For the three months ended March 31,
2014
CALGARY, May 1, 2014 /CNW/ -
|
|
|
|
|
|
|
|
|
First quarter |
(millions of dollars, unless noted) |
|
|
|
2014 |
|
|
2013 |
|
|
% |
|
|
|
|
|
|
|
|
|
|
|
Net income (U.S. GAAP) |
|
|
|
946 |
|
|
798 |
|
|
19 |
Net income per common share |
|
|
|
|
|
|
|
|
|
|
- assuming dilution (dollars) |
|
|
|
1.11 |
|
|
0.94 |
|
|
19 |
|
|
|
|
|
|
|
|
|
|
|
Capital and exploration expenditures |
|
|
|
1,234 |
|
|
2,976 |
|
|
(59) |
Rich Kruger, Chairman,
President and Chief Executive Officer, commented:
Imperial's strong results in the first quarter underscore the
competitiveness of our business model, which includes full value
chain integration from upstream to refining to fuels marketing and
chemicals. We focused on base business fundamentals, including
safety, operational integrity, reliability and profitability.
Execution continued on our upstream growth strategy, concentrated
on Kearl production ramp up and expansion and the Cold Lake Nabiye
project.
Earnings in the first quarter were $946
million, or $1.11 per share,
up 19 percent from the same period in 2013.
Gross production averaged 330,000 oil-equivalent barrels per
day, up 46,000 barrels versus 2013, primarily due to production
from Kearl. Kearl production averaged 70,000 barrels per day
(50,000 barrels Imperial's share) in the quarter, as progress
continued towards stabilizing production at the targeted rate of
110,000 barrels per day (78,000 barrels Imperial's share). Refinery
throughput averaged 378,000 barrels per day, up from 357,000
barrels in 2013, adjusted for the Dartmouth refinery shutdown. Our focus on
reliability resulted in refinery capacity utilization of 90
percent, up five percent compared to the first quarter of 2013. In
addition, petroleum product sales of 476,000 barrels per day were
achieved, up 12 percent versus a year ago.
First quarter capital and exploration expenditures totalled
$1,234 million. Investments were
primarily associated with upstream growth projects, most notably
the Kearl expansion and Cold Lake Nabiye projects, which were 81
and 76 percent complete, respectively, at the end of the quarter.
First quarter capital and exploration expenditures were fully
funded from available cash and cash flow from operations.
Consistent with the company's long-standing practice of
reviewing its asset portfolio, a sale agreement for several western
Canadian conventional oil and gas assets was signed. The
$855 million transaction is expected
to close in the second quarter of 2014.
Imperial unveiled a refreshed corporate brand and identity,
which reflect the company's heritage, ongoing growth and future
potential. A continued commitment to innovation, our history of
operational excellence and the highest standards are embodied in
the new identity. Our high standards will continue to drive
decisions across all areas of our business.
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 the
highest standards across all areas of our business.
First quarter highlights
- Net income totalled $946
million or $1.11 per share on
a diluted basis, up 19 percent from $798
million or $0.94 per share for
the first quarter of 2013.
- Production averaged 330,000 gross oil-equivalent barrels per
day, up 46,000 barrels versus 2013, mainly due to production
from Kearl, which started up in the second quarter of 2013.
Cold Lake volumes were down 10
percent, primarily due to the cyclic nature of steaming and
associated production, along with the impact of several unplanned
third-party power outages.
- Refinery throughput averaged 378,000 barrels per day, up
from 357,000 barrels, adjusted for the Dartmouth refinery shutdown, in the first
quarter of 2013. Refinery capacity utilization increased to 90
percent, up five percent compared to the first quarter of 2013.
- Petroleum product sales increased 50,000 barrels per day
to 476,000 barrels in the first quarter, consistent with the
company's strategy to grow sales in profitable Canadian
markets.
