Imperial Announces Second Quarter 2021 Financial and Operating Results
Imperial Oil Limited (IMO) reported a net income of $366 million for Q2 2021, a significant recovery from a net loss of $526 million in Q2 2020. Cash flow from operating activities reached $852 million, compared to ($816 million) in the same period last year. The company saw the highest second-quarter production in over 25 years, averaging 401,000 gross oil-equivalent barrels per day. Shareholders benefited with over $1.3 billion returned through dividends and share repurchases. The outlook shows increased production guidance for Kearl to 265,000 barrels per day.
- Net income for Q2 2021 was $366 million, a recovery from a loss of $526 million in 2020.
- Cash flow from operating activities improved to $852 million from ($816 million) year-over-year.
- Second-quarter production reached 401,000 gross oil-equivalent barrels per day, the highest in over 25 years.
- Returned over $1.3 billion to shareholders through dividends and share repurchases in Q2 2021.
- Increased production guidance for Kearl to 265,000 barrels per day, up from previous estimates.
- Cash flow from operating activities decreased from $1,045 million in Q1 2021 to $852 million in Q2 2021.
- Second-quarter results were negatively impacted by significant planned turnaround activities and weaker downstream margins.
Imperial Oil Limited (TSX, NYSEAM: IMO):
-
Second quarter earnings of
$366 million with cash flow from operating activities of$852 million - Successfully completed significant planned turnaround activities at Kearl, Syncrude and Strathcona
- Highest second quarter production in over 25 years driven by record production at Kearl
- Accelerating plans to extend intervals between planned turnarounds at Kearl, eliminating need for second annual turnaround beginning in 2021
- 2021 total gross production guidance increased by 10,000 barrels per day at Kearl and by 5,000 barrels per day at Cold Lake driven by sustained strong performance
- Highest Chemical quarterly net income in over 30 years
-
Returned over
$1.3 billion to shareholders through dividends and repurchase of4% of outstanding shares -
Renewed share purchase program to repurchase up to an additional
5% of outstanding shares - Announced the launch of the Oil Sands Pathways to Net Zero industry alliance
|
|
|
|
|
|
|
|
|
|
|
|
|
Second quarter |
|
Six months |
||||
millions of Canadian dollars, unless noted |
2021 |
2020 |
∆ |
|
2021 |
2020 |
∆ |
||
Net income (loss) (U.S. GAAP) |
366 |
(526) |
+892 |
|
758 |
(714) |
+1,472 |
||
Net income (loss) per common share, assuming dilution (dollars) |
0.50 |
(0.72) |
+1.22 |
|
1.04 |
(0.97) |
+2.01 |
||
Capital and exploration expenditures |
259 |
207 |
+52 |
|
422 |
538 |
-116 |
||
|
|
||||||||
Imperial reported estimated net income in the second quarter of
“The decisive actions Imperial took throughout the pandemic to accelerate structural business improvements have enabled the company to recover strongly and generate over
Upstream production for the second quarter averaged 401,000 gross oil-equivalent barrels per day, the highest second quarter production in over 25 years. Kearl quarterly total gross production averaged 255,000 barrels per day, achieving its second highest ever quarterly production while also executing a major planned turnaround. Subsequent to the successful completion of this turnaround, Kearl established a new single-month production record of 311,000 total gross barrels per day in June, surpassing its prior single-month record by 10,000 total gross barrels per day. At Cold Lake, the continued focus on production optimization and reliability improvements supported another strong quarter of production, averaging 142,000 gross barrels per day.
Following implementation of a multi-year reliability improvement plan and exceptional demonstrated performance, Imperial is accelerating plans to extend the interval between turnarounds at Kearl. This change eliminates the need for a second annual turnaround starting this fall and increases 2021 production guidance for Kearl to 265,000 total gross barrels per day. In addition, based on production performance and enhanced reliability, Imperial is increasing 2021 production guidance for Cold Lake to 135,000 barrels per day.
Refinery throughput in the quarter averaged 332,000 barrels per day with capacity utilization of 78 percent and petroleum product sales of 429,000 barrels per day. Results in the quarter were primarily impacted by the major planned turnaround at Strathcona refinery, which reduced throughput by approximately 70,000 barrels per day. Subsequent to the successful completion of this turnaround, overall refinery capacity utilization increased to 93 percent in the month of June.
