Canadian Natural Resources: Management’s Discussion and Analysis (09.30.2026 Q3 FS)

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

Commitments and contingencies (note 16)

Approved by the Board of Directors on November 4, 2026.

Three Months Ended Nine Months Ended

(1) Depletion, depreciation and amortization expense for the three and nine months ended September 30, 2025 includes $1,258 million for revisions to abandonment and decommissioning costs in the North Sea.

Three Months Ended Nine Months Ended

Nine Months Ended

Three Months Ended Nine Months Ended

(1) Realized foreign exchange on financing activities primarily relates to the repayment of US dollar denominated debt.

(tabular amounts in millions of Canadian dollars, unless otherwise stated, unaudited)

1. ACCOUNTING POLICIES

   Canadian Natural Resources Limited (the "Company") is a senior independent crude oil and natural gas exploration, development and production company. The Company's exploration and production operations are focused in North America, largely in Western Canada; the United Kingdom portion of the North Sea; and Côte d'Ivoire in Offshore Africa.

   The Oil Sands Mining and Upgrading segment produces synthetic crude oil through bitumen mining and upgrading operations at Horizon Oil Sands ("Horizon") and through the Company's interest in the Athabasca Oil Sands Project ("AOSP").

   Within Western Canada in the Midstream and Refining segment, the Company maintains certain activities that include pipeline operations, an electricity co-generation system and an investment in the North West Redwater Partnership ("NWRP"), a general partnership formed to upgrade and refine bitumen in the Province of Alberta.

   The Company was incorporated in Alberta, Canada. In June 2026, the Company relocated its head and registered office to 400 - 4th Avenue S.W., Calgary, AB, T2P 0J4.

   These interim consolidated financial statements and the related notes have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (the "IFRS Accounting Standards"), applicable to the preparation of interim financial statements, including International Accounting Standard ("IAS") 34 "Interim Financial Reporting". The accounting policies applied are consistent with those used in the audited consolidated financial statements of the Company as at December 31, 2025, except as disclosed in note 2. These interim consolidated financial statements contain disclosures that are supplemental to the Company's annual audited consolidated financial statements. Certain disclosures normally required to be included in the notes to the annual audited consolidated financial statements have been condensed. These interim consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended December 31, 2025.

   Critical Accounting Estimates and Judgements

   The Company has made estimates, assumptions, and judgements regarding certain assets, liabilities, revenues, and expenses in the preparation of these interim consolidated financial statements, primarily related to unsettled transactions and events as of the date of these interim consolidated financial statements. Accordingly, actual results may differ from estimated amounts, and those differences may be material.

2. CHANGE IN ACCOUNTING POLICIES

   In May 2024, the IASB issued amendments to IFRS 9 "Financial Instruments" and IFRS 7 "Financial Instruments: Disclosures" to clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled using an electronic payment system. The amendments also clarify the classification of certain financial assets, and add disclosure requirements for financial instruments with certain contingent features and for equity investments designated at fair value through other comprehensive income. The amendments were adopted January 1, 2026 retrospectively without restating comparative information in the interim consolidated statements of cash flows.

3. ACCOUNTING STANDARDS ISSUED BUT NOT YET APPLIED

   In April 2024, the IASB issued IFRS 18 "Presentation and Disclosure in Financial Statements", which provides presentation and disclosure requirements for the primary financial statements and related notes, replacing IAS 1 "Presentation of Financial Statements". IFRS 18 introduces defined categories for income and expenses and requires disclosure of new defined subtotals, including operating profit. The new standard also requires additional notes for management-defined performance measures ("MPMs") and disclosure of certain expenses by nature. There are some associated changes to the statement of cash flows, including the starting point for the calculation of cash flows from operating activities and the categorization of interest and dividends. IFRS 18 is effective January 1, 2027, with early adoption permitted. The new standard is required to be adopted retrospectively.

   The Company is continuing its assessment of the impact of adopting IFRS 18 on its consolidated financial statements and note disclosures. This assessment includes changes to the presentation of the consolidated balance sheets, consolidated statements of earnings, consolidated statements of cash flows, aggregation and disaggregation requirements, and identification and disclosure of MPMs. In addition, the Company is adapting its processes, where appropriate, to capture data required by IFRS 18 for inclusion in the consolidated financial statements and note disclosures. The Company will continue to evaluate the impacts and finalize implementation in advance of adoption on January 1, 2027.