- Cash generated from operating activities was $1,085 million, an increase of $488 million from the first quarter of 2013,
primarily due to higher earnings and working capital effects.
- Capital and exploration expenditures of $1,234 million were primarily directed at the
Kearl expansion and Cold Lake Nabiye upstream growth projects.
Expenditures were funded from available cash and current period
cash flow from operations.
- Kearl bitumen production continued to increase,
averaging 70,000 barrels per day (50,000 barrels Imperial's share)
during the quarter, up from 52,000 barrels (37,000 barrels
Imperial's share) during the fourth quarter of 2013. Progress
continued towards stabilizing production at the targeted rate of
110,000 barrels per day (78,000 barrels Imperial's share). Kearl
production has been successfully marketed and processed at more
than 20 refineries to date.
- Kearl expansion project progressed well and was 81
percent complete at the end of the quarter. The project is tracking
ahead of schedule, relative to its originally planned late 2015
startup. It is expected to ultimately produce 110,000 barrels per
day gross (78,000 barrels Imperial's share).
- Cold Lake Nabiye project progress improved. The project
was 76 percent complete at the end of the quarter as steps were
successfully taken to improve contractor productivity and mitigate
harsh winter conditions. Target startup remains year-end 2014 with
ultimate production of 40,000 barrels per day.
- Market access continued to expand. Additional steps
were taken to maximize the value of equity production and lower
refinery feedstock costs by accessing advantaged crudes. With
existing pipeline optimizations and expanded rail offloading
capabilities, our refineries are now able to fully process
price-advantaged mid-continent crudes. In addition, construction of
the Edmonton rail loading
terminal, which will enhance crude market access, progressed as
planned.
- Conventional oil and gas assets sale agreement executed.
On March 17, Imperial announced it
reached an agreement to sell its interest in western Canadian
assets located in Boundary Lake, Cynthia/West Pembina, and
Rocky Mountain House to Whitecap
Resources Inc. for approximately $855
million. The transaction is expected to close in the second
quarter of 2014.
- Corporate brand and identity refreshed. The new identity
builds on the company's heritage with a dynamic representation of
the former three-star design, symbolizing high standards and
integrity as well as its forward momentum and bright future.
Premium fuel and lubricant products will continue to be marketed to
customers nationwide under the Esso and Mobil 1 brands.
First quarter 2014 vs. first quarter 2013
The company's net income for the first quarter of 2014 was
$946 million or $1.11 per share on a diluted basis, compared with
$798 million or $0.94 per share for the same period last
year.
Upstream net income in the first quarter was $452 million, $152
million higher than the same period of 2013. Earnings
increased primarily due to higher liquids realizations of about
$200 million, along with the impact
of Kearl production and higher Syncrude volumes totalling
$90 million. Earnings were also
higher by about $85 million due to
the impact of a weaker Canadian dollar. These factors were
partially offset by higher royalty costs of about $115 million, lower Cold Lake volumes of about $65 million and higher energy costs of about
$40 million.
The company's average realizations from the sales of synthetic
crude oil increased 11 percent in the first quarter of 2014 versus
the first quarter of 2013. The increased realizations
reflected increases in West Texas Intermediate (WTI) crude oil
benchmark price, which was up about five percent, and the impact of
a weaker Canadian dollar. The company's average bitumen
realizations in Canadian dollars in the first quarter were
$65.19 per barrel versus $43.63 per barrel in the first quarter of 2013 as
the price spread between light crude oil and bitumen narrowed. The
company's average realizations on natural gas sales of $6.56 per thousand cubic feet in the first
quarter of 2014 were higher by $3.06
per thousand cubic feet versus the same period in 2013.
Gross production of Cold Lake
bitumen averaged 147,000 barrels per day, down from 164,000 barrels
from the same period last year. Lower volumes were primarily due to
the cyclic nature of steaming and associated production, along with
the impact of several unplanned third-party power outages.
