Imperial Oil announces estimated fourth-quarter financial and operating
results
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Fourth Quarter Twelve Months
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(millions of dollars,
unless noted) 2009 2008 % 2009 2008 %
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Net income (U.S. GAAP) 534 660 (19) 1,579 3,878 (59)
Net income per common share
- assuming dilution (dollars) 0.62 0.76 (18) 1.84 4.36 (58)
Capital and exploration
expenditures 834 433 93 2,438 1,363 79
"Lower oil and natural gas prices and low demand for energy products continued to create challenging business conditions. Despite the ongoing economic downturn, Imperial continued to progress our company growth projects and delivered strong results.
Net income for the fourth quarter was
With our strong balance sheet, minimal debt, and long-term disciplined approach, we are well positioned to continue to invest through the business cycle. In the fourth quarter, capital and exploration expenditures increased to
Our disciplined and long-term focused investment approach will continue to reward our shareholders. In 2009, Imperial distributed a total of
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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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Fourth quarter highlights
- Net income was $534 million, versus $660 million for the
fourth quarter of 2008.
- Net income per common share was $0.62, versus $0.76 for the
fourth quarter of 2008.
- Cash flow from operating activities was $927 million, compared with
$912 million in the same period last year.
- Capital and exploration expenditures were $834 million, up 93 percent
from the fourth quarter of 2008.
- Gross oil-equivalent barrels of production averaged 297,000 barrels a
day, compared with 309,000 barrels a day in the same period last
year. Lower production volumes in the fourth quarter were primarily
due to well repairs in the northern part of the Cold Lake field.
Drilling and steaming activities have since resumed in this area, and
production is expected to return to normal levels.
- Achieved record safety performance - Imperial achieved its best-ever
safety results for both employees and contractors in 2009. This
achievement was an outcome of the significant commitment of the
entire organization, and reflects Imperial's focus on operational
excellence.
- Advanced Kearl - infrastructure construction and plant site
preparation activities continued at the Kearl oil sands mining
project, with a workforce of about 2,500 employees and contractors at
year end. The Kearl project has a total estimated recoverable
resource of 4.6 billion barrels of bitumen before royalties - in
which Imperial holds a 71-percent interest.
- Strengthened position in the oil sands - utilizing its strong balance
sheet, Imperial, in a 50-50 joint venture with ExxonMobil Canada,
acquired oil sands mining leases from UTS Energy Corporation totaling
a combined 16,600 net acres in Alberta's Athabasca region. The new
leases are adjacent to existing undeveloped oil sands acreage held by
Imperial in the area.
- Progressed exploration at Horn River - Imperial commenced its second
winter season exploration program at Horn River in northeast British
Columbia and is expected to drill up to 11 shale gas wells. Imperial,
together with ExxonMobil Canada (50-50 interest), now holds 309,000
net acres in the area, industry's largest land position in the basin.
- Update on Mackenzie natural gas project - the Joint Review Panel
released its report on the environmental, social and cultural impacts
of the Mackenzie natural gas project, with the final regulatory
decision expected in September 2010 from the National Energy Board.
- Investing through the down cycle on major growth projects - completed
a $2.4 billion capital and exploration program in 2009, focused on
advancing major Upstream projects as well as investments in
environmental initiatives. Planned capital and exploration
expenditures in 2010 are $3.2 billion.
- Contributed to Canadian communities - Imperial contributed
$23 million to Canadian communities in 2009, including $2 million
towards math and science education. Special contributions in the
fourth quarter included a $1 million commitment to the University of
Calgary's School of Public Policy and an $8 million aircraft to the
Southern Alberta Institute of Technology for use in its School of
Transportation's aircraft maintenance, avionics and structures
programs.
Fourth quarter 2009 vs. fourth quarter 2008
Net income for the fourth quarter of 2009 was
Upstream net income in the fourth quarter was
The average price of Brent crude oil in U.S. dollars, a common benchmark for world oil markets, strengthened in the fourth quarter, averaging
Prices for Canadian heavier crude oil also increased along with the lighter crude oil. The company's average realizations for Cold Lake bitumen increased about 70 percent in the fourth quarter, compared to the corresponding period last year, reflecting the narrowing price spread between light crude oil and Cold Lake bitumen.
The company's average realizations for natural gas averaged
Gross production of Cold Lake bitumen averaged 134 thousand barrels a day during the fourth quarter, versus 146 thousand barrels in the same quarter last year. Lower production volumes in the fourth quarter were due to well repairs in the northern part of the field. Drilling and steaming activities have since resumed in this area, and production is expected to return to normal levels.
The company's share of Syncrude's gross production in the fourth quarter was 82 thousand barrels a day, versus 77 thousand barrels in the fourth quarter of 2008. Volumes in the fourth quarter were higher than the same period in 2008 due to lower maintenance activities.
In the fourth quarter, gross production of conventional crude oil averaged 24 thousand barrels a day, compared with 27 thousand barrels in the corresponding period in 2008. The natural reservoir decline in the Western Canadian Basin was the main reason for the reduced production.
