Canadian Natural's President, Tim McKay, commented on the Company's second quarter 2022 results 'Our world class asset base is strategically balanced across commodity types so we can be flexible and capture opportunities throughout the commodity price cycle to maximize value for our shareholders.
A substantial portion of our unique and diverse asset base consists of long life low decline assets which have significant, low risk, high value reserves that require lower maintenance capital than most other reserves, making Canadian Natural a truly robust and resilient energy company.
Our culture of continuous improvement with a focus on cost control and safe, effective and efficient operations, and our disciplined approach to capital allocation continues to drive strong operating results. Total corporate production averaged approximately 1,211 MBOE/d in Q2/22, including record quarterly natural gas production of approximately 2.1 Bcf/d which has grown over 30% from Q2/21 levels. We completed turnarounds at our Oil Sands Mining and Upgrading assets in Q2/22, with both mines having returned to full production rates, capturing a strong Synthetic Crude Oil ('SCO') price premium to WTI. So far in 2022, we have had strong execution and have realized efficiencies in both of our Conventional E&P and thermal in situ drilling programs, resulting in the drilling program being ahead of forecast in terms of actual versus planned wells drilled year-to-date, with comparable costs on a per well basis. In order to maximize value, we plan to continue with our operational momentum in the second half of 2022 maintaining the same base level of operating drilling rigs (approximately 13) to drill additional Conventional E&P wells beyond our original 2022 forecasted levels, which essentially backfills the latter half of our drilling program. Additionally, as part of our strategic growth plan released in January 2022, we are now targeting to drill 15 additional net thermal in situ wells in 2022. Our updated 2022 base and strategic growth capital program is now targeted to be approximately $4.9 billion and corporate production guidance range is increasing to 1,295 MBOE/d to 1,335 MBOE/d.
Environmental, Social and Governance ('ESG') remains a priority for us as evidenced in our 2021 Stewardship Report to Stakeholders published today. This report highlights several of our ESG achievements, including top tier safety performance and the shared value achieved by working together across Canada with 144 Indigenous-owned businesses by which approximately $572 million in contracts were awarded in 2021, a 17% increase from 2020 levels. Additionally, Canadian Natural is a research and development ('R&D') investment leader. We have increased our R&D investment by 33% over 2020 levels with over $450 million invested in 2021 in technology development and deployment, with a focus of this investment on environmental footprint reduction, including reductions in greenhouse gas ('GHG') emissions, and productivity improvements.
The Company's strong track record of R&D investment will continue in 2022 and beyond and is targeted to grow with our participation in the Pathways Alliance. Working together with the federal and Alberta governments, the Pathways Alliance is a transformative industry collaboration with an actionable plan that will help us collectively be more effective and efficient from a time and cost perspective for Carbon Capture, Utilization and Storage ('CCUS') projects and other GHG reduction projects. The federal government's support through an investment tax credit as well as the Alberta government's support in principle are important to achieving ambitious GHG emissions reductions by 2030. The tax credit is a positive approach where industry and government can co-invest in CCUS infrastructure at an achievable pace of development. Canadian Natural will continue to provide input to government on the importance of balancing environmental and economic objectives along with being able to support Canada's allies with energy security.' Canadian Natural's Chief Financial Officer, Mark Stainthorpe, added 'We are committed to maximizing shareholder value through effective and nimble capital allocation. In Q2/22, Canadian Natural generated approximately $5.4 billion in adjusted funds flow, resulting in significant free cash flow of approximately $3.3 billion, after dividends of approximately $0.9 billion and net base capital expenditures of approximately $1.3 billion, excluding acquisitions and strategic growth capital. We continue to strengthen our balance sheet, having reduced net debt by approximately $1.4 billion in Q2/22, ending the quarter with approximately $12.4 billion in net debt. Returns to shareholders year-to-date in 2022 have been significant as we have returned approximately $2.4 billion through dividends and approximately $4.0 billion through share repurchases, for a total of $6.4 billion, up to and including August 3, 2022.
