Imperial Oil announces estimated fourth quarter financial and operating results

FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2011

CALGARY, Jan. 31, 2012 /CNW/ -

  Fourth quarter   Twelve months
(millions of dollars, unless noted) 2011 2010 %   2011 2010 %
               
Net income (U.S. GAAP) 1,005 799 26   3,371 2,210 53
Net income per common share              
- assuming dilution (dollars) 1.18 0.94 26   3.95 2.59 53
               
Capital and exploration expenditures 1,178 1,065 11   4,066 4,045 1
               

Bruce March, chairman, president and chief executive officer of Imperial Oil, commented:

Imperial Oil's earnings in the fourth quarter of 2011 were $1,005 million, up 26 percent from the fourth quarter of 2010. Strong operating performance in Imperial's business segments allowed us to capture higher crude oil realizations in the Upstream and improved margins in the Downstream petroleum product markets.  Another record quarterly production at Cold Lake highlighted our consistent focus on operations excellence and production reliability.  The same focus in all areas of our business is fundamental to sustaining operating performance while advancing our company growth plans.

Earnings for the full year 2011 were $3,371 million, the second highest in our company's history and up $1,161 million or 53% from $2,210 million in 2010.

The strength of Imperial's business model and our flexibility to manage within changing business conditions continues to serve our shareholders well. We are entering the third year of our decade-long growth strategy in which we will double our total Upstream production to about 600,000 barrels per day. Capital expenditures in 2011 were $4.1 billion and were focused on advancing the construction of the Kearl oil sands project and funded from internally generated funds.


Imperial Oil is one of Canada's largest corporations and a leading member of the country's petroleum industry. The company is a major producer of crude oil and natural gas, Canada's largest petroleum refiner, a key petrochemical producer and a leading marketer with coast-to-coast supply and retail service station networks.

Fourth quarter items of interest

  • Net income was $1,005 million, compared with $799 million for the fourth quarter of 2010, an increase of 26 percent or $206 million.

  • Net income per common share on a diluted basis was $1.18, up 26 percent from the fourth quarter of 2010.

  • Cash generated from operating activities was $1,216 million, up 21 percent from the same period last year.

  • Capital and exploration expenditures of $1,178 million compared with $1,065 million in the fourth quarter of 2010.

  • Gross oil-equivalent barrels of production averaged 291,000 barrels a day versus 302,000 barrels in the same period last year with asset sales accounting for about 5,000 barrels a day.

  • With a year-end cash balance of $1.2 billion, debt net of cash at year-end was essentially zero.

  • Safety performance - Achieving a workplace where "nobody gets hurt" continues to be a priority. This past year saw a sustained improvement in contractor workforce safety performance but an increased employee incident rate, which will be the focus for improvement in 2012.

  • Cold Lake achieves record annual and quarterly production - Cold Lake established a production record in 2011, averaging 160,000 barrels a day, compared to the previous annual record of 154,000 barrels a day in 2007. The fourth quarter also represented a second consecutive record quarterly production of 162,000 barrels a day. The increase is due to contributions from new wells steamed in 2010 and 2011, increased recovery as a result of technology applications and the cyclic nature of production at Cold Lake.

  • Kearl oil sands project update - The Kearl initial development is 87 percent complete, and is progressing on schedule with expected start-up in late 2012. In response to delays in obtaining transportation permits, significant proactive efforts have been taken to successfully advance module movement to the Kearl site. Modules have been reduced in size and permits for additional U.S. interstate highway routes have been received. Re-assembly and integration into the plant facilities continues.

  • Kearl oil sands expansion project approved - The Kearl expansion project was appropriated in December for $8.9 billion and will bring on additional production of 110,000 barrels per day by late 2015. Production from both the Kearl initial development and expansion phase will increase to a total of 290,000 barrels per day with additional mining output.  Future debottlenecking of both the initial development and expansion phases will increase output to reach the regulatory capacity of 345,000 barrels a day by the end of this decade.

  • Capital and exploration expenditures - Cash generated by Imperial's businesses funded $4.1 billion of capital and exploration expenditures in 2011. This included, continued investment in the Kearl oil sands project and additional acreage acquisitions. In 2012, planned capital and exploration expenditures are expected to be about $5 billion as the company enters its third year of a decade-long strategy to invest about $35 to $40 billion in growth projects.

  • Contributed to Canadian communities - Imperial contributed $15 million to communities across Canada in 2011, with a focus on education in math and sciences, environmental and energy initiatives and Aboriginal opportunities.

