- Quarterly net income of $675 million and cash flow from
operating activities of $885 million
- Successful completion of planned turnaround activities at
Kearl, Syncrude and Strathcona refinery
- Upstream production of 363,000 gross oil-equivalent barrels per
day
- Refinery throughput of 388,000 barrels per day and capacity
utilization of 90%
- Commenced facility construction on the Strathcona Renewable
Diesel project
- Renewed annual normal course issuer bid (NCIB) to repurchase up
to 5% of outstanding common shares, with plans to accelerate
completion of the program prior to year end
- Declared third quarter dividend of 50 cents per share
IMPERIAL OIL LIMITED, TSE: IMO, NYSE American: IMO
Second quarter
Six months
millions of Canadian dollars, unless
noted
2023
2022
∆
2023
2022
∆
Net income (loss) (U.S. GAAP)
675
2,409
(1,734)
1,923
3,582
(1,659)
Net income (loss) per common share,
assuming dilution (dollars)
1.15
3.63
(2.48)
3.29
5.36
(2.07)
Capital and exploration expenditures
493
314
+179
922
610
+312
Imperial reported estimated net income in the second quarter of
$675 million, compared to net income of $1,248 million in the first
quarter of 2023, driven by lower refining margins and planned
turnaround activity. Quarterly cash flow from operating activities
was $885 million, up from $821 million used in the first quarter of
2023.
“Imperial’s results in the second quarter reflect the safe and
on-plan execution of significant turnaround activity across our
Upstream and Downstream business lines,” said Brad Corson,
Imperial's chairman, president and chief executive officer. “With
substantial turnaround activity now behind us, we anticipate strong
production in the second half of 2023."
Upstream production in the second quarter averaged 363,000 gross
oil-equivalent barrels per day. At Kearl, quarterly total gross
production averaged 217,000 barrels per day (154,000 barrels
Imperial's share), primarily impacted by planned turnaround
activity. In April, Kearl took delivery of its first-ever shipment
of renewable diesel for use in its mine fleet as part of the
company’s ongoing efforts to reduce emissions and demonstrate
suitability for use in heavy equipment applications. At Cold Lake,
quarterly gross production averaged 132,000 barrels per day,
impacted by the timing of production and steam cycles. At Syncrude,
the company's share of quarterly production averaged 66,000 gross
barrels per day, primarily impacted by its annual coker
turnaround.
In the Downstream, throughput in the quarter averaged 388,000
barrels per day with refinery capacity utilization of 90 percent,
reflecting the impact of the planned turnaround at the Strathcona
refinery. Petroleum product sales in the quarter were 475,000
barrels per day. In May, the Strathcona Renewable Diesel project
passed a significant milestone with key contractors being mobilized
to site to commence facility construction work.
“We support Canada’s vision for a lower-emission future, and I
am encouraged to see the work now underway to build Canada’s
largest renewable diesel facility,” said Corson. “The project
remains on track for a 2025 start-up and is expected to produce
more than 1 billion litres of renewable diesel annually to help
meet strong demand under Canada's Clean Fuel Regulations and reduce
reliance on costly imports,” said Corson.
During the quarter, Imperial returned $257 million to
shareholders through dividend payments and declared a third quarter
dividend of 50 cents per share. In June, Imperial renewed its
annual normal course issuer bid program, allowing the company to
repurchase up to five percent of its outstanding common shares over
a 12-month period ending June 28, 2024.
“Imperial continues to demonstrate its long-standing commitment
to returning surplus cash to shareholders and I am pleased to
announce our plan to accelerate our NCIB share repurchases with a
target of completing the program prior to year end,” said
Corson.
Second quarter highlights
- Net income of $675 million or $1.15 per share on a diluted
basis, compared to $2,409 million or $3.63 per share in the
second quarter of 2022. Lower net income is primarily driven by
lower commodity prices and increased planned turnaround
activity.
- Cash flows from operating activities of $885 million,
compared to cash flows from operating activities of $2,682 million
in the same period of 2022. Cash flows from operating activities
excluding working capital1 of $1,136 million, compared to $2,783
million in the same period of 2022.
- Capital and exploration expenditures totalled $493
million, up from $314 million in the second quarter of
2022.
- The company returned $257 million to shareholders in the
second quarter of 2023 through dividends paid.
- Renewed share repurchase program, enabling the purchase
of up to five percent of common shares outstanding, a maximum of
29,207,635 shares, during the 12-month period ending June 28, 2024.
Imperial plans to accelerate its share purchases under the NCIB
program and anticipates repurchasing all remaining allowable shares
prior to year end. Purchase plans may be modified at any time
without prior notice.
- Production averaged 363,000 gross oil-equivalent barrels per
day, compared to 413,000 gross oil-equivalent barrels per day
in the same period of 2022. Lower production is primarily driven by
the timing of planned turnaround activity at Syncrude, production
and steam cycle timing at Cold Lake and the absence of
unconventional volumes following the sale of XTO Energy Canada in
the third quarter of 2022.