Chemical second quarter net income was
During the second quarter of 2021, Imperial returned over
“Despite heavy turnaround activity, Imperial generated substantial free cash flow1 in the quarter which, together with performance in the first quarter, supported our dividend and the repurchase of four percent of our shares, returning over
In June, Imperial and its industry peers announced the launch of the Oil Sands Pathways to Net Zero alliance. “Imperial is proud to be a founding member of this unprecedented alliance and we look forward to working together with industry and governments to support society’s ambition to achieve net zero emissions,” added Corson.
¹ non-GAAP measure - See Attachment VI for definition and reconciliation |
Second quarter highlights
-
Net income of
$366 million or$0.50 per share on a diluted basis, compared to a net loss of$526 million or$0.72 per share in the second quarter of 2020. Net income excluding identified items¹ of$366 million in the second quarter of 2021, compared to net loss excluding identified items¹ of$807 million in the same period of 2020. -
Cash flows from operating activities of
$852 million , compared to cash flows used in operating activities of$816 million in the same period of 2020. Cash flows from operating activities excluding working capital¹ of$893 million , up from cash flows used in operating activities excluding working capital¹ of$575 million in the same period of 2020. -
Capital and exploration expenditures totalled
$259 million , up from$207 million in the second quarter of 2020. The company continues to anticipate full-year capital and exploration expenditures of$1.2 billion in 2021. -
The company returned
$1,332 million to shareholders in the second quarter of 2021, including$1,171 million in share repurchases and$161 million in dividends paid. - Renewed share repurchase program, enabling the purchase of up to five percent of common shares outstanding, a maximum of 35,583,671 shares, during the 12-month period ending June 28, 2022, consistent with Imperial’s commitment to return surplus cash to shareholders.
- Production averaged 401,000 gross oil-equivalent barrels per day, up from 347,000 barrels per day in the same period of 2020. Increased production was driven by strong operating performance as well as the absence of prior year production balancing in-line with market demand. Quarterly production represents the highest second quarter production in over 25 years.
- Total gross bitumen production at Kearl averaged 255,000 barrels per day (181,000 barrels Imperial's share), up from 190,000 barrels per day (135,000 barrels Imperial's share) in the second quarter of 2020. Kearl achieved its second highest ever quarterly production while also completing a major planned turnaround. In June, Kearl established a new single month production record of 311,000 total gross barrels per day, surpassing the prior single-month record by 10,000 total gross barrels per day. Full-year production is now expected to be 265,000 total gross barrels per day, an increase of 10,000 total gross barrels per day above previous guidance, as Kearl transitions to a single annual turnaround beginning in 2021, one year ahead of schedule.
- Successful start-up of the first Kearl Boiler Flue Gas heat recovery unit. This technology recovers waste heat from a boiler’s combustion exhaust to pre-heat process water and has the potential to not only reduce operating costs, but also emissions by up to 30,000 tonnes/year of carbon dioxide equivalent. Imperial is currently progressing plans to apply this innovative technology on up to five additional boilers.
- Gross bitumen production at Cold Lake averaged 142,000 barrels per day, up from 123,000 barrels per day in the second quarter of 2020. Higher production was primarily due to improved reliability and lower scheduled downtime compared to the second quarter of 2020. Full-year gross production is now expected to be 135,000 barrels per day, an increase of 5,000 barrels per day above previous guidance, primarily driven by production optimization and reliability enhancements.
- The company's share of gross production from Syncrude averaged 47,000 barrels per day, compared to 50,000 barrels per day in the second quarter of 2020. Syncrude completed a major planned turnaround during the second quarter of 2021 and ramped up to full production rates early in the third quarter.
- Refinery throughput averaged 332,000 barrels per day, up from 278,000 barrels per day in the second quarter of 2020. Capacity utilization was 78 percent, up from 66 percent in the second quarter of 2020. Strathcona refinery completed a major planned turnaround during the second quarter of 2021. Subsequent to the turnaround, overall refinery capacity utilization increased to 93 percent in the month of June.
- Petroleum product sales were 429,000 barrels per day, up from 357,000 barrels per day in the second quarter of 2020. Increased sales were primarily driven by lower COVID-19 related impacts.
- Launched the redesigned Synergy Supreme premium gasoline at Esso stations across Canada. Synergy Supreme is formulated to keep engines three times cleaner and has an advanced additive package that provides enhanced engine protection.
-
Chemical net income of
$109 million in the quarter, the highest quarterly net income in over 30 years, up from$7 million in the second quarter of 2020. Improved results were primarily driven by continued strength in polyethylene margins. - Announced the launch of the Oil Sands Pathways to Net Zero industry alliance. The goal of this unique alliance, working collectively with the federal and Alberta governments, is to achieve net zero greenhouse gas emissions from oil sands operations by 2050 to help Canada meet its climate goals. This alliance includes Canada’s five largest oil sands producers, representing approximately 90 percent of the country’s oil sands production.
