Imperial Oil announces first-quarter financial and operating results



    CALGARY, May 1 /CNW/ - Imperial Oil today announced net income for the
first quarter of 2008 of $681 million or $0.75 a share, compared with
$774 million or $0.81 a share for the same period last year.
    Earnings in the first quarter were lower than the same quarter of 2007 as
higher Upstream earnings were more than offset by lower Downstream earnings.
In the Upstream, higher crude oil and natural gas commodity prices were
partially offset by the negative impacts of lower conventional volumes from
expected reservoir decline, lower Syncrude volumes, higher royalties and a
stronger Canadian dollar. Earnings in the Upstream were also negatively
impacted by lower gains from asset divestments. The negative impacts of lower
overall industry refining margins, unplanned shutdown at the Strathcona
refinery and a stronger Canadian dollar contributed to lower Downstream
earnings.
    Operating revenues were $7,231 million in the first quarter, compared
with $5,767 million in the corresponding period last year. Capital and
exploration expenditures were $300 million in the first quarter, compared with
$216 million during the same quarter of 2007. During the quarter, the company
repurchased about 11 million shares for $590 million. At March 31, the
company's balance of cash and marketable securities was $590 million, compared
with $1,208 million at the end of 2007.
    "Despite a number of challenges faced during the quarter, Imperial
remains in an enviable position as we continued to add to our inventory of
high-quality development opportunities," said Bruce March, Imperial's chief
executive officer. "The combination of financial strength, technology
advantage, proven business model and superior mix of skills and assets set the
stage for continued growth in shareholder value," March added.
    Imperial Oil is one of Canada's largest corporations and a leading member
of the country's petroleum industry. It is one of the country's largest
producers of crude oil and natural gas, is the largest petroleum refiner, and
has a leading market share in petroleum products sold through a coast-to-coast
supply network that includes about 1,900 service stations.

    Highlights/Items of Interest

    Exploration parcel acquired

    In recent land sales, Imperial, together with ExxonMobil Canada, acquired
exploration rights in the natural gas prone Horn River area of northeastern
British Columbia. Since September 2007, the companies have acquired total
licence holdings of about 115,000 acres. The licences, in which the company
and ExxonMobil Canada each have a 50-percent interest, are located about 70
kilometres northeast of Fort Nelson, British Columbia.

    Kearl oil sands project - regulatory update

    In March, the Federal court ordered the joint federal and provincial
review panel that had previously granted approval for the company's proposed
Kearl oil sands project to provide rationale for the greenhouse gas emissions
aspect of its conclusions. Following this, the Federal Department of Fisheries
notified the company that a permit it had issued earlier this year for the
project had been nullified. The company is working to resolve this matter and
is continuing to advance the project including further progress in engineering
work consistent with the terms of the other permits and approvals that have
been granted.

    Imperial sells Rainbow Pipeline in northern Alberta

    In April, the company and co-owners entered into an agreement to sell
Rainbow Pipe Line Co. Ltd., in which the company has a one-third equity
interest, for about $540 million in total, subject to closing adjustments
including the sale of the crude oil line-fill currently estimated at an
additional $120 million. The transaction is expected to close in the second
quarter of 2008 subject to closing conditions and regulatory approvals.

    
                             IMPERIAL OIL LIMITED

    -------------------------------------------------------------------------
    FINANCIAL HIGHLIGHTS (unaudited)
    -------------------------------------------------------------------------

                                                               Three months
                                                               to March 31
                                                              2008      2007
                                                            -----------------
    Net income (U.S. GAAP, millions of dollars)
      Upstream                                                 650       563
      Downstream                                                30       198
      Chemical                                                  24        28
      Corporate and other                                      (23)      (15)
                                                            -----------------
    Net income (U.S. GAAP)                                     681       774
                                                            -----------------

    Cash flow from operating activities                        298       275
    Capital and exploration expenditures                       300       216

    Per-share information (dollars)
      Net income - basic                                      0.76      0.82
      Net income - diluted                                    0.75      0.81
      Dividends                                               0.09      0.08

      Share prices - close at March 31
      Toronto Stock Exchange (Canadian dollars)              53.80     42.80
      American Stock Exchange (U.S. dollars)                 52.26     37.12
    