4. EXPLORATION AND EVALUATION ASSETS

   Exploration and Production

   Oil Sands Mining and

   Upgrading Total

   North

   America North Sea

   Offshore Africa

   Cost
   At December 31, 2025	$ 2,594 $	- $ - $ 57	$ 2,651
   Additions/Acquisitions, net	145	- - -	145
   Transfers to property, plant and equipment	(7)	- - -	(7)
   At September 30, 2026	$ 2,732 $	- $ - $ 57	$ 2,789

5. PROPERTY, PLANT AND EQUIPMENT

   Exploration and Production

   Oil Sands Mining and Upgrading

   Midstream

   and Refining

   Head

   Office Total

   Cost

   North

   America North Sea

   Offshore Africa

   At December 31, 2025 $ 92,896	$ 9,270	$ 5,316	$ 60,570	$ 503	$ 699	$ 169,254
   Additions/Acquisitions, net 4,458	9	399	1,605	5	30	6,506
   Transfers from exploration and evaluation assets 7	-	-	-	-	-	7
   Derecognitions (1) (352)	(593)	-	(500)	-	(45)	(1,490)
   Foreign exchange adjustments and other -	329	196	-	-	-	525

   At September 30, 2026 $ 97,009 $ 9,015 $ 5,911 $ 61,675 $ 508 $ 684 $ 174,802

   Accumulated depletion and depreciation

   At December 31, 2025	$ 65,940 $	9,270	$ 4,035	$ 11,617	$ 246	$ 501	$ 91,609
   Expense	3,362	9	49	2,049	13	30	5,512

   Derecognitions (1) (352) (593) - (500) - (45) (1,490)

   Foreign exchange
   adjustments and other	(5)	329	157	(3)	-	-	478
   At September 30, 2026	$ 68,945	$ 9,015	$ 4,241	$ 13,163	$ 259	$ 486	$ 96,109
   Net book value
   At September 30, 2026	$ 28,064	$ -	$ 1,670	$ 48,512	$ 249	$ 198	$ 78,693
   At December 31, 2025	$ 26,956	$ -	$ 1,281	$ 48,953	$ 257	$ 198	$ 77,645

   1. An asset is derecognized when no future economic benefits are expected to arise from its continued use.

During the first and second quarters of 2026, the Company acquired a number of producing and non-producing crude oil and NGLs, and natural gas assets in the North America Exploration and Production segment. These transactions were accounted for using the business combination method of accounting and are summarized below.

Peace River Crude Oil and NGLs, and Natural Gas Acquisitions

During the second quarter of 2026, the Company acquired certain producing and non-producing crude oil and NGLs, and natural gas assets for net cash consideration of $756 million, subject to final closing adjustments. Net assets acquired included exploration and evaluation assets of $33 million, and property, plant and equipment of $759 million. The Company also assumed asset retirement obligations of $31 million, and assumed net working capital of $5 million. No net deferred tax liabilities were recognized on this transaction.

During the first quarter of 2026, the Company acquired certain producing and non-producing crude oil and NGLs, and natural gas assets for net cash consideration of $761 million, subject to final closing adjustments. Net assets acquired included exploration and evaluation assets of $65 million, and property, plant and equipment of $796 million. The Company also assumed asset retirement obligations of $100 million. No net deferred tax liabilities were recognized on this transaction.

Pro Forma Information

As a result of the acquisition of assets in the Peace River area completed in the second quarter of 2026, revenue increased by approximately $116 million and net operating income (comprised of revenue, less production and transportation expense) increased by approximately $81 million for the period subsequent to the acquisition. Including the impact of depletion, depreciation and amortization, earnings before tax increased by approximately $60 million for the period subsequent to the acquisition.

As a result of the acquisition of assets in the Peace River area completed in the first quarter of 2026, revenue increased by approximately $343 million and net operating income (comprised of revenue, less production and transportation expense) increased by approximately $219 million for the period subsequent to the acquisition. Including the impact of depletion, depreciation and amortization, earnings before tax increased by approximately $157 million for the period subsequent to the acquisition.

If the acquisitions of assets in the Peace River area had been completed on January 1, 2026, the Company estimates that pro forma revenue would have increased by approximately $651 million and pro forma net operating income (comprised of revenue, less production and transportation expense) would have increased by approximately $437 million for the nine months ended September 30, 2026. Including the impact of depletion, depreciation and amortization, the Company estimates earnings before taxes would have increased by approximately $318 million for the nine months ended September 30, 2026. Readers are cautioned that pro forma estimates are not necessarily indicative of the results of operations that would have been achieved had the acquisitions actually occurred on January 1, 2026, or of future results. Pro forma results are based on historical information and reflect actual production in the period available for the assets as provided to the Company and do not include any synergies that have or may arise subsequent to the acquisition dates.

The Company measures its lease liabilities at the discounted value of its lease payments during the lease term. Lease liabilities as at September 30, 2026 were as follows:

Total cash outflows for leases for the three months ended September 30, 2026, including payments related to short-term leases not reported as lease assets, were $486 million (three months ended September 30, 2025 - $376 million; nine months ended September 30, 2026 - $1,302 million; nine months ended September 30, 2025 - $1,108 million). Interest expense on leases for the three months ended September 30, 2026 was $32 million (three months ended September 30, 2025 - $16 million; nine months ended September 30, 2026 - $100 million; nine months ended September 30, 2025 -

$47 million).