Operating Results
In early 2020, the balance of supply and demand for petroleum and petrochemical products experienced two significant disruptive effects. On the demand side, the COVID-19 pandemic spread rapidly through most areas of the world resulting in substantial reductions in consumer and business activity and significantly reduced demand for crude oil, natural gas, and petroleum products. This reduction in demand coincided with announcements of increased production in certain key oil-producing countries which led to increases in inventory levels and sharp declines in prices for crude oil, natural gas, and petroleum products.
Through 2021, demand for petroleum and petrochemical products has continued to improve leading to stronger prices and margins across all segments. Some lingering effects of the weak 2020 business environment continued to have a negative impact on financial results in the first half of 2021 when compared to periods prior to the pandemic. The company continues to closely monitor industry and global economic conditions, including recovery from the COVID-19 pandemic.
Second quarter 2021 vs. second quarter 2020
The company recorded net income of
Upstream recorded net income of
West Texas Intermediate (WTI) averaged US
The Canadian dollar averaged US
Imperial’s average Canadian dollar realizations for bitumen increased in the quarter, primarily due to an increase in WCS. Bitumen realizations averaged
Total gross production of Kearl bitumen averaged 255,000 barrels per day in the second quarter (181,000 barrels Imperial’s share), up from 190,000 barrels per day (135,000 barrels Imperial’s share) in the second quarter of 2020. Higher production was mainly due to the absence of prior year production balancing with market demands, partially offset by impacts associated with planned turnaround activities.
Gross production of Cold Lake bitumen averaged 142,000 barrels per day in the second quarter, up from 123,000 barrels per day in the same period of 2020. Higher production was primarily due to improved reliability and lower scheduled downtime.
The company's share of gross production from Syncrude averaged 47,000 barrels per day, compared to 50,000 barrels per day in the second quarter of 2020. Lower production was primarily associated with planned turnaround activities, partially offset by the absence of prior year production balancing with market demands.
Downstream recorded net income of
Refinery throughput averaged 332,000 barrels per day, up from 278,000 barrels per day in the second quarter of 2020. Capacity utilization was 78 percent, up from 66 percent in the second quarter of 2020. Higher throughput was driven by reduced impacts associated with the COVID-19 pandemic, partially offset by a planned turnaround at Strathcona.
Petroleum product sales were 429,000 barrels per day, up from 357,000 barrels per day in the second quarter of 2020. Improved petroleum product sales were mainly due to reduced impacts associated with the COVID-19 pandemic.
Chemical net income was
Corporate and other expenses were
Cash flow generated from operating activities was
Investing activities used net cash of
Cash used in financing activities was
The company’s cash balance was
On April 30, 2021, the company announced an amendment to its normal course issuer bid to increase the number of common shares that were available to be purchased. Under the amendment, the number of common shares available for purchase increased to a maximum of 29,363,070 common shares during the period June 29, 2020 to June 28, 2021.
On June 23, 2021, 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 35,583,671 common shares during the period June 29, 2021 to June 28, 2022. 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, 2022.
Six months highlights
-
Net income of
$758 million , compared to net loss of$714 million in 2020. -
Net income per share on a diluted basis was
$1.04 , compared to net loss per share of$0.97 in 2020. -
Cash flow generated from operating activities was
$1,897 million , compared to cash flow used in operating activities of$393 million in 2020. -
Capital and exploration expenditures totalled
$422 million , compared to$538 million in 2020. - Gross oil-equivalent production averaged 417,000 barrels per day, up from 383,000 barrels per day in 2020.
- Refinery throughput averaged 348,000 barrels per day, up from 330,000 barrels per day in 2020.
- Petroleum product sales were 421,000 barrels per day, up from 409,000 barrels per day in 2020.
-
Per share dividends declared during the year totalled
$0.49 , up from$0.44 per share in 2020. -
Returned
$1,494 million to shareholders through dividends and share purchases.
Six months 2021 vs. six months 2020
Net income in the first six months of 2021 was
Upstream recorded net income of
West Texas Intermediate averaged US
The Canadian dollar averaged US
Imperial's average Canadian dollar realizations for bitumen increased in the first six months of 2021 primarily due to an increase in WCS. Bitumen realizations averaged
Total gross production of Kearl bitumen averaged 253,000 barrels per day in the first six months of 2021 (180,000 barrels Imperial's share), up from 208,000 barrels per day (147,000 barrels Imperial's share) in the same period of 2020. Higher production was mainly due to the absence of prior year production balancing with market demands, partially offset by impacts associated with planned turnaround activities.