    -------------------------------------------------------------------------
    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
    AND RESULTS OF OPERATIONS
    -------------------------------------------------------------------------

    OPERATING RESULTS
    -----------------
    The company's net income for the first quarter of 2008 was $681 million
or $0.75 a share on a diluted basis, compared with $774 million or $0.81 a
share for the same period last year.
    Earnings in the first quarter were lower than the same quarter of 2007 as
higher Upstream earnings were more than offset by lower Downstream earnings.
In the Upstream, higher crude oil and natural gas commodity prices were
partially offset by the negative impacts of lower conventional volumes from
expected reservoir decline, lower Syncrude volumes, higher royalties and a
stronger Canadian dollar. Earnings in the Upstream were also negatively
impacted by lower gains from asset divestments. The negative impacts of lower
overall industry refining margins, unplanned shutdown at the Strathcona
refinery and a stronger Canadian dollar contributed to lower Downstream
earnings.

    Upstream

    Net income from Upstream in the first quarter was $650 million,
$87 million higher than the same period in 2007. Increased earnings were
primarily due to higher crude oil and natural gas commodity prices totaling
about $600 million. Improved realizations were partially offset by the
negative impacts of lower conventional upstream volumes from expected
reservoir decline of about $120 million, lower Syncrude volumes of about $60
million, higher royalties of about $100 million and a stronger Canadian dollar
of about $110 million. Earnings were also negatively impacted by lower gains
from asset divestments of about $90 million and higher production and
exploration expenses of about $50 million.
    In U.S. dollars, both Brent crude oil prices and average Cold Lake heavy
oil realizations were higher by about 70 percent and 85 percent, respectively,
in the first quarter compared with the same quarter last year. However, the
effect of a stronger Canadian dollar dampened improvements in the company's
average realizations for conventional crude oil to 50 percent and for Cold
Lake heavy oil to about 55 percent in the first quarter of 2008.
    The company's average realizations for natural gas averaged $8.00 a
thousand cubic feet in the first quarter, up from $7.75 in the same quarter
last year.
    Total gross production of crude oil and NGLs in the first quarter was
260 thousand barrels a day, versus 266 thousand barrels in the first quarter
of 2007.
    Gross production of Cold Lake heavy oil averaged 154 thousand barrels a
day during the first quarter, versus 144 thousand barrels in the same quarter
last year. Higher production in 2008 was due to the cyclic nature of
production at Cold Lake and increased volumes from the ongoing development
drilling program.
    The company's share of Syncrude's gross production was 67 thousand
barrels a day in the first quarter compared with 74 thousand barrels during
the same period a year ago. Production was temporarily reduced during the
quarter as a result of unplanned shutdowns of several operating units, the
recovery of which was aggravated by extremely cold temperatures. These
operating units returned to normal production during the quarter.
    In the first quarter, gross production of conventional crude oil averaged
27 thousand barrels a day, down from 30 thousand barrels a day in the same
period last year primarily due to natural reservoir decline in the Western
Canadian Basin.
    Gross production of NGLs available for sale was 12 thousand barrels a day
in the first quarter, down from 18 thousand barrels in the same quarter last
year, mainly due to the decline, as expected, in production from the gas cap
at Wizard Lake.
    Gross production of natural gas during the first quarter of 2008
decreased to 325 million cubic feet a day from 525 million cubic feet in the
same period last year. The lower production volume was primarily due to
decline, as expected, in production from the gas cap at Wizard Lake, which is
largely complete.
    In March, the Federal court ordered the joint federal and provincial
review panel that had previously granted approval for the company's proposed
Kearl oil sands project to provide rationale for the greenhouse gas emissions
aspect of its conclusions. The judgment did not direct the company to
undertake or refrain from taking any particular course of action nor did it
direct the project approval be altered in any way. Following this, the Federal
Department of Fisheries notified the company that a permit it had issued
earlier this year for the project had been nullified. The company is working
to resolve this matter and is continuing to advance the project including
further progress in engineering work consistent with the terms of the other
permits and approvals that have been granted.
    In recent land sales, Imperial, together with ExxonMobil Canada, acquired
exploration rights in the natural gas prone Horn River area of northeastern
British Columbia. Since September 2007, the companies have acquired total
licence holdings of about 115,000 acres. The licences, in which the company
and ExxonMobil Canada each have a 50-percent interest, are located about 70
kilometres northeast of Fort Nelson, British Columbia.

