allowance program with a new investment allowance effectively for first 2015 which should be more administratively effective. These changes are welcome and we apply the UK government for recognizing the rate of government take was too high, driving away capital investment, resulting in loss on jobs and actually reducing overall government revenues. In Offshore Africa, our Espoir and Baobab drilling programs are underway and we’re achieving execution efficiencies and excellent results. At Espoir, the first five wells are on production at 5,300 barrels a day net well above expectations with cost tracking below control estimates. Drilling and completion operations are very effective and the ten well program will be complete in 2016 on schedule. The production target from this program is 5,900 barrels a day net. At Baobab, the first two wells are on-stream with the third well coming on in the fourth quarter. Current incremental production is at 6,300 barrels a day net exceeded our expectations. Drilling and completion operations are also going very well at Baobab and we expect to complete the six-gross-well program in early 2016 on schedule. The program is targeted at 11,000 BOE/d net. We drilled 107 wells in our primary heavy oil assets in the first two quarters of 2015 versus the 591 wells we drilled in the first two quarter of 2014. We target drilling 179 wells in 2015 versus 896 wells in 2014. In addition, we've shut in roughly 5,700 barrels a day of heavy oil production from heavy oil wells that are high cost. Overall primary heavy oil operating costs are down 21% in 2015. As expecting unit production is started to be of 11% in 2015 versus 2014. Heavy oil is one of our most flexible capital and can easily dialed back and ramp back up again if we choose. At Pelican Lake, Q2 production was 50,852 barrels a day, with industry leading operating costs at CAD6.64 a barrel in Q2, down 15% quarter-over-quarter, generating significant cash flow even at these lower commodity prices. Pelican Lake annual production will increase by 3% a very strong result considering no wells will be drilled in 2015. The polymer flood in Pelican Lake is a clear example of how Canadian Natural leverages technology to unlock reserves, enhance production and lower operating costs to bring on long-life, low-decline production. Pelican Lake is an important part of our transition to long-life, low-decline asset base and will add significant and sustainable production in the near-term, mid-term, and long term. Our thermal in situ assets are also important part of our transition to long-life, low-decline asset base. And thermal production is largely influenced by the cyclic nature of Primrose's operations. In Q3, we're in a higher part of the production cycle with production at 132,183 barrels a day. The Primrose East Area 1 steamflood is performing as expected with current production at 12,000 barrels a day, on track to our expected 15,000 barrels a day plateau, confirming the validity of steamflooding in Primrose East Area 1. Kirby South production is currently at 36,000 barrels a day and ramping up with excellent thermal efficiencies. The SOR is at 2.5 for wells in SAGD mode, this is at top-tier thermal efficiency for SAGD operations. Q4 thermal production guidance is between 134,000 and 144,000 barrels a day will all costs down 16% in 2015. Turning to Horizon, the cornerstone of our transition to long-life, low-decline assets. As you recall, we have very proactive and focused on enhancing our industry leading reliability at Horizon in 2015. We move the turnaround originally planned for the fall this year into 2016 as we’re well ahead of schedule phase to the expansion, allowing us bring on Horizon expansion ahead of schedule creating synergies with the turnaround when moved into the spring of 2016. We also further operate the schedule by moving the outage remain to address work required before the spring 2016 turnaround into June from the fall this year, allowing us to further cash opportunities to optimize the fractioning new tower. All good news which reflects the even increasing strength and capacity of our operations and maintenance teams at Horizon. Q3 production was strong as expected at 131,779 barrels a day with unitization at the high end of our range at 96% and just above top end of our guidance. Q4 production in started between 123,000 and 129,000 barrels a day and yearly production guidance for Horizon remains unchanged at a 121,000 to 131,000 barrels a day. We target utilization rates in the 92% to 96% range. And it's best to look at utilization over long periods of time. And for the first nine months of 2015, Horizon utilization rates have been 94.7%, exceeding Canadian Natural's industry-leading utilization rates of 89% in 2014 and 87% in 2013. We are doing well, we saw room to improve and our expectation is that we will continue to improve even though we are running at utilization rates that are top in class compared to other fully integrated peers in Fort McMurray. As Phase 2B and 3 come on-stream, we’ll gain additional equipment redundancy and operational flexibility only has to further enhance reliability. Horizon operating costs in Q3 were excellent, coming in at CAD27 a barrel, down 7.5% from the CAD29.25 a barrel in Q2 and down 27% or CAD10 a barrel from the CAD37.13 a barrel achieved in Q3 of 2014. As a result of our continued focus on effective and efficient operations as well as highlighting the significant impact higher volumes have on operating cost. This all bodes well for the anticipated reduction in operating costs we target with Horizon Phase 2/3 expansion. As I said earlier, operating cost guidance for Horizon has been reduced for the third consecutive quarter of 2015, down CAD1 a barrel to CAD29 to CAD32 a barrel, roughly 23% less than 2014. This is a cost savings of CAD418 million in the year compared to 2014 unit rate costs. The overall Horizon Phase 2/3 expansion is going very well with overall progress at 74% with Phase 2B at 72% and Phase 3 at 67%. The completion of Horizon is getting very close. And with completion the most significant portion of our transition to a long life, low decline asset base will be complete. Horizon Phase 2B will have 45,000 barrels a day, a portion of it which will come out early after the May turnaround in 2016 with full volumes targeted to be complete and ramping up production in Q4 2016. At this point, we are targeting Q4 2016 production in the 150,000 to 160,000 barrel day range to 216 exit rates in a 170,000 barrel day range. Out on the heels of Phase 2B production will be Phase 3 which adds 80,000 barrels a day in Q4 2017 taking us to over 250,000 barrels of light, sweet 34-degree API well for 50 years with no declines. Operating cost will be significantly lower than industry leading cost we are achieving today and expansion capital across will go to zero. As a result, we have significantly higher and more reliable production volumes, lower operating costs and seems to be higher and more sustainable cash flow. Canadian Natural has a strong, diversified and balanced asset base that contains significant upside. In 2015, we'll progressing the development of that upside with focus on Horizon and Côte d'Ivoire. We are, however, preserving our resource base that contains significant upside, which, as prices stabilize, we'll be able to develop in a disciplined, cost-effective manner when we choose. Our thermal assets have fast resource to develop in a cost-effective manner. Pelican Lake has significant polymer flood to develop, as well we have a very large primary heavy oil location inventory, significant liquids-rich gas sands with over 1 million acres in the Montney and very large positions in the liquids-rich Deep Basin, plus nearly 500,000 acres in the Duvernay. Significant diversified upside that our strategy allows us to maintain and develop in a cost-effective manner on a schedule that optimizes value for Canadian Natural's shareholders. Looking forward again to 2016, our goals for 2016 will be the same as they were in 2015. We will continue to focus on lowering the cost structure on all levels. We’re completed to completion of the 45,000 barrels a day at Horizon Phase 2B in Q4 2016 allow a portion to Phase 2B will be reliable after the May turnaround. And make significant progress on the 80,000 barrels a day Phase 3 complete in Q4 2017. We’re also committed to maintaining the optionality of our balanced and diverse asset base ensuring we can act quickly to change. Most importantly, we’re committed to maintaining balance sheet strength, creating value and delivering returns to shareholder. We target 2016 capital program to be roughly CAD4.5 to CAD5 million, our production is started to between 840,000 to 850,000 BOEs a day to 65% oil, 35% gas and exit rates are targeted in 2016 in the 880,000 to 900,000 barrels a day BOD range. Impressive considering CAD2.1 has allocated to Horizon. Our last major capital year for Horizon and reflect the strength of our underlining asset base. Canadian Natural is built to low commodity price cycles, we have been here many time before and each and every time, we come out the cycle stronger than went into the cycle. As you can see, this cycle is shaping up to be no different. With that I’ll turn it over to Corey to discuss our strong financial position, a key Canadian Natural strength.