Gross production of natural gas during the fourth quarter of 2009 was 298 million cubic feet a day, essentially the same as the corresponding period last year.
Net income from Downstream was
Net income from Chemical was
Net income effects from Corporate and other were negative
In the fourth quarter of 2009, cash flow of
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Full year highlights
- Net income was $1,579 million, down from $3,878 million in 2008.
- Net income per common share decreased to $1.84 compared to $4.36
in 2008.
- Cash flow from operations was $1,591 million, versus $4,263 million
in 2008.
- Capital and exploration expenditures were $2,438 million, up
79 percent.
- Gross oil-equivalent barrels of production averaged 293 thousands of
barrels per day, compared to 308 thousands of barrels per day
in 2008.
- Imperial distributed a total of $833 million cash to shareholders in
2009 through dividends and share repurchases, compared with
$2,540 million in 2008.
- Per-share dividends paid in 2009 totaled $0.40, up from $0.37
in 2008.
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Full year 2009 vs. full year 2008
Net income for the full year of 2009 was
Upstream net income for the year was
The average price of Brent crude oil in U.S. dollars, a common benchmark for world oil markets, at
Prices for Canadian heavier crude oil also declined along with the lighter crude oil. The company's average realizations for Cold Lake bitumen fell about 25 percent for the full year in 2009, compared to 2008, reflecting the narrowing price spread between light crude oil and Cold Lake bitumen.
In 2009, realizations for natural gas averaged
For the full year, gross production of Cold Lake bitumen was 141 thousand barrels a day this year, compared with 147 thousand barrels in 2008. Lower production volumes in 2009 were due to the cyclic nature of production at Cold Lake and well repairs in the northern part of the field. Drilling and steaming activities have since resumed in this area, and production is expected to return to normal levels.
During 2009, the company's share of gross production from Syncrude averaged 70 thousand barrels a day, compared with 72 thousand barrels in 2008. Planned maintenance activities in the first half of 2009, which included design modifications to improve long-term operational performance, contributed to the reduced production for the full year in 2009.
Gross production of conventional crude oil averaged 25 thousand barrels a day in 2009, compared with 27 thousand barrels in 2008. The natural reservoir decline in the Western Canadian Basin was the main reason for the reduced production.
In the year, gross production of natural gas was 295 million cubic feet a day, down from 310 million cubic feet in 2008. The lower production volume was primarily a result of natural reservoir decline.
Net income from Downstream was
Net income from Chemical was
For the full year, net income effects from Corporate and other were negative
During 2009, share repurchases were reduced to about 12 million shares for
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 2008 Form 10K.
IMPERIAL OIL LIMITED
FOURTH QUARTER 2009
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Fourth Quarter Twelve Months
millions of Canadian dollars,
unless noted 2009 2008 2009 2008
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Net income (U.S. GAAP)
Total revenues and other
income 5,864 5,942 21,398 31,579
Total expenses 5,119 5,171 19,198 26,303
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Income before income taxes 745 771 2,200 5,276
Income taxes 211 111 621 1,398
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Net income 534 660 1,579 3,878
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Net income per common share
(dollars) 0.63 0.77 1.86 4.39
Net income per common share
- assuming dilution (dollars) 0.62 0.76 1.84 4.36
Gain/(loss) on asset sales,
after tax 12 5 38 209
Total assets at December 31 17,473 17,035
Total debt at December 31 140 143
Interest coverage ratio - earnings
basis
(times covered) 276.0 480.6
Other long-term obligations at
December 31 2,839 2,254
Shareholders' equity at
December 31 9,439 9,065
Capital employed at December 31 9,615 9,248
Return on average capital
employed (a)
(percent) 16.8 44.7
Dividends on common stock
Total 85 85 340 334
Per common share (dollars) 0.10 0.10 0.40 0.38
Millions of common shares
outstanding
At December 31 847.6 859.4
Average - assuming dilution 854.0 871.7 856.7 889.0
(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.
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IMPERIAL OIL LIMITED
FOURTH QUARTER 2009
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Fourth Quarter Twelve Months
millions of Canadian dollars 2009 2008 2009 2008
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Total cash and cash equivalents
at period end 513 1,974 513 1,974
Net income 534 660 1,579 3,878
Adjustment for non-cash items:
Depreciation and depletion 197 178 781 728
(Gain)/loss on asset sales (13) (5) (45) (241)
Deferred income taxes and other (12) 492 (61) 387
Changes in operating assets
and liabilities 221(a) (413) (663) (489)
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Cash from (used in) operating
activities 927 912 1,591 4,263
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Cash from (used in) investing
activities (785) (380) (2,216) (961)
Proceeds from asset sales 22 12 67 272
Cash from (used in) financing
activities (87) (491) (836) (2,536)
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(a) Fourth quarter 2009 cash flow from operating activities was
positively impacted by the timing of scheduled income tax payments
and lower inventory.