- Total gross bitumen production at Kearl averaged 217,000
barrels per day (154,000 barrels Imperial's share), compared to
224,000 barrels per day (159,000 barrels Imperial's share) in the
second quarter of 2022.
- Completed construction work on key mitigation efforts to
expand the existing seepage interception system at Kearl.
Additional monitoring and assessment work will occur in the coming
months. Imperial continues to engage with local Indigenous
communities, and is providing site tours and access for independent
testing. To date, there is no indication of adverse impacts to
wildlife or fish populations in nearby river systems, or risks to
drinking water for local communities.
- First-ever delivery of renewable diesel to Kearl for use in
mine fleet as part of the company's ongoing effort to reduce
emissions and demonstrate suitability for use in heavy equipment
applications.
- Gross bitumen production at Cold Lake averaged 132,000
barrels per day, compared to 144,000 barrels per day in the
second quarter of 2022. Lower production was primarily due to
timing of production and steam cycles.
- Finished drilling and completion of all wells and received
final unit module for the Cold Lake Grand Rapids phase 1 (GRP1)
project. GRP1 will be the first solvent-assisted SAGD project
in industry and is expected to reduce greenhouse gas emissions
intensity by up to 40% compared to existing cyclic steam
stimulation technology. The project remains on track to achieve
accelerated start-up with steam injection anticipated by year end
2023.
- The company's share of gross production from Syncrude
averaged 66,000 barrels per day, compared to 81,000 barrels per
day in the second quarter of 2022, primarily driven by timing of
planned turnaround activity.
- Refinery throughput averaged 388,000 barrels per day,
compared to 412,000 barrels per day in the second quarter of 2022.
Capacity utilization was 90 percent, compared to 96 percent in the
second quarter of 2022, reflecting the impact of the planned
Strathcona turnaround in the quarter.
- Started facility construction of the Strathcona Renewable
Diesel project, with key contractors mobilizing to site. The
project is designed to produce more than one billion litres of
renewable diesel annually, primarily from locally sourced
feedstocks, and could help reduce greenhouse gas emissions by about
3 million metric tonnes per year, as determined in accordance with
Canada's Clean Fuel Regulations. Renewable diesel production
expected to start in early 2025.
- Petroleum product sales were 475,000 barrels per day,
compared to 480,000 barrels per day in the second quarter of
2022.
- Chemical net income of $71 million in the quarter, up
from $53 million in the second quarter of 2022.
- Early work continues on the foundational carbon storage hub
project for the Pathways Alliance, which is now working to
obtain a carbon sequestration agreement from the Government of
Alberta. Engineering and field work is underway to support a
regulatory application later this year. Imperial is a founding
member of the alliance, which continues to work collaboratively
with both the Federal and Alberta governments on the policy and
co-financing frameworks necessary to move the project forward.
____________________________ [1] non-GAAP
financial measure - see attachment VI for definition and
reconciliation
Recent business environment
During the first half of 2023, the price of crude oil decreased
as the global oil market saw higher inventory levels. In addition,
the Canadian WTI/WCS spread continued to recover in the second
quarter, but remains weaker than the first half of 2022. Refining
margins declined on steady supply of diesel.
Operating results Second quarter 2023 vs.
second quarter 2022
Second Quarter
millions of Canadian dollars, unless
noted
2023
2022
Net income (loss) (U.S. GAAP)
675
2,409
Net income (loss) per common share,
assuming dilution (dollars)
1.15
3.63
Upstream Net income (loss) factor analysis
millions of Canadian dollars
2022
Price
Volumes
Royalty
Other
2023
1,346
(1,340)
(300)
420
258
384
Price – Lower bitumen realizations were primarily driven by
lower marker prices and the widening WTI/WCS spread. Average
bitumen realizations decreased by $43.63 per barrel, generally in
line with WCS, and synthetic crude oil realizations decreased by
$43.75 per barrel, generally in line with WTI.
Volumes – Lower volumes were primarily driven by the timing of
planned turnaround activities at Syncrude, and production and steam
cycle timing at Cold Lake.
Royalty – Lower royalties were primarily driven by weakened
commodity prices.
Other – Includes favourable foreign exchange impacts of about
$180 million, and lower operating expenses of about $130 million,
resulting primarily from lower energy prices.