Fourth quarter 2011 vs. fourth quarter 2010

The company's net income for the fourth quarter of 2011 was $1,005 million or $1.18 a share on a diluted basis, compared with $799 million or $0.94 a share for the same period last year.

Earnings in the fourth quarter were higher than the same quarter in 2010 primarily due to higher crude oil commodity prices of about $275 million, increased Cold Lake bitumen production of about $70 million and stronger downstream margins of about $65 million. These factors were partially offset by the unfavourable impacts of lower Syncrude volumes of about $100 million, increased refinery maintenance totalling about $60 million, higher royalty costs of about $55 million and lower conventional crude oil volumes of about $30 million. Fourth quarter 2011 earnings also included higher gains of $95 million on primarily Upstream natural gas asset divestments partially offset by higher share-based compensation charges of about $30 million.

Upstream net income in the fourth quarter was $771 million, $245 million higher than the same period of 2010. Earnings benefited from higher crude oil commodity prices of about $275 million and increased Cold Lake bitumen production of about $70 million. These factors were partially offset by lower Syncrude volumes of about $100 million as a result of maintenance activities, higher royalty costs due to higher commodity prices of about $55 million, and lower conventional crude oil volumes of about $30 million due to natural reservoir decline. Included in fourth quarter 2011 earnings were gains of $112 million on asset divestments, about $95 million higher than the fourth quarter of 2010.

The average price of Brent crude oil in U.S. dollars, a common benchmark for world oil markets, was $109.29 a barrel in the fourth quarter of 2011, up about 26 percent from the corresponding period last year. Increases in the company's average realizations in Canadian dollars on sales of conventional crude oil, synthetic crude oil and bitumen mirrored the same trend as Brent crude oil prices, compared to the same period last year.

Gross production of Cold Lake bitumen averaged 162 thousand barrels a day, equalling the production record achieved in the previous quarter. Cold Lake production was up ten percent from 147 thousand barrels in the same quarter last year. Increased volumes were due to contributions from new wells steamed in 2010 and 2011, increased recoveries as a result of technology applications and the cyclic nature of production at Cold Lake.

The company's share of Syncrude's gross production in the fourth quarter was 63 thousand barrels a day, versus 79 thousand barrels in the fourth quarter of 2010. Lower production was primarily the result of higher planned and unplanned maintenance activities.

Gross production of conventional crude oil averaged 20 thousand barrels a day in the fourth quarter, down from 24 thousand barrels in the fourth quarter of 2010. Lower volumes were primarily due to natural reservoir decline.

Gross production of natural gas during the fourth quarter of 2011 was 240 million cubic feet a day, down from 275 million cubic feet in the same period last year. The lower production volume was primarily a result of the impact of divested producing properties.

In the fourth quarter, the company sold its interests in shallow gas properties in the Medicine Hat, Alberta area and the Coleville-Hoosier natural gas producing property in Saskatchewan, realizing a gain of about $72 million. Natural gas production for the company's share of the properties averaged about 52 million cubic feet a day in 2010. Also in the quarter, the company recorded a gain of about $40 million from an exchange of oil sands leases with third parties.

Downstream net income was $272 million in the fourth quarter of 2011, compared with $266 million in the same period a year ago. Earnings increased primarily due to stronger overall margins of about $65 million partially offset by the unfavourable impact of higher maintenance activities on refinery operations and expenses totalling about $60 million.

Chemical net income was $11 million in the fourth quarter, compared with $25 million in the same quarter last year. Earnings in the fourth quarter were negatively impacted by lower margins for polyethylene products and lower sales volume for intermediate products partially offset by higher margins for intermediate and aromatic products.

Net income effects from Corporate and other were negative $49 million in the fourth quarter, compared with negative $18 million in the same period of 2010. Unfavourable effects were primarily due to changes in share-based compensation charges.

Cash flow generated from operating activities was $1,216 million in the fourth quarter of 2011, an increase of $212 million from the corresponding period in 2010, and in line with the earnings increase versus the fourth quarter of 2010.

Investing activities used net cash of $833 million in the fourth quarter, compared with $992 million in the same period of 2010. Cash used for property, plant and equipment additions was $1,107 million in the fourth quarter, compared with $1,045 million during the same quarter 2010. For the Upstream segment, expenditures during the quarter were primarily directed towards the advancement of the Kearl initial development and Kearl expansion oil sands projects. Other investments included advancing the Nabiye expansion project at Cold Lake, environmental and efficiency projects at Syncrude, as well as the advancement of the production pilot at Horn River and tight oil acreage acquisitions. The Downstream segment's capital expenditures were focused mainly on refinery projects to improve reliability, feedstock flexibility, energy efficiency and environmental performance. Proceeds from asset sales were $270 million in the fourth quarter, $221 million higher than the fourth quarter of 2010.

