Imperial Oil announces estimated first-quarter financial and operating
results

CALGARY, April 28 /CNW/ -

    
                                                    -------------------------
                                                          First Quarter
                                                    -------------------------
    (millions of dollars, unless noted)               2010     2009        %
    -------------------------------------------------------------------------
    Net income (U.S. GAAP)                             476      289       65
    Net income per common share
    - assuming dilution (dollars)                     0.56     0.33       70

    Capital and exploration expenditures               900      494       82
    

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

"Net income for the first quarter was $476 million, an increase of 65 percent from the first quarter of 2009. Upstream earnings increased with stronger crude oil commodity prices that were partially offset by higher royalty costs and the unfavourable foreign exchange effects of a stronger Canadian dollar. Downstream earnings were impacted by the ongoing challenges in North American economies that resulted in continued soft demands and lower margins.

Imperial Oil continued its long-term focus and disciplined approach to capital investment. In the first quarter of 2010, we continued to invest through this down cycle and add value for our shareholders. Capital and exploration expenditures increased to $900 million in the quarter and supported company growth projects like Kearl, continued exploration of promising shale gas acreage in Horn River and sustaining capital for Cold Lake and Syncrude production. For this quarter, Imperial's cash generation from operating activities was enough to fund the company growth and we ended with a cash balance higher than what we had coming into the year.

Our proven approach of focusing on operations excellence and the business elements within our control will continue to reward our shareholders in the future."

    
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    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 and a
    leading marketer with a coast-to-coast supply network that includes about
    1,850 retail service stations.
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    First quarter items of interest

    -   Net income was $476 million, an increase of 65% or $187 million from
        the first quarter of 2009.

    -   Net income per common share was $0.56, an increase of 70% from the
        first quarter of 2009.

    -   Cash flow generated from operating activities was $914 million,
        compared with cash flow used in operating activities of $296 million
        in the same period last year.

    -   Capital and exploration expenditures were $900 million, up 82 percent
        from the first quarter of 2009.

    -   Gross oil-equivalent barrels of production averaged 291,000 barrels a
        day, compared with 302,000 barrels a day in the same period last
        year. Lower production volumes in the first quarter were primarily
        due to expected decline from conventional oil and natural gas assets.

    -   Kearl oil sands project update - About 2,000 employees and
        contractors are working on the project. Current construction
        activities include work on piling, foundations and starter dike at
        the Kearl site along with vessel and pipe fabrication. The Kearl
        project will be developed in phases and will ultimately produce more
        than 300,000 barrels a day of bitumen before royalties.

    -   Horn River update - Imperial advanced its second winter season
        drilling program at the Horn River shale gas play in northeast B.C.
        The company also added an additional 1,000 acres, bringing its joint
        venture holdings to 310,000 net acres - one of industry's largest
        acreage positions in the area.

    -   Mackenzie natural gas project update - at the National Energy Board's
        request, Imperial submitted comments on recommended measures
        contained in the Joint Review Panel's report for the proposed
        project. Final argument hearings were completed in April, with a
        regulatory decision from the National Energy Board expected in
        September 2010.

    -   Construction of Dartmouth refinery's sulphur recovery plant complete
        - the first phase of a two-part sulphur recovery project has been
        completed. The first project phase achieved excellent safety
        performance and was completed on time and on budget. The second phase
        involves the construction of a new sour water stripper and will be
        completed by the end of 2010. The entire project will reduce
        emissions by 25 percent and increase sulphur recovery to 98 percent.

    -   Horn River Basin Producers Group receives CAPP's 2010 Steward of
        Excellence Award for Social Performance - The award was given in
        recognition of the group's work on facilitating open communication
        with stakeholders, mitigating environmental challenges and maximizing
        benefits in the area. Imperial is a founding member of the Producers
        Group. See the Environment & Community section at www.capp.ca for
        more information about the award.

    -   Responsible development - in March, Imperial Oil Resources and Ducks
        Unlimited Canada signed a $720,000 partnership that will focus on
        wetland inventory and research in Imperial's operational area around
        Cold Lake and northeast B.C. This knowledge will be used to guide
        future development planning and minimize wetland disturbance, and to
        evaluate and establish land use best practices.
    

First quarter 2010 vs. first quarter 2009

The company's net income for the first quarter of 2010 was $476 million or $0.56 a share on a diluted basis, compared with $289 million or $0.33 a share for the same period last year.

Earnings in the first quarter were higher than the same quarter in 2009, as higher Upstream earnings were partially offset by lower Downstream earnings. In the Upstream, earnings increased primarily due to the impact of higher crude oil commodity prices of about $550 million, partially offset by higher royalty costs due to higher commodity prices of about $180 million and the unfavourable foreign exchange effects of a higher Canadian dollar of about $100 million. Lower Downstream earnings were primarily due to lower margins of about $125 million.

