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Imperial Oil Limited $IMO, Canada's second-biggest integrated oil company reported missing on the top and bottom line for third quarter earnings before the open Friday. Imperial is majority owned by ExxonMobil $XOM who has 69.6%.

imperial oil kearl oil sands

Imperial Oil's Kearl Oil Sands Operation

 

Earnings: Q3 EPS of C$0.44 misses by C$0.09.
Revenue of C$7.2B (-3.2% Y/Y) misses by C$990M.

Reaction: Imperial Oil Ltd (USA) NYSEAMERICAN: $IMO Oct 27, 4:00 PM EDT USD$31.91 +0.88 (+2.84%)

  • 18 percent increase in upstream production from the second quarter of 2017
  • Petroleum product sales of 500,000 barrels per day remain at near record levels
  • Returned $386 million to shareholders in the form of dividends and share purchases

 

Third quarter highlights

  • Net income of $371 million or $0.44 per-share on a diluted basis, compared to net income of $1,003 million or $1.18 per-share in the third quarter of 2016. Third quarter 2016 results included a $716 million gain from the sale of retail sites.

  • Cash generated from operating activities was $837 millionan increase of $65 million from the third quarter of 2016.

  • Capital and exploration expenditures totalled $159 milliona decrease of $46 million from the third quarter of 2016. 

  • Dividends paid and share purchases totalled $386 million in the third quarter of 2017, including the purchase of approximately 6.7 million shares at a cost of $250 million. Year-to-date, Imperial has purchased approximately 10 million shares valued at $377 million

  • Production averaged 390,000 gross oil-equivalent barrels per day, compared to 393,000 barrels per day in the same period of 2016. Improved performance at Kearl and Cold Lake were offset by the impact of the Syncrude Mildred Lake fire and the continued shutdown of Norman Wells due to the Enbridge Line 21 precautionary pipeline closure. 

  • Syncrude delivered strong results after returning to full operations in late July, following the fire at its Mildred Lake upgrader in March. The company's share of gross production averaged 74,000 barrels per day in the third quarter, compared to 85,000 barrels per day in the third quarter of 2016. 

  • Plan to achieve targeted production at Kearl progressing. Imperial continued to execute reliability improvements in its mining and ore preparation operations during planned maintenance. Mechanical enhancements applied to the expansion project in the second quarter were initiated on the initial development in the third quarter, with work continuing into the fourth quarter. Gross production of Kearl bitumen averaged 182,000 barrels per day in the quarter (129,000 barrels Imperial's share), up from 159,000 barrels per day (113,000 barrels Imperial's share) in the third quarter of 2016. Planned turnaround activity initiated late in the quarter impacted production by about 23,000 barrels per day (16,000 barrels Imperial's share).

  • Refinery throughput averaged 385,000 barrels per day, compared to 407,000 barrels in the third quarter of 2016. Refinery capacity utilization was 91 percent, compared to 97 percent in the third quarter of 2016. The quarterly throughput reflects planned maintenance activities at the Nanticoke refinery initiated in September. Excluding these planned maintenance activities, utilization was 99 percent. 

  • Petroleum product sales were 500,000 barrels per day, compared to 505,000 barrels per day in the third quarter of 2016. The near-record volumes reflect the strength of Imperial's marketing and supply strategy, to support continued customer growth.

  • Conversion of 74 Husky commercial cardlock sites to the Esso brand is well underway, as Imperial's truck transport fuel business transitions to a branded wholesaler model. As part of a previously announced agreement, Husky will operate the consolidated Esso-branded network of 156 sites, while Imperial supplies branded fuels and continues to invest in innovative marketing programs. The rebranding is expected to be complete by year-end 2017. 

  • First Mobil-branded service stations opened in Canada at existing Loblaws sites. The launch is part of a previously announced agreement with BG Fuels to convert 213 service stations nationwide to the Mobil brand and establish Imperial as the exclusive fuel supplier. Combined with the existing Esso retail network, Imperial will supply fuel to more than 2,000 branded service stations across Canada following the completion of the Mobil conversion in 2018.

About Imperial Oil

Imperial Oil Limited is Canada's second-biggest integrated oil company. ExxonMobil $XOM had a 69.6 percent ownership stake in the company as of December 31, 2012. It is a significant producer of crude oil, diluted bitumen and natural gas, Canada’s major petroleum refiner, a key petrochemical producer and a national marketer with coast-to-coast supply and retail networks. Imperial Oil has 1700 service stations with majority owned third parties and sold 497 stations in 2016.

Imperial Oil Sands

Its retail operations include Esso-brand service stations and On the Run/Marché Express and Tiger Express-brand convenience stores. It is also known for its  Imperial owns 25 percent of Syncrude, which is one of the world’s largest oil sands operations. Imperial is also in a joint venture oil sands mining operation with ExxonMobil Corp., called Kearl Oil Sands. Most of Imperial's production is from its Alberta Oil sands and the Norman Wells oil field in the Northwest Territories.

The company is headquartered in Calgary, Alberta, Imperial Oil was based in Toronto, Ontario, until 2005.

Source: Imperial Oil

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