Thank you, Steve, and good morning, everyone. The company has performed very well in the context of the drop in WTI prices from CAD100 in 2014 to about CAD51 for the year-to-date 2015. For the nine months ended December 30th, cash flow from operations are 4.4 billion covered all about 300 million of our capital expenditures and dividends paid and that included over 1.6 billion of capital cost related to construction of Horizon Phase 2/3 expansions. This demonstrates Canadian Natural, as effectively and appropriately respond for the new commodity price paradigm. We clearly defined our priorities for 2015 and have remained set fast. Since our initial 2015 capital budged of CAD8.6 billion was released one year ago, we have proactively reduced capital guidance five times, the latest being today’s CAD65 million reduction. The total capital guidance reduction accumulates to CAD3.165 billion or 37% of the original budge. With respect to operation cost, to reiterate one of these points, we have seen significant drops across the board. An estimate of these savings versus the prior year accumulates to approximately CAD945 million through the first nine months of 2015. At the same time, production levels for the first nine months are about 11% higher than for the same period in 2014, reflecting the impact of improvements in Pelican Lake, thermal, Horizon and international coupled with a disciplined drilling program in 2014 acquisitions. Liquidity stands drawn at CAD3.4 billion at September 30th, more than ample to deliver near term requirements. Beyond this and given our maintenance and strong investment grade ratings, I believe we are very good access to the debt capital markets. Based upon current strip pricing, foreign exchange rates and midpoint production guidance, we would currently anticipate ending 2015 at about 38% debt-to-capitalization or debt-to-EBITDA of about 2.7 times. These estimates include no value from any potential disposition of royalty interest. This is well within any covenants and quire reasonable given the current stage of the pricing cycle. Based upon the directional information provided for 2016 and given estimated required Horizon completion cost for 2017, the defined plan is very achievable from a financial perspective. Our results in 2015 demonstrated, we have a technical capability and management discipline to react and remain successful at a volatile commodity cycle. Complete with the flexibility to both scale back if required our capture opportunities should they arise. As such, I believe that our defined growth plan which largely transition us to a longer life, lower decline production mix remains intact despite commodity price is 50% lower than a year ago. Thank you and back to you Steve.