IMPERIAL OIL LIMITED
FOURTH QUARTER 2009
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Fourth Quarter Twelve Months
millions of Canadian dollars 2009 2008 2009 2008
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Net income (U.S. GAAP)
Upstream 491 336 1,324 2,923
Downstream 52 257 278 796
Chemical 16 28 46 100
Corporate and other (25) 39 (69) 59
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Net income 534 660 1,579 3,878
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Total revenues by segment
Upstream 2,025 1,721 6,919 11,240
Downstream 5,019 5,311 18,381 27,212
Chemical 336 331 1,236 1,833
Eliminations/Other (1,516) (1,421) (5,138) (8,706)
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Revenues 5,864 5,942 21,398 31,579
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Purchases of crude oil and
products by segment
Upstream 624 515 2,024 3,995
Downstream 4,002 4,021 14,164 22,223
Chemical 248 228 898 1,401
Eliminations (1,517) (1,434) (5,152) (8,754)
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Purchases of crude oil
and products 3,357 3,330 11,934 18,865
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Production and manufacturing
expenses
Upstream 560 642 2,385 2,569
Downstream 323 355 1,372 1,452
Chemical 52 49 194 208
Eliminations - (1) - (1)
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Production and manufacturing
expenses 935 1,045 3,951 4,228
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Capital and exploration
expenditures
Upstream 745 355 2,167 1,110
Downstream 84 70 251 232
Chemical 3 6 15 13
Corporate and other 2 2 5 8
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Capital and exploration
expenditures 834 433 2,438 1,363
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Exploration expenses charged
to income included above 27 41 153 132
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IMPERIAL OIL LIMITED
FOURTH QUARTER 2009
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Operating statistics Fourth Quarter Twelve Months
2009 2008 2009 2008
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Gross crude oil and Natural
Gas Liquids (NGL) production
(thousands of barrels a day)
Cold Lake 134 146 141 147
Syncrude 82 77 70 72
Conventional 24 27 25 27
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Total crude oil production 240 250 236 246
NGLs available for sale 7 9 8 10
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Total crude oil and NGL
production 247 259 244 256
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Gross natural gas production
(millions of cubic feet a day) 298 297 295 310
Gross oil-equivalent production(a)
(thousands of oil-equivalent
barrels a day) 297 309 293 308
Net crude oil and NGL production
(thousands of barrels a day)
Cold Lake 107 129 120 124
Syncrude 73 68 65 62
Conventional 18 20 20 19
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Total crude oil production 198 217 205 205
NGLs available for sale 6 7 6 8
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Total crude oil and NGL
production 204 224 211 213
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Net natural gas production
(millions of cubic feet a day) 264 239 274 249
Net oil-equivalent production (a)
(thousands of oil-equivalent
barrels a day) 248 264 257 255
Cold Lake blend sales
(thousands of barrels a day) 174 190 184 191
NGL Sales
(thousands of barrels a day) 12 13 10 11
Natural gas sales
(millions of cubic feet a day) 277 291 272 288
Average realizations and prices
(Canadian dollars)
Conventional crude oil
realizations (a barrel) 69.92 56.75 60.32 95.76
NGL realizations (a barrel) 48.15 43.61 41.19 59.35
Natural gas realizations
(a thousand cubic feet) 4.23 7.31 4.11 8.69
Syncrude realizations
(a barrel) 78.64 69.21 69.69 106.61
Western Canada Select
heavy oil (a barrel) 67.68 47.73 58.67 82.96
Refinery throughput
(thousands of barrels a day) 412 441 413 446
Refinery capacity utilization
(percent) 82 88 82 89
Petroleum product sales
(thousands of barrels a day)
Gasolines 200 204 200 204
Heating, diesel and jet fuels 142 158 143 157
Heavy fuel oils 31 32 27 30
Lube oils and other products 42 54 39 47
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Net petroleum products sales 415 448 409 438
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Petrochemical Sales
(thousands of tonnes a day) 2.9 2.2 2.8 2.8
(a) Gas converted to oil-equivalent at 6 million cubic feet =
1 thousand barrels
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IMPERIAL OIL LIMITED
FOURTH QUARTER 2009
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Net income
Net income (U.S. GAAP) per common share
(millions of Canadian dollars) (dollars)
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2005
First Quarter 393 0.38
Second Quarter 539 0.52
Third Quarter 652 0.64
Fourth Quarter 1,016 1.00
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Year 2,600 2.54
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2006
First Quarter 591 0.60
Second Quarter 837 0.85
Third Quarter 822 0.84
Fourth Quarter 794 0.83
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Year 3,044 3.12
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2007
First Quarter 774 0.82
Second Quarter 712 0.76
Third Quarter 816 0.88
Fourth Quarter 886 0.97
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Year 3,188 3.43
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2008
First Quarter 681 0.76
Second Quarter 1,148 1.29
Third Quarter 1,389 1.57
Fourth Quarter 660 0.77
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Year 3,878 4.39
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2009
First Quarter 289 0.34
Second Quarter 209 0.25
Third Quarter 547 0.64
Fourth Quarter 534 0.63
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Year 1,579 1.86
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To view the graph "Factors affecting net income", please visit http://files.newswire.ca/706/Q4_2010_graphs.jpg
For further information: Investor relations: Mark Stumpf, (403) 237-4537; Media relations: Pius Rolheiser, (403) 237-2663
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