The company's cash balance was $1,202 million at December 31, 2011, up $935 million from $267 million at the end of 2010.

Full year highlights

  • Net income was $3,371 million, the second highest on record, and up from $2,210 million in 2010.

  • All three operating segments achieved their second highest earnings ever in 2011.

  • Net income per common share on a diluted basis increased to $3.95 compared to $2.59 in 2010.

  • Cash generated from operations was $4,489 million, $1,282 million higher than 2010.

  • Capital and exploration expenditures were $4,066 million, versus $4,045 million in 2010, supporting the Kearl oil sands and other growth projects.

  • Gross oil-equivalent barrels of production averaged 297,000 barrels a day, compared to 294,000 barrels a day in 2010.

  • Per-share dividends declared in 2011 totalled $0.44, up from $0.43 in 2010.


Full year 2011 vs. full year 2010

Net income in 2011 was $3,371 million or $3.95 a share on a diluted basis, versus $2,210 million or $2.59 a share in 2010.

For the full year 2011, increased earnings were primarily attributable to higher crude oil commodity prices of about $925 million, stronger industry refining margins of about $590 million and increased Cold Lake bitumen production of about $260 million. These factors were partially offset by the unfavourable impacts of higher royalty costs of about $245 million, the stronger Canadian dollar of about $205 million, and lower conventional crude oil volumes of about $150 million, about $80 million of which was due to third party pipeline reliability issues. 2011 earnings also included higher gains of about $70 million on asset divestments.

Upstream net income for the year was $2,457 million, up $693 million from 2010. Earnings increased primarily due to the impacts of higher crude oil commodity prices of about $925 million and increased Cold Lake bitumen production of about $260 million. These factors were partially offset by the unfavourable effects of higher royalty costs of about $245 million, the stronger Canadian dollar of about $150 million and lower conventional crude oil volumes of about $150 million, of which about $80 million was a result of the second and third quarter 2011 third-party pipeline issues. Included in 2011 earnings were gains of $116 million on asset divestments, about $95 million higher than 2010.

The average price of Brent crude oil in U.S. dollars, a common benchmark for Atlantic Basin oil markets, was $111.29 a barrel in 2011, up about 40 percent from the previous year. Increase in the average price of West Texas Intermediate (WTI) crude oil, a common benchmark for mid-continent North American oil markets, was limited to 19 percent due to the continued weakness in WTI crude oil markets.  Increases in the company's average realizations on sales of Canadian conventional crude oil and synthetic crude oil were in line with that of WTI. The company's average bitumen realizations in Canadian dollars in 2011 increased ten percent to $63.95 per barrel as the price spread between light crude oil and Cold Lake bitumen widened.

Gross production of Cold Lake bitumen was a record 160 thousand barrels a day this year, compared with 144 thousand barrels in the 2010. Increased volumes were due to contributions from new wells steamed in 2010 and 2011, increased recoveries as a result of technology applications and the cyclic nature of production at Cold Lake.

During the year, the company's share of gross production from Syncrude averaged 72 thousand barrels a day, in line with 73 thousand barrels in 2010.

In 2011, gross production of conventional crude oil was 18 thousand barrels a day, compared with 23 thousand barrels in 2010. Lower volumes were primarily due to third-party pipeline downtime, which reduced production at the Norman Wells field, along with natural reservoir decline.

Gross production of natural gas in 2011 was 254 million cubic feet a day, down from 280 million cubic feet in 2010. The lower production volume was primarily a result of natural reservoir decline.

In 2011, Downstream net income was $884 million, an increase of $442 million over 2010. Higher earnings were primarily due to the favourable impact of stronger industry refining margins of about $590 million. This factor was partially offset by the unfavourable impacts of higher maintenance activities on refinery operations and expenses totalling about $60 million and the stronger Canadian dollar of about $55 million. Earnings in 2010 included a gain of about $25 million from sale of non-operating assets.

Chemical net income in 2011 was $122 million, up $53 million from 2010. Improved margins for intermediate and aromatic products, lower costs due to lower planned maintenance activities and higher polyethylene sales volumes were the main contributors to the increase. These factors were partially offset by lower margins for polyethylene products.