    Downstream

    Net income from Downstream was $30 million in the first quarter of 2008,
compared with $198 million in the same period a year ago. Lower earnings were
primarily driven by lower overall industry refining margins of about
$145 million and the negative impact of a stronger Canadian dollar of about
$20 million. As well, conversion units at the Strathcona refinery were
shutdown for part of the quarter which temporarily reduced the availability of
refined products in Western Canada. The Strathcona refinery returned to normal
operation in early April. The impact on first quarter earnings was largely
offset by the absence of operational events last year.
    In April, the company and co-owners entered into an agreement to sell
Rainbow Pipe Line Co. Ltd., in which the company has a one-third equity
interest, for about $540 million in total, subject to closing adjustments
including the sale of the crude-oil line fill currently estimated at an
additional $120 million. The transaction is expected to close in the second
quarter of 2008 subject to closing conditions and regulatory approvals.

    Chemical

    Net income from Chemical was $24 million in the first quarter, compared
with $28 million in the same quarter last year. Lower earnings were primarily
due to lower margins for intermediate and other chemical products partially
offset by higher margins for polyethylene products.

    Corporate and other

    Net income from Corporate and other was negative $23 million in the first
quarter, compared with negative $15 million in the same period of 2007.
Unfavourable earnings effects were primarily due to higher share-based
compensation charges.