Marker prices and average realizations
Second Quarter
Canadian dollars, unless noted
2023
2022
West Texas Intermediate (US$ per
barrel)
73.56
108.52
Western Canada Select (US$ per barrel)
58.49
95.80
WTI/WCS Spread (US$ per barrel)
15.07
12.72
Bitumen (per barrel)
68.64
112.27
Synthetic crude oil (per barrel)
100.92
144.67
Average foreign exchange rate (US$)
0.74
0.78
Production
Second Quarter
thousands of barrels per day
2023
2022
Kearl (Imperial's share)
154
159
Cold Lake
132
144
Syncrude (a)
66
81
Kearl total gross production (thousands of
barrels per day)
217
224
(a)
In the second quarter of 2023, Syncrude gross production included
about 0 thousand barrels per day of bitumen and other products
(2022 - 2 thousand barrels per day) that were exported to the
operator's facilities using an existing interconnect pipeline.
Lower production at Cold Lake was primarily driven by timing of
production and steam cycles.
Lower production at Syncrude was primarily driven by the timing
of the annual coker turnaround.
Downstream Net income (loss) factor analysis
millions of Canadian dollars
2022
Margins
Other
2023
1,033
(730)
(53)
250
Margins – Lower margins primarily reflect weaker market
conditions.
Other – Includes higher turnaround impacts of about $230
million, reflecting the planned turnaround activities at Strathcona
refinery, partially offset by favourable foreign exchange impacts
of about $110 million.
Refinery utilization and petroleum product sales
Second Quarter
thousands of barrels per day, unless
noted
2023
2022
Refinery throughput
388
412
Refinery capacity utilization
(percent)
90
96
Petroleum product sales
475
480
Lower refinery throughput in the second quarter of 2023 reflects
the impact of planned turnaround activities at the Strathcona
refinery.
Chemicals Net income (loss) factor analysis
millions of Canadian dollars
2022
Margins
Other
2023
53
—
18
71
Corporate and other
Second Quarter
millions of Canadian dollars
2023
2022
Net income (loss) (U.S. GAAP)
(30)
(23)
Liquidity and capital resources
Second Quarter
millions of Canadian dollars
2023
2022
Cash flow generated from (used in):
Operating activities
885
2,682
Investing activities
(489)
(230)
Financing activities
(263)
(2,734)
Increase (decrease) in cash and cash
equivalents
133
(282)
Cash and cash equivalents at period
end
2,376
2,867
Cash flow generated from operating activities primarily reflects
lower Upstream realizations and Downstream margins.
Cash flow used in investing activities primarily reflects higher
additions to property, plant and equipment, and lower proceeds from
asset sales.
Cash flow used in financing activities primarily reflects:
Second Quarter
millions of Canadian dollars, unless
noted
2023
2022
Dividends paid
257
228
Per share dividend paid (dollars)
0.44
0.34
Share repurchases (a)
—
2,500
Number of shares purchased (millions)
(a)
—
32.5
(a)
The company did not purchase shares during
the second quarter of 2023. In the second quarter of 2022, share
repurchases were made under the company's substantial issuer bid
that commenced on May 6, 2022 and expired on June 10, 2022, and
included shares purchased from Exxon Mobil Corporation by way of a
proportionate tender to maintain its ownership percentage at
approximately 69.6 percent.
On June 27, 2023, the company announced by news release that it
had received final approval from the Toronto Stock Exchange for a
new normal course issuer bid and will continue its existing share
purchase program. The program enables the company to purchase up to
a maximum of 29,207,635 common shares during the period June 29,
2023 to June 28, 2024. This maximum includes shares purchased under
the normal course issuer bid and from Exxon Mobil Corporation
concurrent with, but outside of, the normal course issuer bid. As
in the past, Exxon Mobil Corporation has advised the company that
it intends to participate to maintain its ownership percentage at
approximately 69.6 percent. The program will end should the company
purchase the maximum allowable number of shares or on June 28,
2024. Imperial plans to accelerate its share purchases under the
normal course issuer bid program, and anticipates repurchasing all
remaining allowable shares prior to year end. Purchase plans may be
modified at any time without prior notice.
Six months 2023 vs. six months 2022
Six Months
millions of Canadian dollars, unless
noted
2023
2022
Net income (loss) (U.S. GAAP)
1,923
3,582
Net income (loss) per common share,
assuming dilution (dollars)
3.29
5.36
Upstream Net income (loss) factor analysis
millions of Canadian dollars
2022
Price
Volumes
Royalty
Other
2023
2,128
(2,340)
(170)
650
446
714
Price – Lower bitumen realizations were primarily driven by
lower marker prices and the widening WTI/WCS spread. Average
bitumen realizations decreased by $42.59 per barrel, generally in
line with WCS, and synthetic crude oil realizations decreased by
$29.68 per barrel, generally in line with WTI.
Volumes – Lower volumes were primarily driven by the timing of
planned turnaround activities at Syncrude, and production and steam
cycle timing at Cold Lake, partially offset by the absence of
extreme cold weather and reduced unplanned downtime at Kearl.
Royalty – Lower royalties were primarily driven by weakened
commodity prices.
Other – Includes favourable foreign exchange impacts of about
$330 million, and lower operating expenses of about $50
million.