Gross production of Cold Lake bitumen averaged 141,000 barrels per day in the first six months of 2021, up from 131,000 barrels per day in the same period of 2020. Higher production was primarily due to improved reliability.
During the first six months of 2021, the company's share of gross production from Syncrude averaged 63,000 barrels per day, up from 61,000 barrels per day in the same period of 2020. Higher production was primarily associated with the absence of prior year production balancing with market demands and unplanned downtime, partially offset by planned turnaround activities.
Downstream net income was
Refinery throughput averaged 348,000 barrels per day in the first six months of 2021, up from 330,000 barrels per day in the same period of 2020. Capacity utilization was 81 percent, up from 78 percent in the same period of 2020. Higher throughput was driven by reduced impacts associated with the COVID-19 pandemic, partially offset by a planned turnaround at Strathcona.
Petroleum product sales were 421,000 barrels per day in the first six months of 2021, up from 409,000 barrels per day in the same period of 2020. Improved petroleum product sales were mainly due to reduced impacts associated with the COVID-19 pandemic.
Chemical net income was
Corporate and other expenses were
Cash flow generated from operating activities was
Investing activities used net cash of
Cash used in financing activities was
At March 31, 2021, due to the termination of transportation services agreements related to a third-party pipeline project, the company recognized a liability of
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. Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, project, predict, target, estimate, expect, strategy, outlook, schedule, 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 acceleration of plans to extend the interval between turnarounds at Kearl and eliminating the need for a second turnaround this fall; the company being well positioned to deliver on its commitments; increased Kearl 2021 production guidance of 265,000 gross barrels per day; increased Cold Lake 2021 production guidance of 135,000 barrels per day; the company’s focus on increased production, higher refinery utilization, capital discipline and returning cash to shareholders; the impact of participation in the Oil Sands Pathways to Net Zero alliance to support society’s ambition to achieve net zero; anticipated full year capital and exploration expenditures of
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; commodity prices, foreign exchange rates and general market conditions; 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 ability to effectively implement the extension of turnaround intervals at Kearl; the adoption and impact of new facilities or technologies such as Kearl’s Boiler Flue Gas unit, including on reductions to greenhouse gases; progression of COVID-19 and its impacts on Imperial’s ability to operate its assets, including the possible shutdown of facilities due to COVID-19 outbreaks; applicable laws and government policies, including restrictions in response to COVID-19; cost savings; refinery utilization; cash generation, financing sources and capital structure; capital and environmental expenditures; and the company’s ability to effectively execute on its business continuity plans and pandemic response activities 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 and the impact of COVID-19 on demand; availability and allocation of capital; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; availability and performance of third-party service providers, including in light of restrictions related to COVID-19; political or regulatory events, including changes in law or government policy such as tax laws, production curtailment and actions in response to COVID-19; transportation for accessing markets; the results of research programs and new technologies, and ability to bring new technologies to commercial scale on a cost-competitive basis; management effectiveness and disaster response preparedness, including business continuity plans in response to COVID-19; environmental risks inherent in oil and gas exploration and production activities; environmental regulation, including climate change and greenhouse gas regulation and changes to such regulation; the receipt, in a timely manner, of regulatory and third-party approvals; operational hazards and risks; cybersecurity incidents, including increased reliance on remote working arrangements and activation of business continuity plans due to COVID-19; 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.
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.
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.
Synergy Supreme claims are based on comparison of Synergy Supreme premium gas to gasoline meeting minimum Canadian government detergency standards in port fuel injected engines. Actual benefits are based on continuous use and may vary depending on vehicle type, driving style, and gasoline previously used.
