- Earnings of $333 million, an
increase of $434 million compared to
the same period of 2016
- Strong petroleum product sales driven by long-term, high value
supply agreements
- Upstream production impacted by a fire at the Syncrude Mildred
Lake upgrader
CALGARY, April 28, 2017 /CNW/ -
|
|
First
quarter
|
(millions of Canadian
dollars, unless noted)
|
2017
|
2016
|
%
|
Net Income (loss)
(U.S. GAAP)
|
333
|
(101)
|
430
|
Net Income (loss) per
common share
|
|
|
|
|
- assuming dilution
(dollars)
|
0.39
|
(0.12)
|
430
|
Capital and
exploration expenditures
|
153
|
408
|
(63)
|
Estimated earnings in the first quarter of 2017 were
$333 million, an increase of
$434 million compared to the net loss
of $101 million in the same period of
2016. The quarterly performance reflects higher global crude prices
and a $151 million gain on the sale
of a surplus property.
"Following a year that tested the resiliency of our company and
the broader industry, our first quarter results demonstrate the
strength of our people, the quality of our assets and the value of
our integrated business model," said Rich
Kruger, chairman, president and chief executive officer. "We
are well positioned to compete throughout the business cycle."
The quarter was characterized by an emphasis on capturing
integration benefits and exercising capital and operational
expenditure discipline. The company's commitment to operational
integrity was evidenced by exceptional environmental performance,
with zero recordable spills or regulatory compliance incidents.
Imperial's Downstream business continued to deliver strong
results. Petroleum product sales increased over the comparable
period of 2016, attributable to the company's strategic focus on
securing long-term supply agreements and building valued customer
relationships. Additionally, the company launched a Speedpass+™ app
for Esso retail sites. The technology rollout makes Imperial the
first major fuels retailer in Canada to offer a mobile payment option at the
pump and will capitalize on the growing preference for a digital
customer experience.
In April, it was announced that Imperial intends to introduce
the Mobil brand in Canada through
the conversion of more than 200 existing unbranded third-party
retail sites.
"The addition of Mobil as a fuels offering in Canada establishes yet another catalyst to
expand Imperial's branded wholesaler business beyond the highly
established Esso network," added Kruger.
Imperial remains committed to its priority areas of safety,
reliability, operational integrity and profitability. The company
will continue to generate value from its high-quality assets, while
prudently pursuing new opportunities that increase shareholder
value.
First quarter highlights
- Net income of $333 million or
$0.39 per-share on a diluted
basis, an increase of $434
million compared to the net loss of $101 million or $(0.12) per-share in the first quarter of
2016.
- Production averaged 378,000 gross oil-equivalent barrels per
day, compared to 421,000 barrels per day in the same period of
2016. Production was impacted by a fire at the Syncrude Mildred
Lake upgrader in mid-March, which is expected to be restored in
phases beginning in May and continuing through June. Kearl
production of 182,000 barrels per day (129,000 barrels Imperial's
share) represented the third consecutive quarterly increase
following the Alberta wildfires in
the second quarter of 2016. The company is progressing a
comprehensive plan aimed at improving reliability to achieve
targeted production levels at Kearl.
- Refinery throughput averaged 398,000 barrels per day and
refinery capacity utilization was 94 percent, both unchanged from
the same period in 2016.
- Petroleum product sales were 486,000 barrels per day, up
from 469,000 barrels per day from the first quarter of 2016. Sales
growth was driven by the company's focus on securing long-term
supply agreements and represents the highest first quarter sales
volumes in several decades.
- Cash generated from operating activities was $354 million, an increase of $305 million from the first quarter of 2016.
- Capital and exploration expenditures totalled $153 million, a decrease of $255 million from the first quarter of 2016.
- Completed the sale of former refinery lands in Mississauga, Ontario, for private
development, resulting in an after tax earnings gain of
$151 million. The sale reflects
Imperial's commitment to responsibly release surplus properties for
redevelopment.
- Cold Lake expansion project
environmental impact assessment completed. In early March, the
Alberta Energy Regulator notified Imperial that the project's
environmental impact assessment is considered complete as part of
an ongoing regulatory review. The proposed 50,000 barrels per day
in-situ facility will use proprietary technology that is expected
to reduce greenhouse gas emissions intensity by 25 percent compared
to existing steam-assisted gravity drainage methods. No final
investment decision has been made at this time.