1. OTHER LONG-TERM ASSETS

   	Sep 30 2026	Dec 31 2025
   Long-term prepayments, contracts and other (1)	$ 434	$ 419
   Prepaid cost of service tolls	182	229
   Long-term inventory	291	291
   	907	939
   Less: current portion	151	70
   	$ 756	$ 869

   1. Includes physical product sales contracts, interest on Petroleum Revenue Tax ("PRT") recoveries in the North Sea, and the unamortized cost of contributions to the Company's employee bonus program.

      The Company has a 50% equity investment in NWRP. NWRP operates a bitumen upgrader and refinery with an output capacity of approximately 80,000 barrels per day. The refinery's processing design capacity is approximately 50,000 barrels per day of bitumen feedstock, including 12,500 barrels per day of bitumen feedstock for the Company (25% toll payer) and 37,500 barrels per day of bitumen feedstock for the Alberta Petroleum Marketing Commission ("APMC") (75% toll payer), an agent of the Government of Alberta. Bitumen feedstock throughput can exceed design capacity when asset reliability and operational performance support higher processing rates. The Company is unconditionally obligated to pay its 25% pro rata share of the debt component of the monthly fee-for-service toll over the 40-year tolling period until 2058 (note 16). Sales of diesel and other refined products and associated refining tolls are recognized in the Midstream and Refining segment (note 17).

      The carrying value of the Company's interest in NWRP is $nil, and as at September 30, 2026, the cumulative unrecognized share of the equity loss and partnership distributions from NWRP was $373 million (December 31, 2025 - $496 million). For the three months ended September 30, 2026, the Company's recovery of its share of unrecognized equity losses was

      $43 million (nine months ended September 30, 2026 - recovery of unrecognized equity losses of $134 million; three months ended September 30, 2025 - recovery of unrecognized equity losses of $21 million; nine months ended September 30, 2025 - recovery of unrecognized equity losses of $26 million). For the three and nine months ended September 30, 2026, the Company received partnership distributions of $11 million.

2. LONG-TERM DEBT

   	Sep 30 2026	Dec 31 2025
   Canadian dollar denominated debt, unsecured
   Medium-term notes	$ 2,675	$ 3,116
   US dollar denominated debt, unsecured
   Bank credit facilities (September 30, 2026 - US$2,839 million;
   December 31, 2025 - US$2,860 million)	4,029	3,922
   US dollar debt securities (September 30, 2026 - US$7,050 million;
   December 31, 2025 - US$7,050 million)	10,004	9,669
   	16,708	16,707
   Less: original issue discounts, net (1)	12	14
   transaction costs (1) (2)	63	76
   	16,633	16,617
   Less: current portion of long-term debt (1) (2)	1,772	441
   	$ 14,861	$ 16,176

   1. The Company has included unamortized original issue discounts and premiums, and directly attributable transaction costs in the carrying amount of the outstanding debt.

   2. Transaction costs primarily represent underwriting commissions charged as a percentage of the related debt offerings, as well as legal, rating agency, and other professional fees.

      Bank Credit Facilities and Commercial Paper

      As at September 30, 2026, the Company had undrawn bank credit facilities of $5,421 million, and a fully drawn non-revolving term credit facility of $4,000 million. Details of these facilities are described below. The Company also has certain other dedicated credit facilities supporting letters of credit.

      • a $100 million demand credit facility;

      • a $500 million revolving credit facility, maturing June 2027;

      • a $4,000 million non-revolving term credit facility, maturing December 2027;

      • a $2,425 million revolving syndicated credit facility, maturing June 2028; and

      • a $2,425 million revolving syndicated credit facility, maturing June 2029.

        During the first quarter of 2026, the Company cancelled the $140 million portion of its $2,565 million revolving syndicated credit facility, maturing June 2027, reducing the capacity to $2,425 million, with a maturity of June 2029.

        Borrowings under the Company's credit facilities may be made by way of pricing referenced to CORRA, SOFR, US base rate or Canadian prime rate.

        The Company's borrowings under its US commercial paper program are authorized up to a maximum of US$2,500 million. The Company reserves capacity under its revolving bank credit facilities for amounts outstanding under this program.

        The Company's weighted average interest rate on bank credit facilities outstanding as at September 30, 2026 was 5.1% (September 30, 2025 - 4.9%), and on total long-term debt outstanding for the nine months ended September 30, 2026 was 5.0% (nine months ended September 30, 2025 - 5.0%).

        As at September 30, 2026, letters of credit and other financial security aggregating to $959 million were outstanding (December 31, 2025 - $840 million).

        Medium-Term Notes

        During the third quarter of 2026, the Company repaid $441 million of 3.42% medium-term notes originally due December 1, 2026.

        In August 2025, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to

        $3,000 million of medium-term notes in Canada, which expires in September 2027. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance. As at September 30, 2026, the Company had $1,350 million remaining on its base shelf prospectus.