The company's share of Syncrude's gross production in the first
quarter was 73,000 barrels per day, up from 65,000 barrels in the
first quarter of 2013. Increased production was the result of
improved reliability.
Gross production from the Kearl initial development was 70,000
barrels per day (50,000 barrels Imperial's share). Production
continued to ramp up during the quarter as progress was made
towards stabilizing production at the targeted rate of 110,000
barrels per day (78,000 barrels Imperial's share).
Gross production of conventional crude oil averaged 22,000
barrels per day in the first quarter, versus 20,000 barrels in the
corresponding period in 2013.
Gross production of natural gas during the first quarter of 2014
was 205 million cubic feet per day, up from 187 million cubic feet
in the same period last year, reflecting contributions from the
Celtic (XTO Energy Canada) acquisition completed in the first
quarter of 2013.
Downstream net income was $488
million in the first quarter compared to $478 million in the first quarter of 2013.
Increased earnings were primarily due to improved reliability in
the first quarter of 2014 partially offset by lower industry
refining margins.
Chemical net income was $43
million in the first quarter, up from $35 million in the same quarter in 2013. Higher
margins across all major product lines contributed to the
increase.
Net income effects from Corporate and Other were negative
$37 million in the first quarter,
versus negative $15 million in the
same period of 2013, primarily due to changes in share-based
compensation charges.
Cash flow generated from operating activities was $1,085 million in the first quarter, versus
$597 million in the corresponding
period in 2013. Higher cash flow was primarily due to higher
earnings and working capital effects.
Investing activities used net cash of $1,143 million in the first quarter, compared
with $2,935 million in the same
period of 2013 (which included $1,602
million for the Celtic acquisition). Additions to property,
plant and equipment were $1,206
million in the first quarter, compared with $1,345 million during the same quarter in 2013.
Expenditures during the quarter were primarily directed towards the
advancement of Kearl expansion and Cold Lake Nabiye projects.
Cash used in financing activities was $112 million in the first quarter, compared with
cash from financing activities of $2,179
million in the first quarter of 2013. Dividends paid in the
first quarter of 2014 were $110
million, $8 million higher
than the corresponding period in 2013. Per-share dividend paid in
the first quarter was $0.13, up from
$0.12 in the same period of 2013.
The above factors led to a decrease in the company's balance of
cash to $102 million at March 31, 2014, from $272
million at the end of 2013.
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
results, including demand growth and energy source mix; production
growth and mix; project plans, dates, costs and capacities;
production rates 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 price, supply of and demand for