That concludes our call and we’re open for questions. Operator?

Thank you. [Operator Instructions] Your first question comes from the line of Neil Mehta with Goldman Sachs. Your line is open.

Good morning, team.

Good morning.

Good morning.

So I want to start off on the potential monetization of royalty assets and what are the gating factors in terms of timing there and in terms of whether it’s 2015 or 2016 event?

I think Neil, as you heard in the call we’ve been saying it all year. We’re out here to get full value, maximize value for royalty assets. Our target is to do in 2015. If we can do it in 2015, we will. If we can’t get the full value for the assets, we won’t. So we’re not going to drive by timing, we’re driven by maximizing value.

Yeah that makes sense. And then in terms of the capital spending level, thanks for providing some incremental color for 2916. With the roll off of some of that Horizon spending it’s again to ‘17, any directional thoughts in terms of the magnitude you could step down in ‘17 versus ‘16?

The capital spending in Horizon, you are talking about Neil?

Across the portfolio.

Across the portfolio, I will say the commodity prices are I think it’s too early process to expect what 2017 capital would be. But I think it’s safe to say that we require about CAD1 billion less capital expenditures on Horizon project expansion, so we’ll be to allocate that capital to our priorities that we talked about earlier, one was you know balance sheet strength, our return to shareholders, opportunistic acquisitions and resource development. We’ve done a pretty good job of balancing that off of the years and that will be the case in 2017 as well.

Okay. Last question for me is on the balance sheet, you mentioned 2.7 times debt-to-EBITDA, as you think about a target levels, there are number that you have in mind either on the debt-to-cap basis or debt-to-EBITDA basis?

Certainly our long term targets are in that 1.8 to 2.2 times on debt-to-EBITDA, we’re above that targeted range today given where the commodity cycle is over the long term we tend to drift back down towards that. Debt-to-book capital range is at 25% to 45%, so we’re well within the real house there.

Terrific. Thank you, guys, congrats.

Thanks.

And your next question comes from the line of Phil Gresh with JPMorgan. Your line is open.

Hi good morning.

Good morning.