|
|
|
|
|
|
|
|
|
Attachment I |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars, unless noted |
2021 |
2020 |
|
2021 |
2020 |
|
|
|
|
|
|
Net Income (loss) (U.S. GAAP) |
|
|
|
|
|
Total revenues and other income |
8,047 |
3,710 |
|
15,045 |
10,400 |
Total expenses |
7,576 |
4,403 |
|
14,062 |
11,348 |
Income (loss) before income taxes |
471 |
(693) |
|
983 |
(948) |
Income taxes |
105 |
(167) |
|
225 |
(234) |
Net income (loss) |
366 |
(526) |
|
758 |
(714) |
|
|
|
|
|
|
Net income (loss) per common share (dollars) |
0.51 |
(0.72) |
|
1.04 |
(0.97) |
Net income (loss) per common share - assuming dilution (dollars) |
0.50 |
(0.72) |
|
1.04 |
(0.97) |
|
|
|
|
|
|
Other Financial Data |
|
|
|
|
|
Gain (loss) on asset sales, after tax |
22 |
9 |
|
24 |
15 |
|
|
|
|
|
|
Total assets at June 30 |
|
|
|
38,939 |
39,500 |
|
|
|
|
|
|
Total debt at June 30 |
|
|
|
5,262 |
5,193 |
|
|
|
|
|
|
Shareholders' equity at June 30 |
|
|
|
20,769 |
22,916 |
|
|
|
|
|
|
Capital employed at June 30 |
|
|
|
26,055 |
28,134 |
|
|
|
|
|
|
Dividends declared on common stock |
|
|
|
|
|
Total |
195 |
162 |
|
356 |
324 |
Per common share (dollars) |
0.27 |
0.22 |
|
0.49 |
0.44 |
|
|
|
|
|
|
Millions of common shares outstanding |
|
|
|
|
|
At June 30 |
|
|
|
704.6 |
734.1 |
Average - assuming dilution |
725.8 |
734.1 |
|
730.8 |
736.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment II |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars |
2021 |
2020 |
|
2021 |
2020 |
|
|
|
|
|
|
Total cash and cash equivalents at period end |
776 |
233 |
|
776 |
233 |
|
|
|
|
|
|
Operating Activities |
|
|
|
|
|
Net income (loss) |
366 |
(526) |
|
758 |
(714) |
Adjustments for non-cash items: |
|
|
|
|
|
Depreciation and depletion |
450 |
413 |
|
944 |
866 |
Impairment of intangible assets |
- |
- |
|
- |
20 |
(Gain) loss on asset sales |
(24) |
(10) |
|
(27) |
(17) |
Inventory write-down to current market value |
- |
(281) |
|
- |
- |
Deferred income taxes and other |
76 |
(242) |
|
136 |
(199) |
Changes in operating assets and liabilities |
(41) |
(241) |
|
(64) |
(429) |
All other items - net |
25 |
71 |
|
150 |
80 |
Cash flows from (used in) operating activities |
852 |
(816) |
|
1,897 |
(393) |
|
|
|
|
|
|
|
|
|
|
|
|
Investing Activities |
|
|
|
|
|
Additions to property, plant and equipment |
(241) |
(205) |
|
(408) |
(515) |
Proceeds from asset sales |
35 |
40 |
|
42 |
49 |
Loans to equity companies - net |
(1) |
(7) |
|
12 |
(14) |
Cash flows from (used in) investing activities |
(207) |
(172) |
|
(354) |
(480) |
|
|
|
|
|
|
Cash flows from (used in) financing activities |
(1,336) |
(167) |
|
(1,538) |
(612) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment III |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars |
2021 |
2020 |
|
2021 |
2020 |
|
|
|
|
|
|
Net income (loss) (U.S. GAAP) |
|
|
|
|
|
Upstream |
247 |
(444) |
|
326 |
(1,052) |
Downstream |
60 |
(32) |
|
352 |
370 |
Chemical |
109 |
7 |
|
176 |
28 |
Corporate and other |
(50) |
(57) |
|
(96) |
(60) |
Net income (loss) |
366 |
(526) |
|
758 |
(714) |
|
|
|
|
|
|
Revenues and other income |
|
|
|
|
|
Upstream |
3,934 |
1,180 |
|
7,427 |
3,554 |
Downstream |
5,831 |
2,738 |
|
11,136 |
8,117 |
Chemical |
456 |
199 |
|
832 |
459 |
Eliminations / Corporate and other |
(2,174) |
(407) |
|
(4,350) |
(1,730) |
Revenues and other income |
8,047 |
3,710 |
|
15,045 |
10,400 |
|
|
|
|
|
|
Purchases of crude oil and products |
|
|
|
|
|
Upstream |
2,044 |
512 |
|
3,878 |
2,162 |
Downstream |
4,760 |
1,896 |
|
8,780 |
5,665 |
Chemical |
240 |
119 |
|
449 |
259 |
Eliminations |
(2,177) |
(412) |
|
(4,353) |
(1,745) |