crude oil, natural gas, and petroleum and petrochemical products;
political or regulatory events; project schedules; commercial
negotiations; the receipt, in a timely manner, of regulatory and
third-party approvals; unanticipated operational disruptions;
unexpected technological developments; 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.
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.
|
|
|
|
Attachment
I |
|
|
|
|
|
|
|
|
IMPERIAL OIL LIMITED |
|
|
|
|
|
|
FIRST QUARTER 2014 |
|
|
|
|
|
|
|
|
|
Three Months |
millions of Canadian dollars, unless noted |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
Net Income (U.S. GAAP) |
|
|
|
|
|
Total revenues and other income |
|
|
9,226 |
|
8,014 |
Total expenses |
|
|
7,966 |
|
6,944 |
Income before income taxes |
|
|
1,260 |
|
1,070 |
Income taxes |
|
|
314 |
|
272 |
Net income |
|
|
946 |
|
798 |
|
|
|
|
|
|
|
Net income per common
share (dollars) |
|
|
1.12 |
|
0.94 |
Net income per common
share - assuming dilution (dollars) |
|
|
1.11 |
|
0.94 |
|
|
|
|
|
|
|
Other Financial Data |
|
|
|
|
|
Federal excise tax
included in operating revenues |
|
|
370 |
|
326 |
|
|
|
|
|
|
|
Gain/(loss) on asset
sales, after tax |
|
|
16 |
|
3 |
|
|
|
|
|
|
|
Total assets at March
31 |
|
|
38,745 |
|
33,119 |
|
|
|
|
|
|
|
Total debt at March
31 |
|
|
6,285 |
|
3,928 |
Interest coverage
ratio - earnings basis |
|
|
|
|
|
(times
covered) |
|
|
49.8 |
|
175.5 |
|
|
|
|
|
|
|
Other long-term
obligations at March 31 |
|
|
3,114 |
|
4,104 |
|
|
|
|
|
|
|
Shareholders' equity at March 31 |
|
|
|
20,361 |
|
17,023 |
Capital employed at March 31 |
|
|
|
26,669 |
|
20,973 |
Return on average capital
employed (a) |
|
|
|
|
|
(percent) |
|
|
12.0 |
|
19.7 |
|
|
|
|
|
|
|
Dividends declared on
common stock |
|
|
|
|
|
Total |
|
|
110 |
|
102 |
Per common
share (dollars) |
|
|
0.13 |
|
0.12 |
|
|
|
|
|
|
|
Millions of common shares
outstanding |
|
|
|
|
|
At March 31 |
|
|
|
847.6 |
|
847.6 |
Average -
assuming dilution |
|
|
850.5 |
|
850.6 |
|
|
|
|
|
|
|
(a) |
Return on capital employed is net income excluding
after-tax cost of financing divided by the average rolling four
quarters' capital employed. |
|
|
|
|
Attachment II |
|
|
|
|
|
|
|
IMPERIAL OIL LIMITED |
FIRST QUARTER 2014 |
|
|
|
|
|
|
|
|
|
|
|
Three Months |
millions of Canadian dollars |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
Total cash and cash equivalents at period
end |
|
|
102 |
|
323 |
|
|
|
|
|
|
|
Net income |
|
|
946 |
|
798 |
Adjustments for non-cash items: |
|
|
|
|
|
|
Depreciation and depletion |
|
|
280 |
|
185 |
|
(Gain)/loss on asset sales |
|
|
(20) |
|
(4) |
|
Deferred income taxes and other |
|
|
5 |
|
29 |
Changes in operating assets and liabilities |
|
|
(126) |
|
(411) |
Cash flows from (used in) operating
activities |
|
|
1085 |
|
597 |
|
|
|
|
|
|
|
Cash flows from (used in) investing
activities |
|
|
(1,143) |
|
(2,935) |
|
Proceeds associated with asset sales |
|
|
75 |
|
8 |
|
|
|
|
|
|
|
Cash flows from (used in) financing
activities |