In 2011, net income effects from Corporate and other were negative $92 million, compared with negative $65 million in 2010. Unfavourable effects were primarily due to changes in share-based compensation charges.

Key financial and operating data follow.

Forward-Looking Statements

Statements in this report relating to future plans, projections, events or conditions are forward-looking statements. Actual future results, including project plans, costs, timing and capacities; financing sources; the resolution of contingencies and uncertain tax positions; the effect of changes in prices and other market conditions; and environmental and capital expenditures could differ materially depending on a number of factors, such as the outcome of commercial negotiations; changes in the supply of and demand for crude oil, natural gas, and petroleum and petrochemical products; political or regulatory events; and other factors discussed in Item 1A of the company's 2010 Form 10K.

IMPERIAL OIL LIMITED
FOURTH QUARTER 2011
                   
                   
    Fourth Quarter   Twelve Months
millions of Canadian dollars, unless noted   2011   2010   2011   2010
                   
Net Income (U.S. GAAP)                
  Total revenues and other income   8,124   6,936   30,714   25,092
  Total expenses   6,860   5,883   26,308   22,138
  Income before income taxes   1,264   1,053   4,406   2,954
  Income taxes   259   254   1,035   744
  Net income   1,005   799   3,371   2,210
                   
  Net income per common share (dollars)   1.19   0.95   3.98   2.61
  Net income per common share - assuming dilution (dollars)   1.18   0.94   3.95   2.59
                   
Other Financial Data
  Federal excise tax included in operating revenues    335   345   1,320   1,316
                   
  Gain/(loss) on asset sales, after tax   134   30   153   80
                   
  Total assets at December 31           25,429   20,580
                   
  Total debt at December 31           1,207   756
  Interest coverage ratio - earnings basis                
      (times covered)               260.2   370.3
                   
  Other long-term obligations at December 31           3,876   2,753
                   
    Shareholders' equity at December 31             13,321   11,177
    Capital employed at December 31             14,556   11,966
  Return on average capital employed (a)                
      (percent)           25.4   20.5
                       
  Dividends on common stock                
    Total   93   93   373   364
    Per common share (dollars)   0.11   0.11   0.44   0.43
                   
  Millions of common shares outstanding                
      At December 31             847.6   847.6
      Average - assuming dilution   852.6   853.6   853.6   854.2
                     
                     
(a) Return on capital employed is the net income excluding after-tax cost of financing, divided by the average of beginning and ending capital employed.

 

 

IMPERIAL OIL LIMITED
FOURTH QUARTER 2011
                   
                   
      Fourth Quarter   Twelve Months
millions of Canadian dollars   2011   2010   2011   2010
                   
Total cash and cash equivalents at period end   1,202   267   1,202   267
                   
Net income   1,005   799   3,371   2,210
Adjustment for non-cash items:                
  Depreciation and depletion   194   186   764   747
  (Gain)/loss on asset sales   (174)   (37)   (197)   (95)
  Deferred income taxes and other   98   97   71   152
Changes in operating assets and liabilities   93   (41)   480   193
Cash flows from (used in) operating activities   1,216   1,004   4,489   3,207
                   
Cash flows from (used in) investing activities   (833)   (992)   (3,593)   (3,709)
  Proceeds from asset sales   270   49   314   144
                   
Cash flows from (used in) financing activities   (101)   204   39   256
                   
                   

 

IMPERIAL OIL LIMITED
FOURTH QUARTER 2011
                   
                   
      Fourth Quarter   Twelve Months
millions of Canadian dollars   2011   2010   2011   2010
                   
Net income (U.S. GAAP)                
  Upstream   771   526   2,457   1,764
  Downstream   272   266   884   442
  Chemical   11   25   122   69
  Corporate and other   (49)   (18)   (92)   (65)
  Net income   1,005   799   3,371   2,210
                   
Revenues and other income                
  Upstream   2,766   2,159   9,906   8,144
  Downstream   6,975   6,027   26,756   21,619
  Chemical   360   358   1,641   1,386
  Eliminations/Other   (1,977)   (1,608)   (7,589)   (6,057)
  Total   8,124   6,936   30,714   25,092
                   
Purchases of crude oil and products                 
  Upstream   976   707   3,581   2,692
  Downstream   5,630   4,698   21,642   17,169
  Chemical   282   255   1,222   1,009
  Eliminations   (1,980)   (1,608)   (7,598)   (6,059)
  Purchases of crude oil and products   4,908   4,052   18,847   14,811
                   