        US Dollar Debt Securities

        In August 2025, the Company filed a base shelf prospectus that allows for the offer for sale from time to time of up to US$4,500 million of debt securities in the United States, which expires in September 2027. If issued, these securities may be offered in amounts and at prices, including interest rates, to be determined based on market conditions at the time of issuance. As at September 30, 2026, the Company had US$3,003 million remaining on its base shelf prospectus.

3. OTHER LONG-TERM LIABILITIES

   	Sep 30 2026	Dec 31 2025
   Asset retirement obligations	$ 9,621	$ 9,743
   Lease liabilities (note 6)	2,943	3,106
   Share-based compensation	881	433
   Risk management (note 15)	445	65
   Transportation and processing contracts	173	186
   Other	86	68
   	14,149	13,601
   Less: current portion	2,214	1,665
   	$ 11,935	$ 11,936

   Asset Retirement Obligations

   The Company's asset retirement obligations are expected to be settled on an ongoing basis over a period of approximately 60 years and discounted using a weighted average discount rate of 4.9% (December 31, 2025 - 4.9%) and inflation rates of up to 2% (December 31, 2025 - up to 2%). Reconciliations of the discounted asset retirement obligations were as follows:

   	Sep 30 2026	Dec 31 2025
   Balance - beginning of period	$ 9,743	$ 8,607
   Liabilities incurred	31	34
   Liabilities acquired, net	134	489
   Liabilities settled	(677)	(771)
   Asset retirement obligation accretion	294	380
   Revision of cost, inflation, and timing estimates (1)	-	1,233
   Change in discount rates	-	(129)
   Foreign exchange adjustments	96	(100)
   Balance - end of period	9,621	9,743
   Less: current portion	1,302	956
   	$ 8,319	$ 8,787

   1. Includes normal course revisions of cost, inflation, and timing estimates, as well as revisions to decommissioning timing and cost estimates in the North Sea and in Offshore Africa in 2025.

      Share-Based Compensation

      The liability for share-based compensation includes costs incurred under the Company's Stock Option Plan and Performance Share Unit ("PSU") Plan. The Company's Stock Option Plan provides current employees with the right to elect to receive common shares or a cash payment in exchange for stock options surrendered. The PSU Plan provides certain executive employees of the Company with the right to receive a cash payment, the amount of which is determined with reference to the value of the Company's shares, by individual employee performance, and the extent to which certain other performance measures are met.

      The Company recognizes a liability for potential cash settlements under these plans. The current portion of the liability represents the maximum amount of the liability payable within the next twelve month period if all vested stock options and PSUs are settled in cash.

      	Sep 30 2026	Dec 31 2025
      Balance - beginning of period	$ 433	$ 620
      Share-based compensation expense	879	180
      Cash payment for stock options surrendered and PSUs vested	(177)	(94)
      Transferred to common shares	(265)	(273)
      Other	11	-
      Balance - end of period	881	433
      Less: current portion	548	312
      	$ 333	$ 121

4. INCOME TAXES

   The provision for income tax was as follows:

   Three Months Ended Nine Months Ended

   Expense (recovery)	Sep 30 2026	Sep 30 2025	Sep 30 2026	Sep 30 2025
   Current corporate income tax - North America (1) Current corporate income tax - North Sea Current corporate income tax - Offshore Africa Current PRT (2) - North Sea Other taxes	$ 1,098 (19) 5 (66) 1	$ 499 (37) - (45) 2	$ 2,933 (118) 6 (180) 6	$ 1,597 (108) 5 (133) 7
   Current income tax	1,019	419	2,647	1,368
   Deferred corporate income tax Deferred PRT (2) - North Sea	(149) 38	(143) (389)	67 (39)	(130) (362)
   Deferred income tax	(111)	(532)	28	(492)
   Income tax	$ 908	$ (113)	$ 2,675	$ 876

   1. Includes North America Exploration and Production, Oil Sands Mining and Upgrading, and Midstream and Refining segments.

   2. Petroleum Revenue Tax.

5. SHARE CAPITAL Authorized

   Preferred shares issuable in a series.

   Unlimited number of common shares without par value.

   Issued Common Shares	Nine Months Ended Sep 30, 2026 Number of shares (thousands) Amount
   Balance - beginning of period	2,081,578	$ 11,421
   Issued upon exercise of stock options	10,921	345
   Previously recognized liability on stock options exercised for
   common shares	-	265
   Purchase of common shares under Normal Course Issuer Bid	(46,975)	(269)
   Balance - end of period	2,045,524	$ 11,762

   Dividends

   The Company has paid regular quarterly dividends in each year since 2001. The dividend policy undergoes periodic review by the Board of Directors and is subject to change.

   On March 4, 2026, the Board of Directors approved a 6% increase in the quarterly dividend to $0.625 per common share, beginning with the dividend paid on April 7, 2026.