My first question is just on the 2016 cash from operations guidance. If I think about the comparison to what you’ve done in the past two quarters about 1.5 billion a quarter implies something more like 6 billion run rate, I mean if I look at next year or you know the 1.5 billion a quarter compared to the implied quarterly run rate next year about 1.2, so it’s about CAD300 million decline, production supposed to be flattish, I know you had some hedges this year that probably had the roll off maybe have some impact, but if you could help us all of that more with how to think about that bridge on cash from operations from ‘15 to ‘16?

I think it’s all depends when you want to use to commodity price Phil, so if you look at the strip 24 which sort of be in that CAD5 billion range. Well that being said, our operating costs continue to come down. So we’ll give clear guidance as we finalize the 2016 budget.

Okay. So you are just using the strip, the current strip for ‘16?

Yeah, that’s right.

Okay. The second question is just on the incremental CapEx flexibility that you highlighted, how should we think about the flex capability in 2016 relative to this initial guidance if things remain lower or below the strip?

I think our flexibility is probably in that CAD500 to CAD1.5 billion range depends how severe prices come back, how much we pull back. We still have quite a bit of flexibility.

Okay, that’s helpful. And then on the capital allocation priorities, I believe you ramp ordered debt pay down number one, dividend number two and there is some language in the release about the dividend, so just to make sure I understand, you basically you are saying, you want to keep the dividend flattish through the ramp of the capital spending on Horizon after which you kind of reassess that or how should I interrupt that, a little bit color would be helpful?

I would interrupt that way Phil, reality if you look at our dividend, we’ve increased dividends for 15 straight years, we’d like to keep that record point. So I think we’d say that we will increase dividends, we did last year as well. So it’s truly see that’s a decision will come to early in 2016, but our bias is to have a strong dividends going forward and as you can see our balance sheet is strong, our production is strong, our operating costs are coming down and we’re going to be coming on production from Phase 2B in Q4, full year of Q4 2016, some will come earlier. So we’ll have quite a bit more cash flow coming towards at the end of 2016.

Okay, that’s helpful. And then on the leverage target, do you have a view of where you’d like to be by the time Horizon ramps over the next two to three years in terms of the debt pay down priorities?

I think you heard Corey talk early, will stay within our guidelines as we have before.

Yeah, I think that’s fair Phil. You know a lot of it really depends on where commodity prices are and as we reiterated several times today, the strong balance sheet is the top priority because that gives us the flexibility to manage cycle. So we’ll use the balance sheet right now to bridge through to getting horizon complete but we will maintain a strong balance sheet through that period.

Okay. Last one would just be on growth projects moving forward as Horizon rolls off, but beyond just getting a better sense of the royalty rate environment, maybe you could just talk kind of more organically in terms of projects return growth files, what it would take to consider moving forward with one these in situ projects again you know under the assumption that you know the royalty use are more benign?

You know it’s really hard the question to answer, we don’t know the staffs royalty spill, so I am hesitated to answer that question. I will say you know we have a large asset base, it’s diverse. If you look in the gas side, we have a larger Montney asset, a lot of adds in BC, a big high quality portion of it’s in BC, so we probably go there first. We can do thermal projects, obviously we have large heavy oil inventory that can drill, some of that’s in Saskatchewan, we also have Pelican Lake that wish come back too. And thermal projects probably need a little bit more higher pricing and we have do before we done.

Okay, got it, that’s helpful. I’ll turn it over. Thank you.

Your next question comes from the line of Benny Wong from Morgan Stanley. Your line is open.

Yeah, thanks. I really appreciate the guide of the remaining spend in Horizon. Just wondering if there are any contingency budgeting in sales number?

Yeah, we do have contingency in there Benny. It’s probably about 6% at this point in time.

Great. And I just wondering if you can provide an update on what you are seeing in terms of acquisitions and tuck-in potential, you know there’s been a uptick of asset deal activity in Canada, just wondering if you could speak to that and offer your perspective of opportunities you may or may not seeing?