Marker prices and average realizations
Six Months
Canadian dollars, unless noted
2023
2022
West Texas Intermediate (US$ per
barrel)
74.77
101.77
Western Canada Select (US$ per barrel)
54.92
88.13
WTI/WCS Spread (US$ per barrel)
19.85
13.64
Bitumen (per barrel)
58.94
101.53
Synthetic crude oil (per barrel)
101.73
131.41
Average foreign exchange rate (US$)
0.74
0.79
Production
Six Months
thousands of barrels per day
2023
2022
Kearl (Imperial's share)
169
146
Cold Lake
137
142
Syncrude (a)
71
79
Kearl total gross production (thousands of
barrels per day)
238
205
(a)
In 2023, Syncrude gross production
included about 1 thousand barrels per day of bitumen and other
products (2022 - 2 thousand barrels per day) that were exported to
the operator's facilities using an existing interconnect
pipeline.
Higher production at Kearl was primarily driven by the absence
of extreme cold weather, and reduced unplanned downtime as a result
of the successful rollout of the winterization strategy.
Downstream Net income (loss) factor analysis
millions of Canadian dollars
2022
Margins
Other
2023
1,422
(350)
48
1,120
Margins – Lower margins primarily reflect weaker market
conditions.
Other – Favourable foreign exchange impacts of about $190
million and improved volumes of about $110 million, partially
offset by higher turnaround impacts of about $250 million,
reflecting the planned turnaround activities at Strathcona
refinery.
Refinery utilization and petroleum product sales
Six Months
thousands of barrels per day, unless
noted
2023
2022
Refinery throughput
403
406
Refinery capacity utilization
(percent)
93
95
Petroleum product sales
465
464
Lower refinery throughput in 2023 reflects the impact of planned
turnaround activities at the Strathcona refinery.
Chemicals Net income (loss) factor analysis
millions of Canadian dollars
2022
Margins
Other
2023
109
10
5
124
Corporate and other
Six Months
millions of Canadian dollars
2023
2022
Net income (loss) (U.S. GAAP)
(35)
(77)
Liquidity and capital resources
Six Months
millions of Canadian dollars
2023
2022
Cash flow generated from (used in):
Operating activities
64
4,596
Investing activities
(903)
(509)
Financing activities
(534)
(3,373)
Increase (decrease) in cash and cash
equivalents
(1,373)
714
Cash flow generated from operating activities primarily reflects
unfavourable working capital impacts, including an income tax
catch-up payment of $2.1 billion, as well as lower Upstream
realizations and Downstream margins.
Cash flow used in investing activities primarily reflects higher
additions to property, plant and equipment, and lower proceeds from
asset sales.
Cash flow used in financing activities primarily reflects:
Six Months
millions of Canadian dollars, unless
noted
2023
2022
Dividends paid
523
413
Per share dividend paid (dollars)
0.88
0.61
Share repurchases (a)
—
2,949
Number of shares purchased (millions)
(a)
—
41.4
(a)
The company did not purchase shares during
the six months ended June 30, 2023. In the six months ended June
30, 2022, share repurchases were made under the company's normal
course issuer bid program and substantial issuer bid that commenced
on May 6, 2022 and expired on June 10, 2022. Includes shares
purchased from Exxon Mobil Corporation concurrent with, but outside
of, the normal course issuer bid, and by way of a proportionate
tender under the company's substantial issuer bid.
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. Similarly,
discussion of emission-reduction future plans to drive towards
net-zero emissions are dependent on future market factors, such as
continued technological progress and policy support, and represent
forward-looking statements. Forward-looking statements can be
identified by words such as believe, anticipate, intend, propose,
plan, goal, seek, estimate, expect, future, continue, likely, may,
should, will and similar references to future periods.
Forward-looking statements in this report include, but are not
limited to, references to the company’s long-standing commitment to
returning surplus cash to shareholders, including purchases under
the normal course issuer bid and plans to accelerate completion
prior to year end; anticipating strong production and throughput in
the second half of 2023; the company’s ongoing efforts to reduce
emissions in its operations, including the impact of the use of
renewable diesel at Kearl and demonstrating suitability for use in
heavy equipment applications; the company’s Strathcona renewable
diesel project, including timing, expected production, strong
demand, the ability to reduce reliance on costly imports, and the
reduction to greenhouse gas emissions; additional monitoring and
assessment activities at Kearl related to seepage and engagement
with local indigenous communities; the impact and timing of the
Cold Lake Grand Rapids phase 1 project, including reductions to
greenhouse gas emissions intensity; and progress of the Pathways
Alliance carbon storage hub, including obtaining a sequestration
agreement and timing of a regulatory application.