This includes the 28% increase to our sustainable and growing quarterly dividend in March 2022 to $0.75 per share, marking 2022 as the 22nd consecutive year of dividend increases. The increasing base dividend demonstrates the confidence that the Board of Directors has in the Company's world class assets and its ability to generate significant and sustainable free cash flow through the commodity price cycle. Our free cash flow allocation policy is unique in that shareholder returns are not impacted by strategic growth capital or acquisitions given our current net debt position is below $15 billion, and that our free cash flow is net of dividends. Through Q3/22, we will continue to target to allocate 50% of our free cash flow to share repurchases and 50% to the balance sheet. Strong execution across the Company's operations year-to-date has resulted in substantial free cash flow generation driven by our top tier long life low decline assets with low maintenance capital requirements and our low cost structure. As a result, our financial position continues to strengthen, allowing for incremental returns to shareholders. Reflecting this, in August 2022, the Board of Directors approved an increase in returns to shareholders by declaring a special dividend of $1.50 per share, payable on August 31, 2022 to shareholders of record on August 23, 2022. This is a step towards the previously announced target to increase shareholder returns when net debt reaches $8 billion, which the Board of Directors see as a sustainable base level of corporate debt. When you combine our leading financial results with our top tier asset base, this provides unique competitive advantages which drive material free cash flow generation allowing for significant returns to shareholders.'
Special Note Regarding Forward-Looking Statements
Certain statements relating to Canadian Natural Resources Limited (the 'Company') in this document or documents incorporated herein by reference constitute forward-looking statements or information (collectively referred to herein as 'forward-looking statements') within the meaning of applicable securities legislation. Forward-looking statements can be identified by the words 'believe', 'anticipate', 'expect', 'plan', 'estimate', 'target', 'continue', 'could', 'intend', 'may', 'potential', 'predict', 'should', 'will', 'objective', 'project', 'forecast', 'goal', 'guidance', 'outlook', 'effort', 'seeks', 'schedule', 'proposed', 'aspiration' or expressions of a similar nature suggesting future outcome or statements regarding an outlook. Disclosure related to expected future commodity pricing, forecast or anticipated production volumes, royalties, production expenses, capital expenditures, income tax expenses, and other targets provided throughout this press release and the Management's Discussion and Analysis ('MD&A') of the financial condition and results of operations of the Company, constitute forward-looking statements. Disclosure of plans relating to and expected results of existing and future developments, including, without limitation, those in relation to: the Company's assets at Horizon Oil Sands ('Horizon'), the Athabasca Oil Sands Project ('AOSP'), the Primrose thermal oil projects, the Pelican Lake water and polymer flood projects, the Kirby Thermal Oil Sands Project, the Jackfish Thermal Oil Sands Project and the North West Redwater bitumen upgrader and refinery; construction by third parties of new, or expansion of existing, pipeline capacity or other means of transportation of bitumen, crude oil, natural gas, natural gas liquids ('NGLs') or synthetic crude oil ('SCO') that the Company may be reliant upon to transport its products to market; the development and deployment of technology and technological innovations; the financial capacity of the Company to complete its growth projects and responsibly and sustainably grow in the long-term and the timing and impact of the Oil Sands Pathways to Net Zero ('Pathways') initiative, government support for Pathways and the ability to achieve net zero emissions from oil production, also constitute forward-looking statements. These forward-looking statements are based on annual budgets and multi-year forecasts, and are reviewed and revised throughout the year as necessary in the context of targeted financial ratios, project returns, product pricing expectations and balance in project risk and time horizons. These statements are not guarantees of future performance and are subject to certain risks.