Upstream net income in the first quarter was $444 million, $302 million higher than the same period of 2009. Higher crude oil commodity prices in the first quarter of 2010 increased revenues, contributing to higher earnings of about $550 million. This positive earnings factor was partially offset by higher royalties due to higher commodity prices of about $180 million and the unfavourable foreign exchange effects of a higher Canadian dollar of about $100 million.

The average price of Brent crude oil in U.S. dollars, a common benchmark for world oil markets, at $76.32 a barrel, in the first quarter, increased about 72 percent from the same quarter last year. The company's average realizations on sales of Canadian conventional crude oil also increased. Prices for Canadian heavier crude oil were also higher along with the lighter crude oil. The company's average bitumen realizations were favourably impacted by the lower spread between light and heavy crude oils in world markets, compared to the same quarter last year.

Gross production of Cold Lake bitumen returned to expected levels and averaged 148 thousand barrels a day during the first quarter, unchanged from the same quarter last year.

The company's share of Syncrude's gross production in the first quarter was 67 thousand barrels a day, slightly lower than 68 thousand barrels during the same period a year ago. Volumes in the first quarter of 2010 were impacted by the advancement of planned maintenance activities originally scheduled for later in the year. The maintenance activities were completed, and the impacted operating units returned to normal operations in the quarter.

In the first quarter, gross production of conventional crude oil averaged 24 thousand barrels a day, down from 26 thousand barrels in the same period last year, due to natural reservoir decline.

Gross production of natural gas during the first quarter of 2010 decreased to 273 million cubic feet a day from 307 million cubic feet in the same period last year. Lower production was primarily due to maintenance activities and natural reservoir decline.

Net income from Downstream was $39 million in the first quarter of 2010, compared with $202 million in the same period a year ago. Earnings were lower in the quarter mainly due to lower overall margins of about $125 million. Earnings were also negatively impacted by the unfavourable foreign exchange effects of a higher Canadian dollar of about $30 million and higher costs associated with planned maintenance activities in the first quarter of 2010.

Net income from Chemical was negative $1 million in the first quarter, compared with $3 million in the same quarter last year. Higher costs associated with planned maintenance activities on the Sarnia ethylene cracker in the first quarter of 2010 more than offset improvements in industry margins.

Net income effects from Corporate and other were negative $6 million in the first quarter, compared with negative $58 million in the same period of 2009. Favourable earnings effects were primarily due to lower share-based compensation charges.

In the first quarter of 2010, cash flow of $914 million was generated from operations, and $813 million was used to fund growth projects such as Kearl. The company's balance of cash was $534 million at March 31, 2010, compared with $513 million at the end of 2009.

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 2009 Form 10K.

    
                             IMPERIAL OIL LIMITED
                              FIRST QUARTER 2010
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                                                                Three Months
    millions of Canadian dollars, unless noted                 2010     2009
    -------------------------------------------------------------------------

    Net income (U.S. GAAP)
      Total revenues and other income                         6,166    4,670
      Total expenses                                          5,515    4,268
    -------------------------------------------------------------------------
      Income before income taxes                                651      402
      Income taxes                                              175      113
    -------------------------------------------------------------------------
      Net income                                                476      289
    -------------------------------------------------------------------------

    Net income per common share (dollars)                      0.56     0.34
    Net income per common share - assuming dilution (dollars)  0.56     0.33

    Gain/(loss) on asset sales, after tax                         4        1

    Total assets at March 31                                 18,335   16,490

    Total debt at March 31                                      139      143
    Interest coverage ratio - earnings basis
      (rolling 4 quarters, times covered)                     307.1    472.3

    Other long-term obligations at March 31                   2,679    2,185

    Shareholders' equity at March 31                          9,943    8,862
    Capital employed at March 31                             10,118    9,045
    Return on average capital employed (a)
      (rolling 4 quarters, percent)                            18.4     38.7

    Dividends on common stock
      Total                                                      85       86
      Per common share (dollars)                               0.10     0.10

    Millions of common shares outstanding
      At March 31                                             847.6    848.9
      Average - assuming dilution                             854.2    862.7
    -------------------------------------------------------------------------
    (a) Return on capital employed is net income excluding after-tax cost of
        financing divided by the average rolling four quarters' capital
        employed.


    -------------------------------------------------------------------------
                                                                Three Months
    millions of Canadian dollars                               2010     2009
    -------------------------------------------------------------------------

    Total cash and cash equivalents at period end               534      755

    Net income                                                  476      289
    Adjustment for non-cash items:
      Depreciation and depletion                                182      197
      (Gain)/loss on asset sales                                 (4)      (1)
      Deferred income taxes and other                             2       28
    Changes in operating assets and liabilities               258(a)    (809)
    -------------------------------------------------------------------------
    Cash from (used in) operating activities                    914     (296)
    -------------------------------------------------------------------------

    Cash from (used in) investing activities                   (807)    (407)
      Proceeds from asset sales                                   6        2

    Cash from (used in) financing activities                    (86)    (516)
    -------------------------------------------------------------------------

    (a) First quarter 2010 cash flow from operating activities was positively
        impacted by higher payable balances due to timing of expenditures and
        timing of scheduled income tax payments.