Forward-looking statements are based on the company's current
expectations, estimates, projections and assumptions at the time
the statements are made. Actual future financial and operating
results, including expectations and assumptions concerning demand
growth and energy source, supply and mix; production rates, growth
and mix across various assets; project plans, timing, costs,
technical evaluations and capacities and the company’s ability to
effectively execute on these plans and operate its assets,
including the Strathcona renewable diesel project; for shareholder
returns, assumptions such as cash flow forecasts, financing sources
and capital structure, participation of the company’s majority
shareholder and the results of periodic and ongoing evaluation of
alternate uses of capital; the adoption and impact of new
facilities or technologies on reductions to GHG emissions
intensity, including but not limited to Strathcona renewable
diesel, carbon capture and storage including in connection with
hydrogen for the renewable diesel project, and any changes in the
scope, terms, or costs of such projects; for renewable diesel, the
availability and cost of locally-sourced and grown feedstock and
the supply of renewable diesel to British Columbia in connection
with its low-carbon fuel legislation; the amount and timing of
emissions reductions, including the impact of lower carbon fuels;
that any required support from policymakers and other stakeholders
for various new technologies such as carbon capture and storage
will be provided; performance of third party service providers;
receipt of regulatory approvals in a timely manner; refinery
utilization; applicable laws and government policies, including
with respect to climate change, GHG emissions reductions and low
carbon fuels; the ability to offset any ongoing inflationary
pressures; capital and environmental expenditures; and commodity
prices, foreign exchange rates and general market conditions could
differ materially depending on a number of factors.
These factors include global, regional or local changes in
supply and demand for oil, natural gas, and petroleum and
petrochemical products and resulting price, differential and margin
impacts, including foreign government action with respect to supply
levels and prices, the impact of COVID-19 on demand and the
occurrence of wars; availability and allocation of capital; the
receipt, in a timely manner, of regulatory and third-party
approvals, including for new technologies that will help the
company meet its lower emissions goals; the results of research
programs and new technologies, the ability to bring new
technologies to commercial scale on a cost-competitive basis, and
the competitiveness of alternative energy and other emission
reduction technologies; failure or delay of supportive policy and
market development for the adoption of emerging lower emission
energy technologies and other technologies that support emissions
reductions; political or regulatory events, including changes in
law or government policy, environmental regulation including
climate change and greenhouse gas regulation, and actions in
response to COVID-19; unanticipated technical or operational
difficulties; project management and schedules and timely
completion of projects; availability and performance of third-party
service providers; environmental risks inherent in oil and gas
exploration and production activities; management effectiveness and
disaster response preparedness; operational hazards and risks;
cybersecurity incidents, including increased reliance on remote
working arrangements; currency exchange rates; general economic
conditions; and other factors discussed in Item 1A risk factors and
Item 7 management’s discussion and analysis of financial condition
and results of operations of Imperial Oil Limited’s most recent
annual report on Form 10-K and subsequent interim reports.
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 Oil Limited. 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.
Forward-looking and other statements regarding Imperial's
environmental, social and other sustainability efforts and
aspirations are not an indication that these statements are
necessarily material to investors or requiring disclosure in the
company's filings with securities regulators. In addition,
historical, current and forward-looking environmental, social and
sustainability-related statements may be based on standards for
measuring progress that are still developing, internal controls and
processes that continue to evolve, and assumptions that are subject
to change in the future, including future rule-making. Individual
projects or opportunities may advance based on a number of factors,
including availability of supportive policy, technology for
cost-effective abatement, company planning process, and alignment
with our partners and other stakeholders.
In this release all dollar amounts are expressed in Canadian
dollars unless otherwise stated. This release should be read in
conjunction with Imperial’s most recent Form 10-K. Note that
numbers may not add due to rounding.