- Launch of the Speedpass+ app, making Imperial the first
major fuels retailer in Canada to
offer a mobile payment option at the pump. It provides a fast, easy
way to pay for fuel and car washes at Esso-branded stations,
combining customer convenience and loyalty rewards. The Speedpass+
app capitalizes on the prevalent use of smartphones among Canadians
and the increased use of mobile payment systems.
- Zero recordable environmental and regulatory compliance
incidents, representing an excellent start to 2017 and
demonstrating Imperial's commitment to operational integrity. The
company achieved best-ever safety and environmental performance in
2016.
- Donation supports youth affected by Alberta wildfires. Imperial collaborated
with the Fort McMurray Public School District and the Canadian
Mental Health Association of Wood Buffalo to fund Heart Math, a
digital tool to evaluate stress and anxiety levels. Heart Math uses
sensors to read heart rates and identify management techniques,
including breathing exercises, to help students experiencing stress
and anxiety.
- Lawren S. Harris painting
donated to the National Gallery of Canada. In recognition of Canada's 150th celebration, the
National Gallery of Canada
received five works from Imperial's corporate collection, including
Billboard (Jazz), a rare piece by the famous Group of Seven artist.
The total art donation includes 43 pieces, gifted to 15 museums and
galleries across the country, with an estimated value of
$6 million.
First quarter 2017 vs. first quarter 2016
The company's net income for the first quarter of 2017 was
$333 million or $0.39 per-share on a diluted basis, an increase
of $434 million compared to the net
loss of $101 million or $(0.12) per-share for the same period last
year.
Upstream recorded a net loss in the first quarter of
$86 million, compared to a net loss
of $448 million in the same period of
2016. Earnings in the first quarter of 2017 reflect the impact of
higher Canadian crude oil realizations of about $600 million, partially offset by higher
royalties of about $80 million, lower
volumes of about $70 million and
higher operating expenses of about $50
million primarily due to higher energy costs.
West Texas Intermediate (WTI) averaged US$51.78 per barrel in the first quarter of 2017,
up from US$33.63 per barrel in the
same quarter of 2016. Western Canada Select (WCS) averaged
US$37.26 per barrel and US$19.30 per barrel respectively for the same
periods. The WTI / WCS differential narrowed to 28 percent in the
first quarter of 2017, from 43 percent in the same period of
2016.
The Canadian dollar averaged US$0.76 in the first quarter of 2017, an increase
of US$0.03 from the first quarter of
2016.
Imperial's average Canadian dollar realizations for bitumen and
synthetic crudes increased essentially in line with the North
American benchmarks, adjusted for changes in exchange rates and
transportation costs. Bitumen realizations averaged $36.21 per barrel for the first quarter of 2017,
an increase of $24.29 per barrel
versus the first quarter of 2016. Synthetic crude realizations
averaged $67.79 per barrel, an
increase of $21.47 per barrel for the
same period of 2016.
Gross production of Cold Lake
bitumen averaged 158,000 barrels per day in the first quarter,
compared to 165,000 barrels per day in the same period last year,
mainly due to the timing of steam cycles.
Gross production of Kearl bitumen averaged 182,000 barrels per
day in the first quarter (129,000 barrels Imperial's share)
compared to 194,000 barrels per day (138,000 barrels Imperial's
share) during the first quarter of 2016. Lower production was the
result of planned and unplanned maintenance activities.
The company's share of gross production from Syncrude averaged
66,000 barrels per day, compared to 80,000 barrels per day in the
first quarter of 2016. Syncrude production was reduced by about
14,000 barrels per day mainly due to a fire at the Syncrude Mildred
Lake upgrader.
Downstream net income was $380
million in the first quarter, compared to $320 million in the same period of 2016. Earnings
increased mainly due to a gain of $151
million from the sale of a surplus property, partially
offset by lower marketing margins of approximately $60 million.
Refinery throughput averaged 398,000 barrels per day, unchanged
from the same period in 2016.
Petroleum product sales were 486,000 barrels per day, up from
469,000 barrels per day in the first quarter of 2016. Sales growth
was primarily driven by the company's focus on securing long-term
supply agreements.
Chemical net income was $45
million in the first quarter, compared to $49 million in the same quarter of 2016.
Net income effects from Corporate and Other were negative
$6 million in the first quarter,
compared to negative $22 million in
the same period of 2016.