   On March 5, 2025, the Board of Directors approved a 4% increase in the quarterly dividend to $0.5875 per common share.

   Normal Course Issuer Bid

   On March 10, 2026, the Company's application was approved for a Normal Course Issuer Bid to purchase through the facilities of the Toronto Stock Exchange ("TSX"), alternative Canadian trading platforms, and the New York Stock Exchange ("NYSE"), up to 182,396,564 common shares, representing 10% of the public float, over a 12-month period commencing March 13, 2026 and ending March 12, 2027, subject to applicable securities laws.

   For the nine months ended September 30, 2026, the Company purchased 46,975,000 common shares at a weighted average price of $64.01 per common share for a total cost, including tax, of $3,055 million. Retained earnings were reduced by $2,786 million, representing the excess of the purchase price of common shares over their average carrying value. Subsequent to September 30, 2026, up to and including November 3, 2026, the Company purchased 10,800,000 common shares at a weighted average price of $73.64 per common share for a total cost, including tax, of $811 million.

   Share-Based Compensation - Stock Options

   The following table summarizes information relating to stock options outstanding as at September 30, 2026:

   	Nine Months Ended Sep 30, 2026 Weighted Stock options average (thousands) exercise price
   Outstanding - beginning of period	54,734 $ 39.83
   Granted	17,867 55.82
   Exercised for common shares	(10,921) 31.60
   Surrendered for cash settlement	(5,111) 39.33
   Forfeited	(1,778) 44.04
   Outstanding - end of period	54,791 $ 46.59
   Exercisable - end of period	6,081 $ 40.11

   The Stock Option Plan is a "rolling 7%" plan, whereby the aggregate number of common shares that may be reserved for issuance under the plan shall not exceed 7% of the common shares outstanding from time to time.

6. ACCUMULATED OTHER COMPREHENSIVE INCOME

   The components of accumulated other comprehensive income, net of taxes, were as follows:

   	Sep 30 2026	Sep 30 2025
   Derivative financial instruments designated as cash flow hedges Foreign currency translation adjustment	$ 63 197	$ 69 166
   	$ 260	$ 235

7. CAPITAL DISCLOSURES

   The Company has defined its capital to mean its long-term debt and consolidated shareholders' equity, as determined at each reporting date.

   The Company's objectives when managing its capital structure are to maintain financial flexibility and balance to enable the Company to access capital markets to sustain its on-going operations and support its growth strategies. The Company primarily monitors capital on the basis of an internally derived financial measure referred to as its "debt to book capitalization ratio", which is the ratio of current and long-term debt less cash and cash equivalents divided by the sum of the carrying value of shareholders' equity plus current and long-term debt less cash and cash equivalents. As at September 30, 2026, the ratio was 20.5%.

   Readers are cautioned that the debt to book capitalization ratio is not defined by IFRS Accounting Standards and this financial measure may not be comparable to similar measures presented by other companies. Further, there are no assurances that the Company will continue to use this measure to monitor capital or will not alter the method of calculation of this measure in the future.

   	Sep 30 2026	Dec 31 2025
   Long-term debt	$ 16,633	$ 16,617
   Less: cash and cash equivalents	4,516	673
   Long-term debt, net	$ 12,117	$ 15,944
   Total shareholders' equity	$ 46,930	$ 44,366
   Debt to book capitalization	20.5%	26.4%

   The Company is subject to a financial covenant that requires debt to book capitalization as defined in its credit facility agreements to not exceed 65%. As at September 30, 2026, the Company was in compliance with this covenant.

8. NET EARNINGS PER COMMON SHARE

   Three Months Ended Nine Months Ended

   	Sep 30 2026	Sep 30 2025	Sep 30 2026	Sep 30 2025
   Weighted average common shares outstanding - basic (thousands of shares) Effect of dilutive stock options (thousands of shares)	2,058,063 13,850	2,087,944 6,046	2,073,395 12,269	2,093,827 7,001
   Weighted average common shares outstanding - diluted (thousands of shares)	2,071,913	2,093,990	2,085,664	2,100,828
   Net earnings	$ 2,997	$ 600	$ 8,848	$ 5,517
   Net earnings per common share - basic - diluted	$ 1.46 $ 1.45	$ 0.29 $ 0.29	$ 4.27 $ 4.24	$ 2.64 $ 2.63

9. FINANCIAL INSTRUMENTS

   The Company's financial instruments are comprised of cash and cash equivalents, accounts receivable, risk management assets and liabilities, accounts payable, accrued liabilities, lease liabilities, and long-term debt. These financial instruments, with the exception of risk management assets and liabilities, are classified as financial assets and liabilities at amortized cost. Risk management assets and liabilities are classified as derivatives held for trading, cash flow hedges, or embedded derivatives.