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
Second Quarter
Six Months
millions of Canadian dollars, unless
noted
2023
2022
2023
2022
Net income (loss) (U.S. GAAP)
Total revenues and other income
11,819
17,307
23,940
29,993
Total expenses
10,935
14,141
21,411
25,293
Income (loss) before income taxes
884
3,166
2,529
4,700
Income taxes
209
757
606
1,118
Net income (loss)
675
2,409
1,923
3,582
Net income (loss) per common share
(dollars)
1.16
3.63
3.29
5.37
Net income (loss) per common share -
assuming dilution (dollars)
1.15
3.63
3.29
5.36
Other financial data
Gain (loss) on asset sales, after tax
10
3
18
19
Total assets at June 30
42,126
44,892
Total debt at June 30
4,144
5,166
Shareholders' equity at June 30
23,828
21,979
Capital employed at June 30
27,995
27,162
Dividends declared on common stock
Total
292
227
549
455
Per common share (dollars)
0.50
0.34
0.94
0.68
Millions of common shares outstanding
At June 30
584.2
636.7
Average - assuming dilution
585.3
664.4
585.3
668.1
Attachment II
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
Total cash and cash equivalents at
period end
2,376
2,867
2,376
2,867
Operating activities
Net income (loss)
675
2,409
1,923
3,582
Adjustments for non-cash items:
Depreciation and depletion
453
451
943
877
(Gain) loss on asset sales
(13)
(4)
(22)
(24)
Deferred income taxes and other
(15)
(149)
(71)
(480)
Changes in operating assets and
liabilities
(251)
(101)
(2,626)
594
All other items - net
36
76
(83)
47
Cash flows from (used in) operating
activities
885
2,682
64
4,596
Investing activities
Additions to property, plant and
equipment
(499)
(333)
(928)
(637)
Proceeds from asset sales
9
102
23
126
Loans to equity companies - net
1
1
2
2
Cash flows from (used in) investing
activities
(489)
(230)
(903)
(509)
Cash flows from (used in) financing
activities
(263)
(2,734)
(534)
(3,373)
Attachment III
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
Net income (loss) (U.S. GAAP)
Upstream
384
1,346
714
2,128
Downstream
250
1,033
1,120
1,422
Chemical
71
53
124
109
Corporate and other
(30)
(23)
(35)
(77)
Net income (loss)
675
2,409
1,923
3,582
Revenues and other income
Upstream
3,590
5,949
7,290
10,483
Downstream
12,735
18,785
26,217
32,830
Chemical
437
563
870
1,034
Eliminations / Corporate and other
(4,943)
(7,990)
(10,437)
(14,354)
Revenues and other income
11,819
17,307
23,940
29,993
Purchases of crude oil and
products
Upstream
1,432
2,357
2,975
4,247
Downstream
11,133
16,261
22,329
28,773
Chemical
263
401
537
716
Eliminations
(4,972)
(7,998)
(10,507)
(14,365)
Purchases of crude oil and products
7,856
11,021
15,334
19,371
Production and manufacturing
Upstream
1,256
1,423
2,543
2,672
Downstream
475
418
886
774
Chemical
54
67
112
121
Eliminations
—
—
—
—
Production and manufacturing
1,785
1,908
3,541
3,567
Selling and general
Upstream
—
—
—
—
Downstream
160
153
317
300
Chemical
22
22
48
45
Eliminations / Corporate and other
24
16
27
71
Selling and general
206
191
392
416
Capital and exploration
expenditures
Upstream
303
233
624
455
Downstream
152
69
226
137
Chemical
5
2
9
3
Corporate and other
33
10
63
15
Capital and exploration expenditures
493
314
922
610
Exploration expenses charged to Upstream
income included above
1
1
2
3
Attachment IV
Operating statistics
Second Quarter
Six Months
2023
2022
2023
2022
Gross crude oil and natural gas liquids
(NGL) production
(thousands of barrels per day)
Kearl
154
159
169
146
Cold Lake
132
144
137
142
Syncrude (a)
66
81
71
79
Conventional
5
11
5
11
Total crude oil production
357
395
382
378
NGLs available for sale
—
2
—
1
Total crude oil and NGL production
357
397
382
379
Gross natural gas production
(millions of cubic feet per day)
35
98
36
105
Gross oil-equivalent production
(b)
363
413
388
397
(thousands of oil-equivalent barrels per
day)
Net crude oil and NGL production
(thousands of barrels per day)
Kearl
144
145
157
134
Cold Lake
105
101
112
104
Syncrude (a)
61
63
65
61
Conventional
5
10
5
11
Total crude oil production
315
319
339
310
NGLs available for sale
—
1
—
1
Total crude oil and NGL production
315
320
339
311
Net natural gas production
(millions of cubic feet per day)
32
95
36
98
Net oil-equivalent production
(b)
320
336
345
327
(thousands of oil-equivalent barrels per
day)
Kearl blend sales (thousands of
barrels per day)
211
221
236
205
Cold Lake blend sales (thousands of
barrels per day)
174
191
182
189
NGL sales (thousands of barrels per
day)
—
2
—
1
Average realizations (Canadian
dollars)
Bitumen (per barrel)
68.64
112.27
58.94
101.53
Synthetic crude oil (per barrel)
100.92
144.67
101.73
131.41
Conventional crude oil (per barrel)
64.33
115.80
64.65
106.99
NGL (per barrel)
—
69.19
—
66.98
Natural gas (per thousand cubic feet)
2.36
6.81
2.73
5.98
Refinery throughput (thousands of
barrels per day)
388
412
403
406
Refinery capacity utilization
(percent)
90
96
93
95
Petroleum product sales (thousands
of barrels per day)
Gasolines
231
229
222
219
Heating, diesel and jet fuels
176
179
180
176
Lube oils and other products
42
49
42
49
Heavy fuel oils
26
23
21
20
Net petroleum products sales
475
480
465
464
Petrochemical sales (thousands of
tonnes)
220
222
438
432
(a)
Syncrude gross and net production included
bitumen and other products that were exported to the operator’s
facilities using an existing interconnect pipeline.