    LIQUIDITY AND CAPITAL RE

SOURCES ------------------------------- Cash flow from operating activities was $298 million during the first quarter of 2008, an increase of $23 million from the same period last year. The favourable impact of the timing of income tax payments and the net effects of higher commodity prices on receivable and payable balances were essentially offset by higher seasonal inventory builds. Capital and exploration expenditures were $300 million in the first quarter, compared with $216 million during the same quarter of 2007. For the Upstream segment, capital and exploration expenditures included ongoing development drilling at Cold Lake to maintain and expand production capacity, advancing the Kearl oil sands project, investments in facilities improvement at Syncrude and drilling at conventional fields in Western Canada. The Downstream segment's capital expenditures were mainly on projects to improve operating efficiency. During the first quarter of 2008, the company repurchased about 11 million shares for $590 million. Under the current share repurchase program, which began on June 25, 2007, the company has purchased about 36 million shares. Cash dividends of $82 million were paid in the first quarter of 2008 compared with dividends of $76 million in the first quarter of 2007. Per-share dividends declared in the first quarter was $0.09, up from $0.08 in 2007. The above factors led to a decrease in the company's balance of cash and marketable securities to $590 million at March 31, 2008, from $1,208 million at the end of 2007. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS ----------------------------------------------------------- Information about market risks for the three months ended March 31, 2008 does not differ materially from that discussed on page 33 in the company's annual report to shareholders for the year ended December 31, 2007, except for the following: ------------------------------------------------------------------------- Earnings sensitivity (a) millions of dollars after tax ------------------------------------------------------------------------- Ten cents decrease (increase) in the value of the Canadian dollar versus the U.S. dollar + (-) 560 ------------------------------------------------------------------------- The sensitivity of net income to changes in the Canadian dollar versus the U.S. dollar increased from 2007 year-end by about $16 million (after tax) for each one-cent difference. This was primarily due to the narrowing price spread between light crude oil and Cold Lake heavy oil. (a) The amount quoted to illustrate the impact of the sensitivity represents a change of about 10 percent in the value of the commodity at the end of the first quarter 2008. The sensitivity calculation shows the impact on annual net income that results from a change in one factor, after tax and royalties and holding all other factors constant. While the sensitivity is applicable under current conditions, it may not apply proportionately to larger fluctuations. ------------------------------------------------------------------------- This report may contain forward-looking information. Actual results could differ materially due to market conditions, changes in law or government policy, changes in operating conditions and costs, changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other technical and economic factors. ------------------------------------------------------------------------- IMPERIAL OIL LIMITED ------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF INCOME (U.S. GAAP, unaudited) Three months to March 31 millions of Canadian dollars 2008 2007 ------------------------------------------------------------------------- REVENUES AND OTHER INCOME Operating revenues(a)(b) 7,231 5,767 Investment and other income(4) 32 167 ----------------- TOTAL REVENUES AND OTHER INCOME 7,263 5,934 ----------------- EXPENSES Exploration 40 28 Purchases of crude oil and products(c) 4,496 3,153 Production and manufacturing(5)(d) 977 846 Selling and general(5) 295 286 Federal excise tax(a) 312 305 Depreciation and depletion 181 189 Financing costs(6)(e) (3) 12 ----------------- TOTAL EXPENSES 6,298 4,819 ----------------- INCOME BEFORE INCOME TAXES 965 1,115 INCOME TAXES 284 341 ----------------- NET INCOME(3) 681 774 ----------------- NET INCOME PER COMMON SHARE - BASIC (dollars)(8) 0.76 0.82 NET INCOME PER COMMON SHARE - DILUTED (dollars)(8) 0.75 0.81 DIVIDENDS PER COMMON SHARE (dollars)(8) 0.09 0.08 (a) Federal excise tax included in operating revenues 312 305 (b) Amounts from related parties included in operating revenues 591 439 (c) Amounts to related parties included in purchases of crude oil and products 1,259 654 (d) Amounts to related parties included in production and manufacturing expenses 47 43 (e) Amounts to related parties included in financing costs - 9 The notes to the financial statements are an integral part of these financial statements. ------------------------------------------------------------------------- CONSOLIDATED STATEMENT OF CASH FLOWS (U.S. GAAP, unaudited) Three months inflow/(outflow) to March 31 millions of Canadian dollars 2008 2007 ------------------------------------------------------------------------- OPERATING ACTIVITIES Net income 681 774 Adjustment for non-cash items: Depreciation and