Purchases of crude oil and products |
4,867 |
2,115 |
|
8,754 |
6,341 |
|
|
|
|
|
|
Production and manufacturing |
|
|
|
|
|
Upstream |
1,166 |
884 |
|
2,275 |
1,992 |
Downstream |
357 |
343 |
|
683 |
751 |
Chemical |
46 |
46 |
|
96 |
109 |
Eliminations |
- |
- |
|
- |
- |
Production and manufacturing |
1,569 |
1,273 |
|
3,054 |
2,852 |
|
|
|
|
|
|
Selling and general |
|
|
|
|
|
Upstream |
- |
- |
|
- |
- |
Downstream |
142 |
135 |
|
275 |
316 |
Chemical |
22 |
21 |
|
47 |
46 |
Eliminations / Corporate and other |
36 |
27 |
|
67 |
(13) |
Selling and general |
200 |
183 |
|
389 |
349 |
|
|
|
|
|
|
Capital and exploration expenditures |
|
|
|
|
|
Upstream |
130 |
145 |
|
215 |
376 |
Downstream |
120 |
51 |
|
188 |
127 |
Chemical |
2 |
2 |
|
4 |
11 |
Corporate and other |
7 |
9 |
|
15 |
24 |
Capital and exploration expenditures |
259 |
207 |
|
422 |
538 |
|
|
|
|
|
|
Exploration expenses charged to Upstream income included above |
2 |
3 |
|
4 |
4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Attachment IV |
|||
|
|
|
|
|
|
|
|
|
|
|
|
Operating statistics |
Second Quarter |
|
Six Months |
||
|
2021 |
2020 |
|
2021 |
2020 |
|
|
|
|
|
|
Gross crude oil and natural gas liquids (NGL) production |
|
|
|
|
|
(thousands of barrels per day) |
|
|
|
|
|
Kearl |
181 |
135 |
|
180 |
147 |
Cold Lake |
142 |
123 |
|
141 |
131 |
Syncrude |
47 |
50 |
|
63 |
61 |
Conventional |
11 |
11 |
|
10 |
14 |
Total crude oil production |
381 |
319 |
|
394 |
353 |
NGLs available for sale |
1 |
2 |
|
2 |
2 |
Total crude oil and NGL production |
382 |
321 |
|
396 |
355 |
|
|
|
|
|
|
Gross natural gas production (millions of cubic feet per day) |
116 |
157 |
|
123 |
167 |
|
|
|
|
|
|
Gross oil-equivalent production (a) |
401 |
347 |
|
417 |
383 |
(thousands of oil-equivalent barrels per day) |
|
|
|
|
|
|
|
|
|
|
|
Net crude oil and NGL production (thousands of barrels per day) |
|
|
|
|
|
Kearl |
174 |
134 |
|
174 |
144 |
Cold Lake |
111 |
122 |
|
112 |
128 |
Syncrude |
38 |
49 |
|
56 |
60 |
Conventional |
11 |
11 |
|
10 |
12 |
Total crude oil production |
334 |
316 |
|
352 |
344 |
NGLs available for sale |
2 |
1 |
|
2 |
1 |
Total crude oil and NGL production |
336 |
317 |
|
354 |
345 |
|
|
|
|
|
|
Net natural gas production (millions of cubic feet per day) |
119 |
146 |
|
119 |
161 |
|
|
|
|
|
|
Net oil-equivalent production (a) |
356 |
341 |
|
374 |
372 |
(thousands of oil-equivalent barrels per day) |
|
|
|
|
|
|
|
|
|
|
|
Kearl blend sales (thousands of barrels per day) |
252 |
199 |
|
250 |
209 |
Cold Lake blend sales (thousands of barrels per day) |
201 |
176 |
|
191 |
183 |
NGL sales (thousands of barrels per day) (b) |
- |
2 |
|
- |
2 |
|
|
|
|
|
|
Average realizations (Canadian dollars) |
|
|
|
|
|
Bitumen (per barrel) |
57.26 |
12.82 |
|
52.45 |
15.54 |
Synthetic oil (per barrel) |
80.80 |
32.20 |
|
72.42 |
48.10 |
Conventional crude oil (per barrel) |
58.44 |
15.47 |
|
54.16 |
30.26 |
NGL (per barrel) |
30.07 |
13.88 |
|
30.97 |
11.41 |
Natural gas (per thousand cubic feet) |
3.45 |
1.50 |
|
3.34 |
1.69 |
|
|
|
|
|
|
Refinery throughput (thousands of barrels per day) |
332 |
278 |
|
348 |
330 |
Refinery capacity utilization (percent) |
78 |
66 |
|
81 |
78 |
|
|
|
|
|
|
Petroleum product sales (thousands of barrels per day) |
|
|
|
|
|
Gasolines |
209 |
178 |
|
203 |
205 |
Heating, diesel and jet fuels |
147 |
125 |
|
150 |
152 |
Heavy fuel oils |
28 |
18 |
|
24 |
16 |
Lube oils and other products |
45 |
36 |
|
44 |
36 |
Net petroleum products sales |
429 |
357 |
|
421 |
409 |
|
|
|
|
|
|
Petrochemical sales (thousands of tonnes) |
222 |
190 |
|
433 |
376 |
|
|
|
|
|
|