|
|
(112) |
|
2,179 |
|
|
|
|
|
|
|
|
|
|
|
Attachment III |
|
|
|
|
|
|
|
IMPERIAL OIL LIMITED |
FIRST QUARTER 2014 |
|
|
|
|
|
|
|
|
|
|
|
Three Months |
millions of Canadian dollars |
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
Net income (U.S. GAAP) |
|
|
|
|
|
|
Upstream |
|
|
452 |
|
300 |
|
Downstream |
|
|
488 |
|
478 |
|
Chemical |
|
|
43 |
|
35 |
|
Corporate and other |
|
|
(37) |
|
(15) |
|
Net income |
|
|
946 |
|
798 |
|
|
|
|
|
|
|
Revenues and other income |
|
|
|
|
|
|
Upstream |
|
|
3,278 |
|
2,154 |
|
Downstream |
|
|
7,088 |
|
7,242 |
|
Chemical |
|
|
458 |
|
380 |
|
Eliminations/Other |
|
|
(1,598) |
|
(1,762) |
|
Total |
|
|
9,226 |
|
8,014 |
|
|
|
|
|
|
|
Purchases of crude oil and
products |
|
|
|
|
|
|
Upstream |
|
|
1,405 |
|
857 |
|
Downstream |
|
|
5,416 |
|
5,620 |
|
Chemical |
|
|
319 |
|
260 |
|
Eliminations |
|
|
(1,598) |
|
(1,762) |
|
Purchases of crude oil and products |
|
|
5,542 |
|
4,975 |
|
|
|
|
|
|
|
Production and manufacturing expenses |
|
|
|
|
|
|
Upstream |
|
|
1,029 |
|
747 |
|
Downstream |
|
|
386 |
|
382 |
|
Chemical |
|
|
61 |
|
53 |
|
Eliminations |
|
|
- |
|
(1) |
|
Production and manufacturing expenses |
|
|
1,476 |
|
1,181 |
|
|
|
|
|
|
|
Capital and exploration expenditures |
|
|
|
|
|
|
Upstream |
|
|
1,163 |
|
2,938 |
|
Downstream |
|
|
48 |
|
27 |
|
Chemical |
|
|
2 |
|
1 |
|
Corporate and other |
|
|
21 |
|
10 |
|
Capital and exploration expenditures |
|
|
1,234 |
|
2,976 |
|
|
|
|
|
|
|
|
Exploration expenses charged to income included above |
|
|
21 |
|
23 |
|
|
|
|
|
|
|
|
|
|
|
Attachment IV |
|
|
|
|
|
|
|
IMPERIAL OIL LIMITED |
FIRST QUARTER 2014 |
Operating statistics |
|
|
Three Months |
|
|
|
|
2014 |
|
2013 |
|
|
|
|
|
|
|
Gross crude oil and Natural Gas Liquids (NGL)
production |
|
|
|
|
|
(thousands of barrels per day) |
|
|
|
|
|
Cold Lake |
|
|
147 |
|
164 |
Syncrude |
|
|
73 |
|
65 |
Kearl |
|
|
50 |
|
- |
Conventional |
|
|
22 |
|
20 |
Total crude oil production |
|
|
292 |
|
249 |
NGLs available for sale |
|
|
4 |
|
4 |
Total crude oil and NGL production |
|
|
296 |
|
253 |
|
|
|
|
|
|
|
Gross natural gas production (millions of cubic
feet per day) |
|
|
205 |
|
187 |
|
|
|
|
|
|
|
Gross oil-equivalent production (a) |
|
|
|
|
|
(thousands of oil-equivalent barrels per day) |
|
|
330 |
|
284 |
|
|
|
|
|
|
|
Net crude oil and NGL production (thousands of
barrels per day) |
|
|
|
|
Cold Lake |
|
|
113 |
|
139 |
Syncrude |
|
|
69 |
|
63 |
Kearl |
|
|
47 |
|
- |
Conventional |
|
|
18 |
|
15 |
Total crude oil production |
|
|
247 |
|
217 |
NGLs available for sale |
|
|
3 |
|
3 |
Total crude oil and NGL production |
|
|
250 |
|
220 |
|
|
|
|
|
|
|
Net natural gas production (millions of cubic
feet per day) |
|
|
182 |
|
180 |
|
|
|
|
|
|
|
Net oil-equivalent production (a) |
|
|
|
|
|
(thousands of oil-equivalent barrels per day) |
|
|
281 |
|
250 |
|
|
|
|
|
|
|
Cold Lake blend sales (thousands of barrels
per day) |
|
|
197 |
|
215 |
Kearl blend sales (thousands of barrels per
day) |
|
|
60 |
|
- |
NGL sales (thousands of barrels per