depletion 181 189 (Gain)/loss on asset sales(4) (11) (131) Deferred income taxes and other (65) 94 Changes in operating assets and liabilities: Accounts receivable (398) (116) Inventories and prepaids (572) (269) Income taxes payable (11) (409) Accounts payable 584 270 All other items - net(a) (91) (127) ----------------- CASH FROM (USED IN) OPERATING ACTIVITIES 298 275 ----------------- INVESTING ACTIVITIES Additions to property, plant and equipment and intangibles (260) (188) Proceeds from asset sales 13 169 ----------------- CASH FROM (USED IN) INVESTING ACTIVITIES (247) (19) ----------------- FINANCING ACTIVITIES Reduction in capitalized lease obligations (1) (1) Issuance of common shares under stock option plan 4 2 Common shares purchased(8) (590) (569) Dividends paid (82) (76) ----------------- CASH FROM (USED IN) FINANCING ACTIVITIES (669) (644) ----------------- INCREASE (DECREASE) IN CASH (618) (388) CASH AT BEGINNING OF PERIOD 1,208 2,158 ----------------- CASH AT END OF PERIOD 590 1,770 ----------------- (a) Includes contribution to registered pension plans (147) (147) The notes to the financial statements are an integral part of these financial statements. ------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEET (U.S. GAAP, unaudited) As at As at Mar.31 Dec.31 millions of Canadian dollars 2008 2007 ------------------------------------------------------------------------- ASSETS Current assets Cash 590 1,208 Accounts receivable, less estimated doubtful accounts 2,530 2,132 Inventories of crude oil and products 1,089 566 Materials, supplies and prepaid expenses 177 128 Deferred income tax assets 745 660 ----------------- Total current assets 5,131 4,694 Long-term receivables, investments and other long-term assets 769 766 Property, plant and equipment, 23,160 22,962 less accumulated depreciation and depletion 12,521 12,401 ----------------- Property, plant and equipment, net 10,639 10,561 Goodwill 204 204 Other intangible assets, net 62 62 ----------------- TOTAL ASSETS 16,805 16,287 ----------------- LIABILITIES Current liabilities Short-term debt 105 105 Accounts payable and accrued liabilities(7)(a) 3,918 3,335 Income taxes payable 1,487 1,498 Current portion of capitalized lease obligations 3 3 ----------------- Total current liabilities 5,513 4,941 Capitalized lease obligations 37 38 Other long-term obligations(7) 1,801 1,914 Deferred income tax liabilities 1,499 1,471 ----------------- TOTAL LIABILITIES 8,850 8,364 SHAREHOLDERS' EQUITY Common shares at stated value(8)(b) 1,584 1,600 Earnings reinvested(9) 7,100 7,071 Accumulated other comprehensive income(10) (729) (748) ----------------- TOTAL SHAREHOLDERS' EQUITY 7,955 7,923 ----------------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 16,805 16,287 ----------------- (a) Accounts payable and accrued liabilities include amounts to related parties of $300 million (2007 - $260 million). (b) Number of common shares outstanding was 892 million (2007 - 903 million). The notes to the financial statements are an integral part of these financial statements. ------------------------------------------------------------------------- Approved by the directors May 1, 2008 Chairman, president and Senior vice-president, chief executive officer finance and administration, and treasurer ------------------------------------------------------------------------- ------------------------------------------------------------------------- NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (unaudited) ------------------------------------------------------------------------- 1. Basis of financial statement presentation These unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles of the United States of America and follow the same accounting policies and methods of computation as, and should be read in conjunction with, the most recent annual consolidated financial statements. In the opinion of the management, the information furnished herein reflects all known accruals and adjustments necessary for a fair presentation of the financial position of the company as at March 31, 2008, and December 31, 2007, and the results of operations and changes in cash flows for the three months ending March 31, 2008 and 2007. All such adjustments are of a normal recurring nature. The company's exploration and production activities are accounted for under the "successful efforts" method. Certain reclassifications to the prior year have been made to conform to the 2008 presentation. The results for the three months ending March 31, 2008, are not necessarily indicative of the operations to be expected for the full year. All amounts are in Canadian dollars unless otherwise indicated. 