Gross bitumen and other products production
(thousands of barrels per day)
-
2
1
3
Net bitumen and other products production (thousands
of barrels per day)
-
2
1
3
(b)
Gas converted to oil-equivalent at six
million cubic feet per one thousand barrels.
Attachment V
Net income (loss) per
Net income (loss) (U.S. GAAP)
common share - diluted (a)
millions of Canadian dollars
Canadian dollars
2019
First Quarter
293
0.38
Second Quarter
1,212
1.57
Third Quarter
424
0.56
Fourth Quarter
271
0.36
Year
2,200
2.88
2020
First Quarter
(188)
(0.25)
Second Quarter
(526)
(0.72)
Third Quarter
3
—
Fourth Quarter
(1,146)
(1.56)
Year
(1,857)
(2.53)
2021
First Quarter
392
0.53
Second Quarter
366
0.50
Third Quarter
908
1.29
Fourth Quarter
813
1.18
Year
2,479
3.48
2022
First Quarter
1,173
1.75
Second Quarter
2,409
3.63
Third Quarter
2,031
3.24
Fourth Quarter
1,727
2.86
Year
7,340
11.44
2023
First Quarter
1,248
2.13
Second Quarter
675
1.15
Year
1,923
3.29
(a)
Computed using the average number of
shares outstanding during each period. The sum of the quarters
presented may not add to the year total.
Attachment VI
Non-GAAP financial measures and other specified financial
measures Certain measures included in this document are not
prescribed by U.S. Generally Accepted Accounting Principles (GAAP).
These measures constitute “non-GAAP financial measures” under
Securities and Exchange Commission Regulation G and Item 10(e) of
Regulation S-K, and “specified financial measures” under National
Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure
of the Canadian Securities Administrators.
Reconciliation of these non-GAAP financial measures to the most
comparable GAAP measure, and other information required by these
regulations, have been provided. Non-GAAP financial measures and
specified financial measures are not standardized financial
measures under GAAP and do not have a standardized definition. As
such, these measures may not be directly comparable to measures
presented by other companies, and should not be considered a
substitute for GAAP financial measures.
Cash flows from (used in) operating activities excluding
working capital Cash flows from (used in) operating activities
excluding working capital is a non-GAAP financial measure that is
the total cash flows from operating activities less the changes in
operating assets and liabilities in the period. The most directly
comparable financial measure that is disclosed in the financial
statements is "Cash flows from (used in) operating activities"
within the company’s Consolidated statement of cash flows.
Management believes it is useful for investors to consider these
numbers in comparing the underlying performance of the company’s
business across periods when there are significant period-to-period
differences in the amount of changes in working capital. Changes in
working capital is equal to “Changes in operating assets and
liabilities” as disclosed in the company’s Consolidated statement
of cash flows and in Attachment II of this document. This measure
assesses the cash flows at an operating level, and as such, does
not include proceeds from asset sales as defined in Cash flows from
operating activities and asset sales in the Frequently Used Terms
section of the company’s annual Form 10-K.
Reconciliation of cash flows from (used in) operating
activities excluding working capital
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
From Imperial's Consolidated statement
of cash flows
Cash flows from (used in) operating
activities
885
2,682
64
4,596
Less changes in working capital
Changes in operating assets and
liabilities
(251)
(101)
(2,626)
594
Cash flows from (used in) operating
activities excl. working capital
1,136
2,783
2,690
4,002
Free cash flow
Free cash flow is a non-GAAP financial measure that is cash
flows from operating activities less additions to property, plant
and equipment and equity company investments plus proceeds from
asset sales. The most directly comparable financial measure that is
disclosed in the financial statements is "Cash flows from (used in)
operating activities" within the company’s Consolidated statement
of cash flows. This measure is used to evaluate cash available for
financing activities (including but not limited to dividends and
share purchases) after investment in the business.
Reconciliation of free cash flow
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
From Imperial's Consolidated statement
of cash flows
Cash flows from (used in) operating
activities
885
2,682
64
4,596
Cash flows from (used in) investing
activities
Additions to property, plant and
equipment
(499)
(333)
(928)
(637)
Proceeds from asset sales
9
102
23
126
Loans to equity companies - net
1
1
2
2
Free cash flow
396
2,452
(839)
4,087
Net income (loss) excluding identified items Net income
(loss) excluding identified items is a non-GAAP financial measure
that is total net income (loss) excluding individually significant
non-operational events with an absolute corporate total earnings
impact of at least $100 million in a given quarter. The net income
(loss) impact of an identified item for an individual segment in a
given quarter may be less than $100 million when the item impacts
several segments or several periods. The most directly comparable
financial measure that is disclosed in the financial statements is
"Net income (loss)" within the company’s Consolidated statement of
income. Management uses these figures to improve comparability of
the underlying business across multiple periods by isolating and
removing significant non-operational events from business results.