day) |
|
|
|
10 |
|
6 |
Natural gas sales (millions of cubic feet
per day) |
|
|
|
173 |
|
150 |
|
|
|
|
|
|
|
Average realizations (Canadian dollars) |
|
|
|
|
|
Conventional crude oil realizations (per
barrel) |
|
|
71.69 |
|
73.52 |
NGL realizations (per barrel) |
|
|
66.28 |
|
36.53 |
Natural gas realizations (per thousand cubic
feet) |
|
|
6.56 |
|
3.50 |
Synthetic oil realizations (per barrel) |
|
|
106.50 |
|
95.63 |
Bitumen realizations (per barrel) |
|
|
65.19 |
|
43.63 |
|
|
|
|
|
|
|
Refinery throughput (thousands of barrels
per day) |
|
|
378 |
|
430 |
Adjusted refinery throughput (b) (thousands
of barrels per day) |
|
|
378 |
|
357 |
Refinery capacity utilization (c)
(percent) |
|
|
90 |
|
85 |
|
|
|
|
|
|
|
Petroleum product sales (thousands of
barrels per day) |
|
|
|
|
|
Gasolines (Mogas) |
|
|
232 |
|
207 |
Heating, diesel and jet fuels
(Distillates) |
|
|
190 |
|
160 |
Heavy fuel oils (HFO) |
|
|
20 |
|
28 |
Lube oils and other products (Other) |
|
|
34 |
|
31 |
Net petroleum products sales |
|
|
476 |
|
426 |
|
|
|
|
|
|
|
Petrochemical sales (thousands of
tonnes) |
|
|
230 |
|
240 |
(a) |
Gas converted to oil-equivalent at 6 million cubic
feet = 1 thousand barrels |
|
|
|
|
|
|
(b) |
Refinery operations at the Dartmouth
refinery were discontinued on September 16, 2013. Refinery
throughput in the first quarter of 2013 was adjusted to exclude
volumes processed at the Dartmouth refinery to facilitate
comparison with the first quarter of 2014. |
(c) Capacity utilization
is calculated based on the number of days the refineries were
operated as a refinery. |
|
|
|
|
|
|
|
|
|
Attachment V |
|
|
|
|
|
|
|
|
|
|
IMPERIAL OIL LIMITED |
FIRST QUARTER 2014 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
|
Net income (U.S. GAAP) |
|
|
|
per common share |
|
|
|
(millions of Canadian dollars) |
|
|
|
(dollars) |
|
|
|
|
|
|
|
|
|
|
2010 |
|
|
|
|
|
|
|
|
First Quarter |
|
476 |
|
|
|
|
|
0.56 |
Second Quarter |
|
517 |
|
|
|
|
|
0.61 |
Third Quarter |
|
418 |
|
|
|
|
|
0.49 |
Fourth Quarter |
|
799 |
|
|
|
|
|
0.95 |
Year |
|
2,210 |
|
|
|
|
|
2.61 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 |
|
|
|
|
|
|
|
|
First Quarter |
|
781 |
|
|
|
|
|
0.92 |
Second Quarter |
|
726 |
|
|
|
|
|
0.86 |
Third Quarter |
|
859 |
|
|
|
|
|
1.01 |
Fourth Quarter |
|
1,005 |
|
|
|
|
|
1.19 |
Year |
|
3,371 |
|
|
|
|
|
3.98 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012 |
|
|
|
|
|
|
|
|
First Quarter |
|
1,015 |
|
|
|
|
|
1.20 |
Second Quarter |
|
635 |
|
|
|
|
|
0.75 |
Third Quarter |
|
1,040 |
|
|
|
|
|
1.22 |
Fourth Quarter |
|
1,076 |
|
|
|
|
|
1.27 |
Year |
|
3,766 |
|
|
|
|
|
4.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2013 |
|
|
|
|
|
|
|
|
First Quarter |
|
798 |
|
|
|
|
|
0.94 |
Second Quarter |
|
327 |
|
|
|
|
|
0.39 |
Third Quarter |
|
647 |
|
|
|
|
|
0.76 |
Fourth Quarter |
|
1,056 |
|
|
|
|
|
1.25 |
Year |
|
2,828 |
|
|
|
|
|
3.34 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2014 |
|
|
|
|
|
|
|
|
First Quarter |
|
946 |
|
|
|
|
|
1.12 |
SOURCE Imperial Oil Limited