2. Accounting changes Uncertainty in income taxes As of January 1, 2007, the company adopted the Financial Accounting Standards Board (FASB) Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes". The cumulative adjustment for the accounting change reported in the first quarter of 2007 was an after-tax gain of $14 million. Fair value measurements Effective January 1, 2008, the company adopted the Financial Accounting Standards Board's (FASB) Statement No. 157 (SFAS 157), "Fair Value Measurements" for financial assets and liabilities that are measured at fair value and nonfinancial assets and liabilities that are remeasured at fair value on a recurring basis. SFAS 157 defines fair value, establishes a framework for measuring fair value when an entity is required to use a fair value measure for recognition or disclosure purposes and expands the disclosures about fair value measurements. The initial application of SFAS 157 has no impact on the company's financial statements. On January 1, 2009, the company will adopt SFAS 157 for nonfinancial assets and liabilities that are not remeasured at fair value on a recurring basis. The application of SFAS 157 to the company's nonfinancial assets and liabilities will mostly be limited to the recognition and measurement of nonmonetary exchange transactions, asset retirement obligations and asset impairments. The company does not expect the adoption to have a material impact on the company's financial statements. 3. Business segments Three months to March 31 Upstream Downstream Chemical millions of dollars 2008 2007 2008 2007 2008 2007 ------------------------------------------------------------------------- REVENUES AND OTHER INCOME External sales(a) 1,449 1,139 5,429 4,318 353 310 Intersegment sales 1,292 918 779 506 101 82 Investment and other income 4 135 14 10 1 - ----------------------------------------------- 2,745 2,192 6,222 4,834 455 392 ----------------------------------------------- EXPENSES Exploration(b) 40 28 - - - - Purchases of crude oil and products 1,085 718 5,234 3,657 349 284 Production and manufacturing 581 509 346 291 50 46 Selling and general 2 2 233 233 18 18 Federal excise tax - - 312 305 - - Depreciation and depletion 117 124 59 61 3 3 Financing costs - 2 (4) - - - ----------------------------------------------- TOTAL EXPENSES 1,825 1,383 6,180 4,547 420 351 ----------------------------------------------- INCOME BEFORE INCOME TAXES 920 809 42 287 35 41 INCOME TAXES 270 246 12 89 11 13 ----------------------------------------------- NET INCOME 650 563 30 198 24 28 ----------------------------------------------- Export sales to the United States 736 475 225 222 221 179 Cash flows from (used in) operating activities 487 267 (174) (19) (8) (52) CAPEX(b) 264 171 32 35 2 3 Total assets as at March 31 8,555 7,971 7,539 6,737 516 495 Capital employed as at March 31 4,806 4,319 3,475 3,564 248 319 Corporate Three months to March 31 and Other Eliminations Consolidated millions of dollars 2008 2007 2008 2007 2008 2007 ------------------------------------------------------------------------- REVENUES AND OTHER INCOME External sales(a) - - - - 7,231 5,767 Intersegment sales - - (2,172) (1,506) - - Investment and other income 13 22 - - 32 167 ----------------------------------------------- 13 22 (2,172) (1,506) 7,263 5,934 ----------------------------------------------- EXPENSES Exploration(b) - - - - 40 28 Purchases of crude oil and products - - (2,172) (1,506) 4,496 3,153 Production and manufacturing - - - - 977 846 Selling and general 42 33 - - 295 286 Federal excise tax - - - - 312 305 Depreciation and depletion 2 1 - - 181 189 Financing costs 1 10 - - (3) 12 ----------------------------------------------- TOTAL EXPENSES 45 44 (2,172) (1,506) 6,298 4,819 ----------------------------------------------- INCOME BEFORE INCOME TAXES (32) (22) - - 965 1,115 INCOME TAXES (9) (7) - - 284 341 ----------------------------------------------- NET INCOME (23) (15) - - 681 774 ----------------------------------------------- Export sales to the United States - - - - 1,182 876 Cash flows from (used in) operating activities (7) 79 - - 298 275 CAPEX(b) 2 7 - - 300 216 Total assets as at March 31 629 1,777 (434) (332) 16,805 16,648 Capital employed as at March 31 (377) 832 - - 8,152 9,034 (a) Includes crude oil sales made by Downstream in order to optimize refining operations. (b) Capital and exploration expenditures (CAPEX) include exploration expenses, additions to property, plant, equipment and intangibles and additions to capital leases. 4. Investment and other income Investment and other income includes gains and losses on asset sales as follows: Three months to March 31 millions of dollars 2008 2007 ------------------------------------------------------------------------- Proceeds from asset sales 13 169 Book value of assets sold 2 38 ----------------- Gain/(loss) on asset sales, before tax(a) 11 131 ----------------- Gain/(loss) on asset sales, after tax(a) 9 93 ----------------- (a) First quarter of 2007 included a gain of $129 million ($91 million, after tax) from the sale of a producing property. 5. Employee retirement benefits The components of net benefit cost included in production and manufacturing and selling and general expenses in the consolidated statement of income are as follows: Three months to March 31 millions of dollars 2008 2007 ------------------------------------------------------------------------- Pension benefits: Current service cost 24 25 Interest cost 66 61 Expected return on plan assets (82) (82) Amortization of prior service cost 5 5 Recognized actuarial loss 20 19 ----------------- Net benefit cost 33 28 ----------------- Other post-retirement benefits: Current service cost 1 1 Interest cost 6 6 Recognized actuarial loss 1 2 ----------------- Net benefit cost 8 9 ----------------- 6. Financing costs Three months to March 31 millions of dollars 2008 2007 ------------------------------------------------------------------------- Debt