(a) |
Gas converted to oil-equivalent at six million cubic feet per one thousand barrels. |
|
(b) |
2021 NGL sales round to 0. |
|
|
|
|
|
|
|
|
|
Attachment V |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per |
||
|
Net income (loss) (U.S. GAAP) |
|
common share - diluted (a) |
||
|
millions of Canadian dollars |
|
|
Canadian dollars |
|
|
|
|
|
|
|
2017 |
|
|
|
|
|
First Quarter |
333 |
|
|
|
0.39 |
Second Quarter |
(77) |
|
|
|
(0.09) |
Third Quarter |
371 |
|
|
|
0.44 |
Fourth Quarter |
(137) |
|
|
|
(0.16) |
Year |
490 |
|
|
|
0.58 |
|
|
|
|
|
|
2018 |
|
|
|
|
|
First Quarter |
516 |
|
|
|
0.62 |
Second Quarter |
196 |
|
|
|
0.24 |
Third Quarter |
749 |
|
|
|
0.94 |
Fourth Quarter |
853 |
|
|
|
1.08 |
Year |
2,314 |
|
|
|
2.86 |
|
|
|
|
|
|
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 |
Year |
758 |
|
|
|
1.04 |
(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
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. Reconciliation of these non-GAAP financial measures to the most comparable GAAP measure, and other information required by this regulation have been provided. Non-GAAP measures do not have a standardized definition and as such, 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 the total cash flows from operating activities less the changes in operating assets and liabilities in the period. 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.
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars |
2021 |
2020 |
|
2021 |
2020 |
Cash flows from (used in) operating activities |
852 |
(816) |
|
1,897 |
(393) |
|
|
|
|
|
|
Less changes in working capital |
|
|
|
|
|
Changes in operating assets and liabilities |
(41) |
(241) |
|
(64) |
(429) |
Cash flows from (used in) operating activities excl. working capital |
893 |
(575) |
|
1,961 |
36 |
Free cash flow
Free cash flow is cash flow from operating activities less additions to property, plant and equipment and equity company investments plus proceeds from asset sales. 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.
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars |
2021 |
2020 |
|
2021 |
2020 |
Cash flows from (used in) operating activities |
852 |
(816) |
|
1,897 |
(393) |
|
|
|
|
|
|
Cash flows from (used in) investing activities |
|
|
|
|
|
Additions to property, plant and equipment |
(241) |
(205) |
|
(408) |
(515) |
Proceeds from asset sales |
35 |
40 |
|
42 |
49 |
Loans to equity companies - net |
(1) |
(7) |
|
12 |
(14) |
Free cash flow |
645 |
(988) |
|
1,543 |
(873) |
Net income (loss) excluding identified items
Net income (loss) excluding identified items is total net income (loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars |
2021 |
2020 |
|
2021 |
2020 |
Net Income (loss) (U.S. GAAP) |
366 |
(526) |
|
758 |
(714) |
|
|
|
|
|
|
Less identified items included in Net income (loss) |
|
|
|
|
|
Non-cash inventory valuation (lower of cost or market) |
- |
281 |
|
- |
- |
Subtotal of identified items |
- |
281 |
|
- |
- |
|
|
|
|
|
|
Net income (loss) excluding identified items |
366 |
(807) |
|
758 |
(714) |
Cash operating costs (cash costs)
Cash operating costs consist of (1) Production and manufacturing, (2) Selling and general and (3) 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 do not reflect the total cash expenditures of the company. 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 |
2021 |
2020 |
|
2021 |
2020 |
From Imperial's Consolidated statement of Income |
|
|
|
|
|
Total expenses |
7,576 |
4,403 |
|
14,062 |
11,348 |
Less: |
|
|
|
|
|
Purchases of crude oil and products |
4,867 |
2,115 |
|
8,754 |
6,341 |
