Canadian Natural Resources (TSE:CNQ) Thursday posted a 19 per cent drop in second-quarter profits on lower oil and gas prices, and cut further spending on natural gas. "Targeted capital expenditures for 2012 are being re-allocated from natural gas to higher return primary heavy crude oil projects," the oil and natural gas company said in a statement, as it reduced its capital budget by about $680 million. Natural gas prices have fallen 46 per cent during April-June from last year while U.S. crude oil prices fell 9 per cent. The company expects to produce between 1,220 million cubic feet per day and 1,235 million cubic feet per day of natural gas, and between 454,000 barrels per day of and 474,000 bpd of crude oil in 2012, before royalties. For the second quarter, the company produced 679,607 barrels of oil equivalent per day (boe/d), up from 556,539 boe/d a year earlier. Net income fell to $753 million or 68 cents per share, from $929 million, or 84 cents a year earlier. Adjusted earnings from operations were 55 cents per share. Revenue rose 15 per cent to $3.83 billion. At the same time, cash flow for the quarter rose to $1.75 billion from $1.55 billion. The Calgary-based Canadian Natural also declared a quarterly cash dividend on its common shares of $0.105 per common hare. Canadian Natural Resources is one of Canada’s biggest oil and natural gas producers, with the bulk of its operations in Western Canada.

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