   The estimated fair values of derivative financial instruments in Level 2 and Level 3 at each measurement date have been determined based on appropriate internal valuation methodologies and/or third party indications, including quoted forward prices for commodities, foreign exchange rates, interest yield curves, and other volatility factors.

   The changes in estimated fair values of derivative financial instruments included in the risk management asset (liability) were recognized in the financial statements as follows:

   Asset (liability)	Sep 30 2026	Dec 31 2025
   Balance - beginning of period	$ (65)	$ 5
   Net change in fair value of outstanding derivative financial instruments recognized in:
   Risk management activities (1) (2) (3) (4) (5)	(380)	(68)
   Foreign exchange	-	(1)
   Other comprehensive income	-	(1)
   Balance - end of period	(445)	(65)
   Less: current portion	(8)	(8)
   	$ (437)	$ (57)

   1. Risk management liabilities are disclosed in note 9.

   2. In the third quarter of 2026, the Company entered into fixed price financial contracts to buy 25,000 MMBtu/d of natural gas at US$1.32 AECO for the period of August to December 2026, and 25,000 MMBtu/d of natural gas at US$1.74 AECO for the period of January to December 2027.

   3. In the third quarter of 2025, the Company entered into fixed price financial contracts to buy 12,500 MMBtu/d of natural gas at US$1.30 AECO for the period of August to December 2025, and 25,000 MMBtu/d of natural gas at US$2.16 AECO for the period of January to December 2026.

   4. In the second quarter of 2025, the Company entered into a long-term natural gas supply agreement that contains an embedded derivative.

   5. In the fourth quarter of 2024, the Company entered into fixed price financial contracts to buy 12,500 MMBtu/d of natural gas at US$1.47 AECO, and 25,000 MMBtu/d of natural gas at US$1.82 AECO for the period of January to December 2025.

      Net loss (gain) from risk management activities was as follows:

      Three Months Ended Nine Months Ended

      	Sep 30 2026	Sep 30 2025	Sep 30 2026	Sep 30 2025
      Net realized risk management loss (gain) Net unrealized risk management loss	$ 7 72	$ 54 160	$ 104 380	$ (62) 148
      	$ 79	$ 214	$ 484	$ 86

      The carrying amounts of the Company's financial instruments approximated their fair value, except for fixed rate long-term debt. The Company's financial instruments are categorized as Level 1 with the exception of risk management assets and liabilities, which are categorized as Level 2, and embedded derivatives, which are categorized as Level 3. There were no transfers between Level 1, 2, and 3 financial instruments. The fair values of the Company's fixed rate long-term debt is outlined below:

      	Sep 30, 2026
      	Carrying amount	Level 1 Fair Value
      Fixed rate long-term debt (1) (2)	$ 12,604	$ 12,305

      1. The fair value of fixed rate long-term debt has been determined based on quoted market prices.

      2. Includes the current portion of fixed rate long-term debt.

      Embedded Derivative

      During the second quarter of 2025, the Company entered into a long-term natural gas supply agreement to supply 140,000 MMBtu/d of natural gas for a term of 15 years, with delivery anticipated to begin in 2030 as all conditions precedent have been waived by the counterparty. Under the terms of the agreement, the Company will deliver natural gas to its counterparty in Illinois, USA and receive a Japan Korea Marker ("JKM") index price less deductions for transportation and liquefaction. The contract includes an embedded derivative as a result of the pricing structure, and the host contract is the natural gas sales agreement with a Chicago Citygate price.

      The natural gas embedded derivative is categorized as Level 3 within the fair value hierarchy, as the fair value is determined using a discounted estimated cash flow model which incorporates significant unobservable inputs, including future natural gas pricing and a discount rate.

      The Company recognizes losses and gains on its risk management activities in the statements of earnings related to its natural gas embedded derivative, which are determined by the relative movements in fair value as compared to the prior period. For the three months ended September 30, 2026, the Company recognized an unrealized risk management loss of

      $70 million on the natural gas embedded derivative (nine months ended September 30, 2026 - unrealized loss of

      $380 million; three months ended September 30, 2025 - unrealized loss of $156 million; nine months ended September 30, 2025 - unrealized loss of $145 million). As at September 30, 2026, the fair value of the natural gas embedded derivative was a liability of $437 million (December 31, 2025 - $57 million liability).

      The Level 3 fair value measurements of the embedded derivative could be materially impacted by a change in the discount rate and movements in natural gas prices. The following table summarizes the impacts to the fair value of the embedded derivative resulting from changes in the specified variable over the 15-year contract. These sensitivities as at September 30, 2026 are theoretical, as changes in one variable may contribute to changes in another variable, which may magnify or counteract the sensitivities.

      JKM price Discount rate

      US$0.10/MMBtu US$0.10/MMBtu

      increase decrease 1% increase 1% decrease

      Fair value - increase/(decrease) $ 55 $ (55) $ (48) $ 57

      Financial Risk Factors

      The Company's financial risks are consistent with those discussed in notes 1, 3 and 18 of the Company's audited consolidated financial statements for the year ended December 31, 2025.