Federal excise taxes and fuel charge |
465 |
369 |
|
869 |
820 |
Depreciation and depletion |
450 |
413 |
|
944 |
886 |
Non-service pension and postretirement benefit |
10 |
30 |
|
21 |
60 |
Financing |
13 |
17 |
|
27 |
36 |
Total cash operating costs |
1,771 |
1,459 |
|
3,447 |
3,205 |
|
|
|
|
|
|
Components of cash operating costs |
|
|
|
|
|
|
Second Quarter |
|
Six Months |
||
millions of Canadian dollars |
2021 |
2020 |
|
2021 |
2020 |
From Imperial's Consolidated statement of Income |
|
|
|
|
|
Production and manufacturing |
1,569 |
1,273 |
|
3,054 |
2,852 |
Selling and general |
200 |
183 |
|
389 |
349 |
Exploration |
2 |
3 |
|
4 |
4 |
Cash operating costs |
1,771 |
1,459 |
|
3,447 |
3,205 |
|
|
|
|
|
|
Upstream |
1,168 |
887 |
|
2,279 |
1,996 |
Downstream |
499 |
478 |
|
958 |
1,067 |
Chemicals |
68 |
67 |
|
143 |
155 |
Corporate/Eliminations |
36 |
27 |
|
67 |
(13) |
Cash operating costs |
1,771 |
1,459 |
|
3,447 |
3,205 |
Unit cash operating cost (unit cash costs)
Unit cash operating costs (unit cash costs) are calculated using total gross oil-equivalent production, and are calculated for the Upstream segment, as well as the major Upstream assets. 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.
|
Second Quarter |
||||||||||||||
|
2021 |
|
2020 |
||||||||||||
millions of Canadian dollars |
Upstream
|
Kearl |
Cold
|
Syncrude |
|
Upstream
|
Kearl |
Cold
|
Syncrude |
||||||
Production and manufacturing |
1,166 |
461 |
254 |
391 |
|
884 |
355 |
234 |
243 |
||||||
Selling and general |
- |
- |
- |
- |
|
- |
- |
- |
- |
||||||
Exploration |
2 |
- |
- |
- |
|
3 |
- |
- |
- |
||||||
Cash operating costs |
1,168 |
461 |
254 |
391 |
|
887 |
355 |
234 |
243 |
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Gross oil-equivalent production |
401 |
181 |
142 |
47 |
|
347 |
135 |
123 |
50 |
||||||
(thousands of barrels per day) |
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Unit cash operating cost ($/oeb) |
32.01 |
27.99 |
19.66 |
91.42 |
|
28.09 |
28.90 |
20.91 |
53.41 |
||||||
USD converted at the quarterly average forex |
25.93 |
22.67 |
15.92 |
74.05 |
|
20.22 |
20.81 |
15.06 |
38.46 |
||||||
2021 US |
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
|
Six Months |
||||||||||||||
|
2021 |
|
2020 |
||||||||||||
millions of Canadian dollars |
Upstream
|
Kearl |
Cold
|
Syncrude |
|
Upstream
|
Kearl |
Cold
|
Syncrude |
||||||
Production and manufacturing |
2,275 |
916 |
514 |
724 |
|
1,992 |
845 |
468 |
551 |
||||||
Selling and general |
- |
- |
- |
- |
|
- |
- |
- |
- |
||||||
Exploration |
4 |
- |
- |
- |
|
4 |
- |
- |
- |
||||||
Cash operating costs |
2,279 |
916 |
514 |
724 |
|
1,996 |
845 |
468 |
551 |
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Gross oil-equivalent production |
417 |
180 |
141 |
63 |
|
383 |
147 |
131 |
61 |
||||||
(thousands of barrels per day) |
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Unit cash operating cost ($/oeb) |
30.19 |
28.12 |
20.14 |
63.49 |
|
28.63 |
31.58 |
19.63 |
49.63 |
||||||
USD converted at the YTD average forex |
24.15 |
22.50 |
16.11 |
50.79 |
|
20.90 |
23.05 |
14.33 |
36.23 |
||||||
2021 US |
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
(a) Upstream includes Kearl, Cold Lake, Imperial's share of Syncrude and other. |
Source: Imperial
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210730005161/en/
FAQ
What were Imperial Oil's earnings for Q2 2021?
How much cash flow did Imperial Oil generate in Q2 2021?
What was the production rate for Imperial Oil in Q2 2021?
How much did Imperial Oil return to shareholders in Q2 2021?
What production increase was announced for Kearl?