Cash flow generated from operating activities was $354 million in the first quarter, compared with
$49 million in the corresponding
period in 2016, reflecting higher earnings.
Investing activities generated net cash of $61 million in the first quarter, compared with
$358 million used in the same period
of 2016, reflecting lower additions to property, plant and
equipment and higher proceeds from asset sales.
Cash used in financing activities was $134 million in the first quarter, compared with
cash from financing activities of $261
million in the first quarter of 2016. Dividends paid in the
first quarter of 2017 were $127
million. The per-share dividend paid in the first quarter
was $0.15, up from $0.14 in the same period of 2016.
The company's cash balance was $672
million at March 31, 2017,
versus $155 million at the end of the
first quarter of 2016.
Key financial and operating data follow.
Forward-looking statements
Statements of future events or conditions in this report,
including projections, targets, expectations, estimates, and
business plans are forward-looking statements. Actual future
financial and operating results, including demand growth and energy
source mix; production growth and mix; project plans, dates, costs
and capacities; production rates; production life and resource
recoveries; cost savings; product sales; financing sources; and
capital and environmental expenditures could differ materially
depending on a number of factors, such as changes in the supply of
and demand for crude oil, natural gas, and petroleum and
petrochemical products and resulting price and margin impacts;
limitations on transportation for accessing markets; political or
regulatory events, including changes in law or government policy;
applicable royalty rates and tax laws; the receipt, in a timely
manner, of regulatory and third-party approvals; third party
opposition to operations and projects; environmental risks inherent
in oil and gas exploration and production activities; environmental
regulation, including climate change and greenhouse gas
restrictions; currency exchange rates; availability and allocation
of capital; performance of third party service providers;
unanticipated operational disruptions; management effectiveness;
commercial negotiations; project management and schedules; response
to unexpected technological developments; operational hazards and
risks; disaster response preparedness; the ability to develop or
acquire additional reserves; and other factors discussed in this
report and Item 1A of Imperial's most recent Form 10-K.
Forward-looking statements are not guarantees of future performance
and involve a number of risks and uncertainties, some that are
similar to other oil and gas companies and some that are unique to
Imperial. Imperial's actual results may differ materially from
those expressed or implied by its forward-looking statements and
readers are cautioned not to place undue reliance on them. Imperial
undertakes no obligation to update any forward-looking statements
contained herein, except as required by applicable law.
The term "project" as used in this release can refer to a
variety of different activities and does not necessarily have the
same meaning as in any government payment transparency
reports.
IMPERIAL OIL
LIMITED
|
|
|
|
|
|
Attachment
I
|
|
|
|
Three
Months
|
millions of Canadian
dollars, unless noted
|
2017
|
2016
|
|
|
|
Net Income (loss)
(U.S. GAAP)
|
|
|
|
Total revenues and
other income
|
7,156
|
5,222
|
|
Total
expenses
|
6,736
|
5,371
|
|
Income (loss) before
income taxes
|
420
|
(149)
|
|
Income
taxes
|
87
|
(48)
|
|
Net income
(loss)
|
333
|
(101)
|
|
|
|
|
|
Net income (loss) per
common share (dollars)
|
0.39
|
(0.12)
|
|
Net income (loss) per
common share - assuming dilution (dollars)
|
0.39
|
(0.12)
|
|
|
|
|
Other Financial
Data
|
|
|
|
Gain (loss) on asset
sales, after tax
|
158
|
24
|
|
|
|
|
|
Total assets at March
31
|
41,410
|
43,185
|
|
|
|
|
|
Total debt at March
31
|
5,228
|
8,895
|
|
Interest coverage
ratio - earnings basis (times covered)
|
27.8
|
12.0
|
|
|
|
|
|
Other long-term
obligations at March 31
|
3,620
|
3,475
|
|
|
|
|
|
Shareholders' equity
at March 31
|
25,304
|
23,346
|
|
Capital employed at
March 31
|
30,551
|
32,259
|
|
Return on average
capital employed (percent) (a)
|
8.5
|
2.0
|
|
|
|
|
|
Dividends declared on
common stock
|
|
|
|
|
Total
|
127
|
119
|
|
|
Per common share
(dollars)
|
0.15
|
0.14
|
|
|
|
|
|
|
Millions of common
shares outstanding
|
|
|
|
|
At March
31
|
847.6
|
847.6
|
|
|
Average - assuming
dilution
|
850.3
|
850.4
|
|
|
|
|
|
(a)
|
Return on capital
employed is the rolling average net income excluding after-tax cost
of financing divided by the average rolling four quarters' capital
employed.