    -------------------------------------------------------------------------
                                                                Three Months
    millions of Canadian dollars                               2010     2009
    -------------------------------------------------------------------------

    Net income (U.S. GAAP)
      Upstream                                                  444      142
      Downstream                                                 39      202
      Chemical                                                   (1)       3
      Corporate and other                                        (6)     (58)
    -------------------------------------------------------------------------
      Net income                                                476      289
    -------------------------------------------------------------------------

    Total revenues
      Upstream                                                2,209    1,420
      Downstream                                              5,192    4,083
      Chemical                                                  353      272
      Eliminations/Other                                     (1,588)  (1,105)
    -------------------------------------------------------------------------
      Revenues                                                6,166    4,670
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    Purchases of crude oil and products
      Upstream                                                  787      364
      Downstream                                              4,187    2,867
      Chemical                                                  276      199
      Eliminations                                           (1,589)  (1,110)
    -------------------------------------------------------------------------
      Purchases of crude oil and products                     3,661    2,320
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    Production and manufacturing expenses
      Upstream                                                  602      646
      Downstream                                                370      336
      Chemical                                                   58       48
    -------------------------------------------------------------------------
      Production and manufacturing expenses                   1,030    1,030
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    Capital and exploration expenditures
      Upstream                                                  855      447
      Downstream                                                 38       42
      Chemical                                                    6        4
      Corporate and other                                         1        1
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      Capital and exploration expenditures                      900      494
    -------------------------------------------------------------------------

      Exploration expenses charged to income included above      87       83
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    -------------------------------------------------------------------------
    Operating statistics                                        Three Months
                                                               2010     2009
    -------------------------------------------------------------------------

    Gross crude oil and Natural Gas Liquids (NGL) production
    (thousands of barrels a day)
      Cold Lake                                                 148      148
      Syncrude                                                   67       68
      Conventional                                               24       26
    -------------------------------------------------------------------------
      Total crude oil production                                239      242
      NGLs available for sale                                     6        9
    -------------------------------------------------------------------------
      Total crude oil and NGL production                        245      251
    -------------------------------------------------------------------------

    Gross natural gas production
     (millions of cubic feet a day)                             273      307

    Gross oil-equivalent production (a)
    (thousands of oil-equivalent barrels a day)                 291      302

    Net crude oil and NGL production
     (thousands of barrels a day)
      Cold Lake                                                 118      141
      Syncrude                                                   60       70
      Conventional                                               17       23
    -------------------------------------------------------------------------
      Total crude oil production                                195      234
      NGLs available for sale                                     5        6
    -------------------------------------------------------------------------
      Total crude oil and NGL production                        200      240
    -------------------------------------------------------------------------

    Net natural gas production (millions of cubic feet a day)   237      262

    Net oil-equivalent production (a)
    (thousands of oil-equivalent barrels a day)                 240      284

    Cold Lake blend sales (thousands of barrels a day)          201      198
    NGL Sales (thousands of barrels a day)                       12       12
    Natural gas sales (millions of cubic feet a day)            264      277

    Average realizations (Canadian dollars)
      Conventional crude oil realizations (a barrel)          74.54    46.61
      NGL realizations (a barrel)                             55.53    41.20
      Natural gas realizations (a thousand cubic feet)         5.20     5.82
      Synthetic oil realizations (a barrel)                   82.24    55.67
      Bitumen realizations (a barrel)                         62.25    35.00

    Refinery throughput (thousands of barrels a day)            439      460
    Refinery capacity utilization (percent)                      87       92

    Petroleum product sales (thousands of barrels a day)
      Gasolines                                                 204      190
      Heating, diesel and jet fuels                             145      158
      Heavy fuel oils                                            33       31
      Lube oils and other products                               39       36
    -------------------------------------------------------------------------
      Net petroleum products sales                              421      415
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    Petrochemical Sales (thousands of tonnes a day)             2.7      2.7
    -------------------------------------------------------------------------

    (a) Gas converted to oil-equivalent at 6 million cubic feet equals
        1 thousand barrels



    -------------------------------------------------------------------------
                                                                 Net income
                                    Net income (U.S. GAAP)   per common share
                            (millions of Canadian dollars)       (dollars)
    -------------------------------------------------------------------------

    2006
    First Quarter                                     591               0.60
    Second Quarter                                    837               0.85
    Third Quarter                                     822               0.84
    Fourth Quarter                                    794               0.83
    -------------------------------------------------------------------------
    Year                                            3,044               3.12
    -------------------------------------------------------------------------

    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
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To view the graph "Factors affecting net income", please visit http://files.newswire.ca/57/Imperial.jpg

SOURCE Imperial Oil Limited

For further information: For further information: Investor relations: Mark Stumpf, (403) 237-4537; Media relations: Gordon Wong, (403) 237-2710


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