      1. Market risk

         Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. The Company's market risk is comprised of commodity price risk, interest rate risk, and foreign currency exchange rate risk.

         Commodity price risk management

         The Company periodically uses commodity derivative financial instruments to manage its exposure to commodity price risk associated with the sale of its future crude oil and natural gas production, and with natural gas purchases. These financial instruments are entered into solely for hedging purposes and are not used for speculative purposes.

         The Company's outstanding commodity derivative financial instruments are expected to be settled monthly based on the applicable index pricing for the respective contract month.

         Interest rate risk management

         The Company is exposed to interest rate price risk on its fixed rate long-term debt and to interest rate cash flow risk on its floating rate long-term debt. As at September 30, 2026, the Company had no interest rate swap contracts outstanding.

         Foreign currency exchange rate risk management

         The Company is exposed to foreign currency exchange rate risk in Canada primarily related to its US dollar denominated long-term debt, commercial paper, and working capital. The Company is also exposed to foreign currency exchange rate risk on transactions conducted in other currencies and in the carrying value of its foreign subsidiaries. The Company periodically enters into foreign currency forward contracts, SOFR loans, and commercial paper to mitigate its foreign currency exchange rate risk.

         As at September 30, 2026, the Company had US$1,504 million of foreign currency forward contracts outstanding (December 31, 2025 - US$1,500 million), with original terms of up to 90 days, all of which were designated as derivatives held for trading (December 31, 2025 - US$1,500 million).

      2. Credit risk

         Credit risk is the risk that a party to a financial instrument will cause a financial loss to the Company by failing to discharge an obligation.

         Counterparty credit risk management

         The Company's accounts receivable are mainly with customers in the crude oil and natural gas industry and are subject to normal industry credit risks. The Company manages these risks by reviewing its exposure to individual companies on a regular basis and, where appropriate, ensuring that parental guarantees or letters of credit are in place to minimize the impact in the event of default. As at September 30, 2026, substantially all of the Company's accounts receivable were due within normal trade terms.

         The Company is also exposed to possible losses in the event of nonperformance by counterparties to derivative financial instruments; however, the Company manages this credit risk by entering into agreements with counterparties that are substantially all investment grade financial institutions. The carrying amount of financial assets approximates the maximum credit exposure.

      3. Liquidity risk

         Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. Management of liquidity risk requires the Company to maintain sufficient cash and cash equivalents, along with other sources of capital, consisting primarily of cash flow from operating activities, available credit facilities, commercial paper, and access to debt capital markets, to meet obligations as they become due. The Company believes it has adequate bank credit facilities to provide liquidity to manage fluctuations in the timing of the receipt and/or disbursement of operating cash flows.

         As at September 30, 2026, the maturity dates of the Company's financial liabilities were as follows:

         	Less than 1 year	1 to less than 2 years	2 to less than 5 years	Thereafter
         Accounts payable	$ 2,831	$ -	$ -	$ -
         Accrued liabilities	$ 5,606	$ -	$ -	$ -
         Long-term debt (1)	$ 1,772	$ 4,254	$ 2,875	$ 7,807
         Other long-term liabilities (2) (3)	$ 339	$ 286	$ 614	$ 2,275
         Interest and other financing expense (4)	$ 964	$ 734	$ 1,811	$ 3,342

         1. Long-term debt represents principal repayments only and does not reflect interest, original issue discounts and premiums or transaction costs.

         2. Lease payments included within other long-term liabilities reflect principal payments only and are as follows; less than one year, $331 million; one to less than two years, $286 million; two to less than five years, $614 million; and thereafter, $1,712 million.

         3. Includes a gross derivative liability of $563 million associated with the Company's natural gas embedded derivative. The gross liability is offset by a gross derivative asset of $126 million, resulting in a net liability of $437 million.

         4. Includes interest and other financing expense on long-term debt and other long-term liabilities. Payments were estimated based upon applicable interest and foreign exchange rates as at September 30, 2026.

10. COMMITMENTS AND CONTINGENCIES‌

    In the normal course of business, the Company has committed to certain payments. The following table summarizes the Company's commitments as at September 30, 2026:

    Remaining

    	2026		2027		2028		2029		2030		Thereafter
    Product transportation, purchases, and processing (1) (2)	$ 590		$ 2,280		$ 2,167		$ 2,014		$ 1,852		$ 19,882
    North West Redwater Partnership service toll (3)	$	23	$	96	$	97	$	95	$	95	$	3,877
    Offshore vessels and decommissioning equipment	$	324	$	-	$	-	$	-	$	-	$	-
    Field equipment and supplies	$ 52		$ 122		$ 121		$ 24		$ 24		$ 170
    Office leases and other	$ 72		$ 67		$ 20		$ 20		$ 19		$ 179

    1. The Company's commitment under its product transportation agreement on the Trans Mountain Expansion pipeline reflects the toll approved by the Canada Energy Regulator in the third quarter of 2026. The Company's product transportation commitment was extended through 2046, with capacity increased to approximately 178,000 bbl/d.

