Oil producers have cut spending plans in response to the novel coronavirus, and Canadian Natural, like most of its peers, reduced budget and cut drilling activity to deal with the challenging commodity price environment.

Canada's biggest oil producer said average prices for its natural gas, a byproduct of crude production, rose 2.5% to C$2.03 per barrel in the reported quarter.

The company said North American natural gas operating costs averaged C$1.11 per thousand cubic feet (Mcf) in the quarter, a decrease of 3% from a year earlier, as it took steps to control expenses. Overall expenses fell 13.3% to C$3.48 billion ($2.62 billion).

Canadian Natural, which cut roughly 14% of its production in May, also signaled support for the Alberta government's mandatory output limits designed to help the industry in Canada's main oil-producing province, home to the world's third-largest reserves.

The company reported a 13.6% jump in second-quarter output after restoring most of the curtailed volumes in June, and said prices continue to improve due to reduced activity in the Western Canadian Sedimentary Basin, production declines through curtailments and shut-ins.

Average realized prices for crude and natural gas liquids, however, plunged over 70% to C$18.97 per barrel in the second quarter, before risk management.

On an adjusted basis, the company lost 65 Canadian cents per share in the second quarter ended June 30, while analysts expected a loss of 80 Canadian cents per share, according to Refinitiv IBES data.

(Reporting by Arundhati Sarkar in Bengaluru; Editing by Krishna Chandra Eluri)