|
IMPERIAL OIL
LIMITED
|
|
|
|
Attachment
II
|
|
|
|
|
|
Three
Months
|
millions of Canadian
dollars
|
2017
|
2016
|
|
|
|
Total cash and
cash equivalents at period end
|
672
|
155
|
|
|
|
Net income
(loss)
|
333
|
(101)
|
Adjustments for
non-cash items:
|
|
|
|
Depreciation and
depletion
|
392
|
424
|
|
(Gain) loss on asset
sales
|
(182)
|
(30)
|
|
Deferred income taxes
and other
|
200
|
(82)
|
Changes in operating
assets and liabilities
|
(389)
|
(162)
|
Cash flows from
(used in) operating activities
|
354
|
49
|
|
|
|
Cash flows from
(used in) investing
activities
|
61
|
(358)
|
|
Proceeds associated
with asset sales
|
183
|
33
|
|
|
|
Cash flows from
(used in) financing activities
|
(134)
|
261
|
|
|
|
IMPERIAL OIL
LIMITED
|
|
|
|
|
|
|
|
|
Attachment
III
|
|
|
|
|
|
|
|
|
Three
Months
|
millions of Canadian
dollars
|
2017
|
2016
|
|
|
|
|
Net income (loss)
(U.S. GAAP)
|
|
|
|
Upstream
|
(86)
|
(448)
|
|
Downstream
|
380
|
320
|
|
Chemical
|
45
|
49
|
|
Corporate and
other
|
(6)
|
(22)
|
|
Net income
(loss)
|
333
|
(101)
|
|
|
|
|
Revenues and other
income
|
|
|
|
Upstream
|
2,334
|
1,478
|
|
Downstream
|
5,474
|
4,194
|
|
Chemical
|
341
|
298
|
|
Eliminations /
Other
|
(993)
|
(748)
|
|
Revenues and other
income
|
7,156
|
5,222
|
|
|
|
|
Purchases of crude
oil and products
|
|
|
|
Upstream
|
1,116
|
818
|
|
Downstream
|
4,009
|
2,757
|
|
Chemical
|
201
|
159
|
|
Eliminations
|
(993)
|
(748)
|
|
Purchases of crude
oil and products
|
4,333
|
2,986
|
|
|
|
|
Production and
manufacturing expenses
|
|
|
|
Upstream
|
973
|
909
|
|
Downstream
|
349
|
315
|
|
Chemical
|
53
|
47
|
|
Eliminations
|
-
|
-
|
|
Production and
manufacturing expenses
|
1,375
|
1,271
|
|
|
|
|
Capital and
exploration
expenditures
|
|
|
|
Upstream
|
103
|
346
|
|
Downstream
|
34
|
43
|
|
Chemical
|
4
|
6
|
|
Corporate and
other
|
12
|
13
|
|
Capital and
exploration expenditures
|
153
|
408
|
|
|
|
|
|
Exploration expenses
charged to income included above
|
22
|
17
|
|
|
|
|
IMPERIAL OIL
LIMITED
|
|
|
|
|
|
|
|
|
|
|
Attachment
IV
|
|
|
|
|
|
|
|
|
Operating
statistics
|
Three
Months
|
|
|
2017
|
2016
|
|
|
|
|
Gross crude oil
and Natural Gas Liquids (NGL) production
|
|
|
(thousands of barrels
per day)
|
|
|
|
Cold Lake
|
158
|
165
|
|
Kearl
|
129
|
138
|
|
Syncrude
|
66
|
80
|
|
Conventional
|
4
|
14
|
|
Total crude oil
production
|
357
|
397
|
|
NGLs available for
sale
|
2
|
2
|
|
Total crude oil and
NGL production
|
359
|
399
|
|
|
|
|
Gross natural gas
production (millions of cubic feet per day)
|
116
|
129
|
|
|
|
|
Gross
oil-equivalent production (a)
|
378
|
421
|
(thousands of
oil-equivalent barrels per day)
|
|
|
|
|
|
|
Net crude oil and
NGL production (thousands of barrels per day)
|
|
|
|
Cold Lake
|
127
|
145
|
|
Kearl
|
126
|
136
|
|
Syncrude
|
62
|
80
|
|
Conventional
|
3
|
13
|
|
Total crude oil
production
|
318
|
374
|
|
NGLs available for
sale