    2. In the second quarter of 2026, the Company executed crude oil transportation agreements delivering between 150,000 bbl/d and 165,000 bbl/d of new pipeline capacity to US markets, with service currently expected to commence in the fourth quarter of 2028. These agreements are subject to certain conditions precedent, including a final investment decision by the project proponents and certain regulatory approvals. Accordingly, the related agreements will not be recognized as commitments until the completion of all conditions precedent. The transportation agreements have a term of 20 years and, if all conditions are met, will result in transportation payments of approximately $500 million to $550 million annually being added to the Company's commitments.

    3. Pursuant to the processing agreements, the Company pays its 25% pro rata share of the debt component of the monthly fee-for-service toll. Included in the toll is $1,728 million of interest payable over the 40-year tolling period, ending in 2058 (note 7).

       In addition to the commitments disclosed above, the Company has entered into various agreements related to the engineering, procurement, and construction of its various development projects. These contracts can be cancelled by the Company upon notice without penalty, subject to the costs incurred up to and in respect of the cancellation.

       The Company is defendant and plaintiff in a number of legal actions arising in the normal course of business. In addition, the Company is subject to certain contractor construction claims. The Company believes that any liabilities that might arise pertaining to any such matters would not have a material effect on its consolidated financial position.

11. SEGMENTED INFORMATION

North America North Sea Offshore Africa Total Exploration and Production

Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30

Segmented earnings (loss) Non-segmented expenses Administration

Share-based compensation

Interest and other financing expense

Risk management loss (gain) (other)

Foreign exchange loss (gain)

Total non-segmented expenses

Earnings before taxes Current income tax Deferred income tax Net earnings

$ 2,087

$ 699

$ 5,774

$ 3,232

$ (45) $ (1,334) $ (113) $ (1,510) $ 18

$ (9) $ (15) $ (2) $ 2,060

$ (644) $ 5,646

$ 1,720

(millions of Canadian dollars, unaudited)

Segmented product sales

Crude oil and NGLs (1) (2)

Natural gas (1)

Other income and revenue Total segmented product sales Less: royalties

Segmented revenue Segmented expenses Production

Blending and feedstock (2)

Transportation

Depletion, depreciation and amortization (3)

Asset retirement obligation accretion

Risk management loss (commodity derivatives)

Gain on acquisition Investment income

Total segmented expenses

Oil Sands Mining and Upgrading Midstream and Refining Inter-segment Elimination and Other Total

Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Three Months Ended Nine Months Ended Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30 Sep 30

Segmented earnings (loss) Non-segmented expenses Administration

Share-based compensation

Interest and other financing expense

Risk management loss (gain) (other)

Foreign exchange loss (gain)

Total non-segmented expenses

Earnings before taxes Current income tax Deferred income tax Net earnings

$ 2,576

$ 1,818

$ 8,372

$ 5,285

$ 96

$ (37) $ 181

$ (94) $ (1) $ -

$ (1) $ 2

$ 4,731

165

431

220

7

3

826

3,905

1,019

(111)

$ 2,997

$ 1,137

152

63

93

52

290

650

487

419

(532)

$ 600

$ 14,198

478

879

776

96

446

2,675

11,523

2,647

28

$ 8,848

$ 6,913

455

97

589

(65)

(556)

520

6,393

1,368

(492)

$ 5,517

1. Product sales in the North America Exploration and Production and Oil Sands Mining and Upgrading segments originate in Canada.

2. Includes blending and feedstock costs associated with the processing of third party bitumen and other purchased feedstock in the Oil Sands Mining and Upgrading segment.

3. Includes $1,258 million for revisions to abandonment and decommissioning costs in the North Sea for the three and nine months ended September 30, 2025.

Nine Months Ended

1. This table provides a reconciliation of capitalized costs, reported in note 4 and note 5, to net expenditures reported in the investing activities section of the statements of cash flows. The reconciliation excludes the impact of foreign exchange adjustments.

2. Derecognitions, asset retirement obligations, transfer of exploration and evaluation assets, and other fair value adjustments.

The following financial ratios are provided in connection with the Company's continuous offering of medium-term notes

pursuant to the short form prospectus dated August 2025. These ratios are based on the Company's interim consolidated financial statements that are prepared in accordance with accounting principles generally accepted in Canada.

Interest coverage ratios (times) for the twelve month period ended September 30, 2026:

Net earnings (1) 19.0x

Adjusted funds flow (2) 24.2x

1. Net earnings plus income taxes and interest expense; divided by interest expense.

2. Adjusted funds flow (as defined in the Company's Management's Discussion and Analysis), plus current income taxes and interest expense; divided by interest expense.