Production and manufacturing expenses                
  Upstream   662   608   2,484   2,375
  Downstream   352   334   1,451   1,413
  Chemical   46   52   179   209
  Eliminations   -   (1)   -   (1)
  Production and manufacturing expenses   1,060   993   4,114   3,996
                   
Capital and exploration expenditures                
  Upstream   1,127   1,006   3,880   3,844
  Downstream   46   55   166   184
  Chemical   1   1   4   10
  Corporate and other   4   3   16   7
  Capital and exploration expenditures   1,178   1,065   4,066   4,045
                   
  Exploration expenses charged to income included above   16   20   92   191
                   

 

IMPERIAL OIL LIMITED
FOURTH QUARTER 2011
                   
                   
Operating statistics   Fourth Quarter   Twelve Months
      2011   2010   2011   2010
                   
Gross crude oil and Natural Gas Liquids (NGL) production                
(thousands of barrels a day)                
  Cold Lake   162   147   160   144
  Syncrude   63   79   72   73
  Conventional   20   24   18   23
  Total crude oil production   245   250   250   240
  NGLs available for sale   6   6   5   7
  Total crude oil and NGL production   251   256   255   247
                   
Gross natural gas production (millions of cubic feet a day)   240   275   254   280
                   
Gross oil-equivalent production (a)                
(thousands of oil-equivalent barrels a day)   291   302   297   294
                   
Net crude oil and NGL production (thousands of barrels a day)                
  Cold Lake   123   116   120   115
  Syncrude   60   73   67   67
  Conventional   15   18   13   17
  Total crude oil production   198   207   200   199
  NGLs available for sale   4   4   4   5
  Total crude oil and NGL production   202   211   204   204
      -       -    
Net natural gas production (millions of cubic feet a day)   226   252   228   254
                   
Net oil-equivalent production (a)                
(thousands of oil-equivalent barrels a day)   240   253   242   246
                   
Cold Lake blend sales (thousands of barrels a day)   212   190   209   188
NGL Sales (thousands of barrels a day)     10   7   9   10
Natural gas sales (millions of cubic feet a day)     227   270   237   264
                   
Average realizations (Canadian dollars)                
  Conventional crude oil realizations (a barrel)   89.06   74.14   85.22   71.64
  NGL realizations (a barrel)   60.15   58.94   59.08   50.09
  Natural gas realizations (a thousand cubic feet)   3.25   3.60   3.59   4.04
  Synthetic oil realizations (a barrel)   104.82   84.31   101.43   80.63
  Bitumen realizations (a barrel)   72.83   58.91   63.95   58.36
                   
Refinery throughput (thousands of barrels a day)   433   467   430   444
Refinery capacity utilization (percent)   85   93   85   88
                   
Petroleum product sales (thousands of barrels a day)                
  Gasolines (Mogas)   224   226   220   218
  Heating, diesel and jet fuels (Distilates)   156   177   157   153
  Heavy fuel oils (HFO)   37   29   29   28
  Lube oils and other products (Other)   36   41   41   43
  Net petroleum products sales   453   473   447   442
                   
Petrochemical Sales (thousands of tonnes)   238   223   1,016   959
                   
                   
(a) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels      


IMPERIAL OIL LIMITED
FOURTH QUARTER 2011
                   
                   
              Net income
      Net income (U.S. GAAP)       per common share
      (millions of Canadian dollars)       (dollars)
                   
2007                
First Quarter   774           0.82
Second Quarter   712           0.76
Third Quarter   816           0.88
Fourth Quarter   886           0.97
Year   3,188           3.43
                   
                   
2008                
First Quarter   681           0.76
Second Quarter   1,148           1.29
Third Quarter   1,389           1.57
Fourth Quarter   660           0.77
Year   3,878           4.39
                   
                   
2009                
First Quarter   289           0.34
Second Quarter   209           0.25
Third Quarter   547           0.64
Fourth Quarter   534           0.63
Year   1,579           1.86
                   
                   
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

 


 

 

 

 

SOURCE Imperial Oil Limited

For further information:

403-237-2710


FORFAITS PERSONNALISÉS

Jetez un coup d’œil sur nos forfaits personnalisés ou créez le vôtre selon vos besoins de communication particuliers.

Commencez dès aujourd'hui .

ADHÉSION À CNW

Remplissez un formulaire d'adhésion à CNW ou communiquez avec nous au 1-877-269-7890.

RENSEIGNEZ-VOUS SUR LES SERVICES DE CNW

Demandez plus d'informations sur les produits et services de CNW ou communiquez avec nous au 1‑877-269-7890.