|
1
|
1
|
|
Total crude oil and
NGL production
|
319
|
375
|
|
|
|
|
Net natural gas
production (millions of cubic feet per day)
|
107
|
126
|
|
|
|
Net oil-equivalent
production (a)
|
337
|
396
|
(thousands of
oil-equivalent barrels per day)
|
|
|
|
|
|
|
Cold Lake blend
sales (thousands of barrels per day)
|
222
|
221
|
Kearl blend
sales (thousands of barrels per day)
|
170
|
179
|
NGL sales
(thousands of barrels per day)
|
6
|
5
|
|
|
|
|
Average
realizations (Canadian dollars)
|
|
|
|
Bitumen realizations
(per barrel)
|
36.21
|
11.92
|
|
Synthetic oil
realizations (per barrel)
|
67.79
|
46.32
|
|
Conventional crude
oil realizations (per barrel)
|
53.11
|
24.47
|
|
NGL realizations (per
barrel)
|
29.28
|
14.49
|
|
Natural gas
realizations (per thousand cubic feet)
|
3.29
|
2.39
|
|
|
|
|
Refinery
throughput (thousands of barrels per day)
|
398
|
398
|
Refinery capacity
utilization (percent)
|
94
|
94
|
|
|
|
|
Petroleum product
sales (thousands of barrels per day)
|
|
|
|
Gasolines
|
244
|
246
|
|
Heating, diesel and
jet fuels
|
189
|
171
|
|
Heavy fuel oils
(b)
|
19
|
17
|
|
Lube oils and other
products
|
34
|
35
|
|
Net petroleum
products sales
|
486
|
469
|
|
|
|
|
Petrochemical
sales (thousands of tonnes) (b)
|
193
|
230
|
|
|
|
|
(a)
|
Gas converted to
oil-equivalent at six million cubic feet per one thousand
barrels.
|
(b)
|
In 2017 carbon black
product sales are reported under heavy fuel oils; in 2016 they were
reported under petrochemical sales.
|
IMPERIAL OIL
LIMITED
|
|
|
|
|
|
|
|
|
|
|
|
Attachment
V
|
|
|
|
|
|
|
|
|
|
Net income (loss)
(U.S. GAAP)
|
|
Net income (loss)
per
common share -
diluted
|
|
(millions of Canadian
dollars)
|
|
(dollars)
|
|
|
|
|
2013
|
|
|
|
First
Quarter
|
798
|
|
0.94
|
Second
Quarter
|
327
|
|
0.38
|
Third
Quarter
|
647
|
|
0.76
|
Fourth
Quarter
|
1,056
|
|
1.24
|
Year
|
2,828
|
|
3.32
|
|
|
|
|
2014
|
|
|
|
First
Quarter
|
946
|
|
1.11
|
Second
Quarter
|
1,232
|
|
1.45
|
Third
Quarter
|
936
|
|
1.10
|
Fourth
Quarter
|
671
|
|
0.79
|
Year
|
3,785
|
|
4.45
|
|
|
|
|
2015
|
|
|
|
First
Quarter
|
421
|
|
0.50
|
Second
Quarter
|
120
|
|
0.14
|
Third
Quarter
|
479
|
|
0.56
|
Fourth
Quarter
|
102
|
|
0.12
|
Year
|
1,122
|
|
1.32
|
|
|
|
|
2016
|
|
|
|
First
Quarter
|
(101)
|
|
(0.12)
|
Second
Quarter
|
(181)
|
|
(0.21)
|
Third
Quarter
|
1,003
|
|
1.18
|
Fourth
Quarter
|
1,444
|
|
1.70
|
Year
|
2,165
|
|
2.55
|
|
|
|
|
2017
|
|
|
|
First
Quarter
|
333
|
|
0.39
|
|
|
|
|
After more than a century, Imperial continues
to be an industry leader in applying technology and innovation to
responsibly develop Canada's
energy resources. As Canada's
largest petroleum refiner, a major producer of crude oil and
natural gas, a key petrochemical producer and a leading fuels
marketer from coast to coast, our company remains committed to high
standards across all areas of our business.
SOURCE Imperial Oil Limited