The reader should not place undue reliance on these forward-looking statements as there can be no assurances that the plans, initiatives or expectations upon which they are based will occur. In addition, statements relating to 'reserves' are deemed to be forward-looking statements as they involve the implied assessment based on certain estimates and assumptions that the reserves described can be profitably produced in the future. There are numerous uncertainties inherent in estimating quantities of proved and proved plus probable crude oil, natural gas and NGLs reserves and in projecting future rates of production and the timing of development expenditures. The total amount or timing of actual future production may vary significantly from reserves and production estimates. The forward-looking statements are based on current expectations, estimates and projections about the Company and the industry in which the Company operates, which speak only as of the earlier of the date such statements were made or as of the date of the report or document in which they are contained, and are subject to known and unknown risks and uncertainties that could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements. Such risks and uncertainties include, among others: general economic and business conditions (including as a result of effects of the novel coronavirus ('COVID-19') pandemic, the actions of the Organization of the Petroleum Exporting Countries Plus ('OPEC+') and rising inflation rates) which may impact, among other things, demand and supply for and market prices of the Company's products, and the availability and cost of resources required by the Company's operations; volatility of and assumptions regarding crude oil and natural gas and NGLs prices including due to actions of OPEC+ taken in response to COVID-19 or otherwise; fluctuations in currency and interest rates; assumptions on which the Company's current targets are based; economic conditions in the countries and regions in which the Company conducts business; political uncertainty, including actions of or against terrorists, insurgent groups or other conflict including conflict between states; industry capacity; ability of the Company to implement its business strategy, including exploration and development activities; impact of competition; the Company's defense of lawsuits; availability and cost of seismic, drilling and other equipment; ability of the Company and its subsidiaries to complete capital programs; the Company's and its subsidiaries' ability to secure adequate transportation for its products; unexpected disruptions or delays in the mining, extracting or upgrading of the Company's bitumen products; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; ability of the Company to attract the necessary labour required to build, maintain, and operate its thermal and oil sands mining projects; operating hazards and other difficulties inherent in the exploration for and production and sale of crude oil and natural gas and in mining, extracting or upgrading the Company's bitumenproducts; availability and cost of financing; the Company's and its subsidiaries' success of exploration and development activities and its ability to replace and expand crude oil and natural gas reserves; the Company's ability to meet its targeted production levels; timing and success of integrating the business and operations of acquired companies and assets; production levels; imprecision of reserves estimates and estimates of recoverable quantities of crude oil, natural gas and NGLs not currently classified as proved; actions by governmental authorities (including any production curtailments mandated by the Government of Alberta); government regulations and the expenditures required to comply with them (especially safety and environmental laws and regulations and the impact of climate change initiatives on capital expenditures and production expenses); asset retirement obligations; the sufficiency of the Company's liquidity to support its growth strategy and to sustain its operations in the short, medium, and longterm; the strength of the Company's balance sheet; the flexibility of the Company's capital structure; the adequacy of the Company's provision for taxes and other circumstances affecting revenues and expenses. The Company's operations have been, and in the future may be, affected by political developments and by national, federal, provincial, state and local laws and regulations such as restrictions on production, changes in taxes, royalties and other amounts payable to governments or governmental agencies, price or gathering rate controls and environmental protection regulations. Should one or more of these risks or uncertainties materialize, or should any of the Company's assumptions prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements. The impact of any one factor on a particular forward-looking statement is not determinable with certainty as such factors are dependent upon other factors, and the Company's course of action would depend upon its assessment of the future considering all information then available. Readers are cautioned that the foregoing list of factors is not exhaustive. Unpredictable or unknown factors not discussed in this press release or the Company's MD&A could also have adverse effects on forward-looking statements. Although the Company believes that the expectations conveyed by the forward-looking statements are reasonable based on information available to it on the date such forward-looking statements are made, no assurances can be given as to future results, levels of activity and achievements. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements. Except as required by applicable law, the Company assumes no obligation to update forward-looking statements in this press release or the Company's MD&A, whether as a result of new information, future events or other factors, or the foregoing factors affecting this information, should circumstances or the Company's estimates or opinions change.
CANADIAN NATURAL RESOURCES LIMITED 