The company believes this view provides investors increased
transparency into business results and trends, and provides
investors with a view of the business as seen through the eyes of
management. Net income (loss) excluding identified items is not
meant to be viewed in isolation or as a substitute for net income
(loss) as prepared in accordance with U.S. GAAP. All identified
items are presented on an after-tax basis.
Reconciliation of net income (loss) excluding identified
items There were no identified items in the second quarter or
year-to-date 2023 and 2022.
Cash operating costs (cash costs) Cash operating costs is
a non-GAAP financial measure that consists of total expenses, less
purchases of crude oil and products, federal excise taxes and fuel
charge, financing, and costs that are non-cash in nature, including
depreciation and depletion, and non-service pension and
postretirement benefit. The components of cash operating costs
include "Production and manufacturing", "Selling and general" and
"Exploration" from the company’s Consolidated statement of income,
and as disclosed in Attachment III of this document. The sum of
these income statement lines serve as an indication of cash
operating costs and does not reflect the total cash expenditures of
the company. The most directly comparable financial measure that is
disclosed in the financial statements is "Total expenses" within
the company’s Consolidated statement of income. This measure is
useful for investors to understand the company’s efforts to
optimize cash through disciplined expense management.
Reconciliation of cash operating costs
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
From Imperial's Consolidated statement
of income
Total expenses
10,935
14,141
21,411
25,293
Less:
Purchases of crude oil and products
7,856
11,021
15,334
19,371
Federal excise taxes and fuel charge
598
553
1,127
1,032
Depreciation and depletion
453
451
943
877
Non-service pension and postretirement
benefit
20
5
40
9
Financing
16
11
32
18
Cash operating costs
1,992
2,100
3,935
3,986
Components of cash operating costs
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
From Imperial's Consolidated statement
of income
Production and manufacturing
1,785
1,908
3,541
3,567
Selling and general
206
191
392
416
Exploration
1
1
2
3
Cash operating costs
1,992
2,100
3,935
3,986
Segment contributions to total cash operating costs
Second Quarter
Six Months
millions of Canadian dollars
2023
2022
2023
2022
Upstream
1,257
1,424
2,545
2,675
Downstream
635
571
1,203
1,074
Chemicals
76
89
160
166
Corporate / Eliminations
24
16
27
71
Cash operating costs
1,992
2,100
3,935
3,986
Unit cash operating cost (unit cash costs)
Unit cash operating costs is a non-GAAP ratio. Unit cash
operating costs (unit cash costs) is calculated by dividing cash
operating costs by total gross oil-equivalent production, and is
calculated for the Upstream segment, as well as the major Upstream
assets. Cash operating costs is a non-GAAP financial measure and is
disclosed and reconciled above. This measure is useful for
investors to understand the expense management efforts of the
company’s major assets as a component of the overall Upstream
segment. Unit cash operating cost, as used by management, does not
directly align with the definition of “Average unit production
costs” as set out by the U.S. Securities and Exchange Commission
(SEC), and disclosed in the company’s SEC Form 10-K.
Components of unit cash operating cost
Second Quarter
2023
2022
millions of Canadian dollars
Upstream (a)
Kearl
Cold Lake
Syncrude
Upstream (a)
Kearl
Cold Lake
Syncrude
Production and manufacturing
1,256
526
282
412
1,423
578
396
380
Selling and general
—
—
—
—
—
—
—
—
Exploration
1
—
—
—
1
—
—
—
Cash operating costs
1,257
526
282
412
1,424
578
396
380
Gross oil-equivalent production
363
154
132
66
413
159
144
81
(thousands of barrels per day)
Unit cash operating cost
($/oeb)
38.05
37.53
23.48
68.60
37.89
39.95
30.22
51.55
USD converted at the quarterly average
forex
28.16
27.77
17.38
50.76
29.55
31.16
23.57
40.21
2023 US$0.74; 2022 US$0.78
Six Months
2023
2022
millions of Canadian dollars
Upstream (a)
Kearl
Cold Lake
Syncrude
Upstream (a)
Kearl
Cold Lake
Syncrude
Production and manufacturing
2,543
1,084
584
811
2,672
1,099
718
728
Selling and general
—
—
—
—
—
—
—
—
Exploration
2
—
—
—
3
—
—
—
Cash operating costs
2,545
1,084
584
811
2,675
1,099
718
728
Gross oil-equivalent production
388
169
137
71
397
146
142
79
(thousands of barrels per day)
Unit cash operating cost
($/oeb)
36.24
35.44
23.55
63.11
37.23
41.59
27.94
50.91
USD converted at the YTD average forex
26.82
26.23
17.43
46.70
29.41
32.86
22.07
40.22
2023 US$0.74; 2022 US$0.79
(a)
Upstream includes Imperial's share of
Kearl, Cold Lake, Syncrude and other.
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, 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
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version on businesswire.com: https://www.businesswire.com/news/home/20230728803568/en/
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