You know, there is need to some assets on the block, we don’t see whole big state title winning for properties. As you know we look at every property that comes through our quarter. We look at lot, we evaluate some and we bid on even less. So we’ll continue to do that, right now I don’t know if it’s going to be too active.

Got it, thanks. And just as a follow-up question, as looking it further down the road once Horizon 2/3 expansions are complete and we’re in the CAN60-CAN75 EBITDA that you guys are envisioning, how do we think about what’s an appropriate rate of growth going forward and is there a change in that if the Alberta royalty review was unfavorable and your asset direct capital outside of Alberta? And I’ll leave it with there, thanks.

It’s a good question Benny, I don’t know how to answer we don’t - it’s all kind bet royalty reviews going to be, but you know Canadian Natural is totally focused on value growth and economic growth and are going to produce sake. We have a diverse portfolio not only here in Alberta but DC, some in Saskatchewan, obviously in Cote d'Ivoire. So we have opportunities here that we can allocate capital in 2017 and 2018 that will create economic value and value growth.

You next question comes from the line of Greg Pardy with RBC Capital Markets. Your line is open.

Yeah, thanks, good morning. I just want to stay on the topic of Horizon but maybe just to talk about the math first because I think you’ve now rates your base that are 137,000 and then you’re going to add another 125, so that - I mean that would put you 10,000 through the 2015, but Steve, is 250 capacity in 2018 are fairly conservative number in your books?

Yeah, we’re hoping nobody did the math Greg, but yeah it’s probably conservative, it’s conservative, we think we can do more than 250. We got to see it on going for sure.

Okay. And then the second things I was - so I was going to ask you is well just about 28 capital spend, so given that then goes to zero, you’ve been reworking the - I knew was that 90,000 to 95,000 are flooring on the expansion, so what - I mean if you just do the math for me, what would that now kind of map toward in terms of a capital intensity. And am I thinking about this the right way or has this been really the removal of contingency that is knocking off the capital in ‘18?

No, I think we’re just progressing than expected and I would say we’ve been fairly effective in our execution strategies, so our cost are headed I would say toward a lower CAD90,000 and CAD95,000 of well.

Okay. Okay, great, thank you.

[Operator Instructions] And your next question comes from the line of John Herrlin with Society General. Your line is open.

Yeah, thanks. Steve getting back to the royalty issue, given the amount of stress that the industry is experiencing, do you think the Albertan government has a greater appreciation of that with respect to the ongoing discussion on royalties?

Yeah, I think they have John, I our discussions with the royalty panel and with royalty they understand the importance of the oil and gas industry at Alberta, they understand that there is a lot of job creation that goes with it, they understand how many jobs have been lost here in the downturn. So I think they have an understanding where we are, where the industry is right now and what that actually means to them in terms of royalties, income taxes, job creation, municipal taxes, lease rentals, as a whole life here a value creation that goes to the oil and gas industry is not just straight to royalty. So they are getting a better appreciation of that and I think they have a fairly good understanding of where we are today.

Great. Next one for me, on the E&C side, is it lot easier to procure things now or schedule things just given the slowdown?

Yeah, I think it is but let me go get Tim here Chief Operating Officer to give a comment on that.

Yeah, we’re seeing very good efficiencies, we’re seeing very good turnarounds on modules, equipments and any other services that throughout the industry.

Okay, thank you.

There are no further questions at this time. I will now turn the call back over to Mr. Doug Proll.

Thank you, operator. And thank you, ladies and gentlemen for attending our conference. As we discuss today, Canadian Natural has a focus plan implemented in 2015 that will carry through 2016 and 2017. The plan revolves around continued focus on lowering cost structures, completion of Horizon Phase 2B in ‘16 and Phase 3 in 2017, continued maintenance and of our company’s strong balance sheet, flexible lines of liquid resources, maintenance of our dividend program and preservation of the optionality of the company’s reserves and land base. The goal of this of course is a focus plan to continue to create value for our shareholders. If you have any further questions, please give us a call. Thank you again and we look forward to our fourth quarter and year-end conference call in early March, 2016.

Thank you, ladies and gentlemen for you participation. This concludes today’s conference call. You may now disconnect.