related interest 2 16 Capitalized interest (2) (7) ----------------- Net interest expense - 9 Other interest (3) 3 ----------------- Total financing costs (3) 12 ----------------- IMPERIAL OIL LIMITED 7. Other long-term obligations As at As at Mar.31 Dec.31 millions of dollars 2008 2007 ------------------------------------------------------------------------- Employee retirement benefits(a) 801 954 Asset retirement obligations and other environmental liabilities(b) 520 522 Share-based incentive compensation liabilities 252 210 Other obligations 228 228 ----------------- Total other long-term obligations 1,801 1,914 ----------------- (a) Total recorded employee retirement benefits obligations also include $59 million in current liabilities (December 31, 2007 - $59 million). (b) Total asset retirement obligations and other environmental liabilities also include $74 million in current liabilities (December 31, 2007 - $74 million). 8. Common shares As at As at Mar.31 Dec.31 thousands of shares 2008 2007 ------------------------------------------------------------------------- Authorized 1,100,000 1,100,000 Common shares outstanding 892,487 903,263 From 1995 through 2006, the company purchased shares under twelve 12- month normal course issuer bid share repurchase programs, as well as an auction tender. On June 25, 2007, another 12-month normal course issuer bid program was implemented with an allowable purchase of 46.5 million shares (five percent of the total on June 22, 2007), less any shares purchased by the employee savings plan and company pension fund. The results of these activities are as shown below: millions of Year Shares Dollars ------------------------------------------------------------------------- 1995 - 2006 795.6 10,453 2007 - First quarter 13.6 569 - Full year 50.5 2,358 2008 - First quarter 11.0 590 Cumulative purchases to date 857.1 13,401 Exxon Mobil Corporation's participation in the above share repurchase maintained its ownership interest in Imperial at 69.6 percent. The excess of the purchase cost over the stated value of shares purchased has been recorded as a distribution of earnings reinvested. The following table provides the calculation of net income per common share: Three months to March 31 2008 2007 ------------------------------------------------------------------------- Net income per common share - basic Net income (millions of dollars) 681 774 Weighted average number of common shares outstanding (millions of shares) 899.7 948.8 Net income per common share (dollars) 0.76 0.82 Net income per common share - diluted Net income (millions of dollars) 681 774 Weighted average number of common shares outstanding (millions of shares) 899.7 948.8 Effect of employee stock-based awards (millions of shares) 6.3 5.5 ----------------- Weighted average number of common shares outstanding, assuming dilution (millions of shares) 906.0 954.3 Net income per common share (dollars) 0.75 0.81 9. Earnings reinvested Three months to March 31 millions of dollars 2008 2007 ------------------------------------------------------------------------- Earnings reinvested at beginning of period 7,071 6,462 Cumulative effect of accounting change(2) - 14 Net income for the period 681 774 Share purchases in excess of stated value (571) (545) Dividends (81) (75) ----------------- Earnings reinvested at end of period 7,100 6,630 ----------------- 10. Comprehensive income Three months to March 31 millions of dollars 2008 2007 ------------------------------------------------------------------------- Net income 681 774 Post-retirement benefit liability adjustment (excluding amortization) - (28) Amortization of post retirement benefit liability adjustment included in net periodic benefit costs 19 17 ----------------- Other comprehensive income (net of income taxes) 19 (11) ----------------- Total comprehensive income 700 763 ----------------- ------------------------------------------------------------------------- OPERATING STATISTICS (unaudited) Three months to March 31 2008 2007 ------------------------------------------------------------------------- GROSS CRUDE OIL AND NGL PRODUCTION (thousands of barrels a day) Cold Lake 154 144 Syncrude 67 74 Conventional 27 30 ----------------- Total crude oil production 248 248 Natural gas liquids (NGLs) available for sale 12 18 ----------------- Total crude oil and NGL production 260 266 ----------------- NET CRUDE OIL AND NGL PRODUCTION (thousands of barrels a day) Cold Lake 131 123 Syncrude 57 63 Conventional 20 22 ----------------- Total crude oil production 208 208 Natural gas liquids (NGLs) available for sale 8 14 ----------------- Total crude oil and NGL production 216 222 ----------------- COLD LAKE BLEND SALES (thousands of barrels a day) 204 194 NGL SALES (thousands of barrels a day) 17 29 NATURAL GAS (millions of cubic feet a day) Production (gross) 325 525 Production (net) 259 456 Sales 294 478 AVERAGE REALIZATIONS AND PRICES (Canadian dollars) Conventional crude oil realizations (a barrel) 93.27 62.25 NGL realizations (a barrel) 58.67 43.68 Natural gas realizations (a thousand cubic feet) 8.00 7.75 Par crude oil price at Edmonton (a barrel) 98.58 67.89 Heavy crude oil at Hardisty (Bow River, a barrel) 77.64 51.34 TOTAL REFINERY THROUGHPUT (thousands of barrels a day) 425 441 REFINERY CAPACITY UTILIZATION (percent) 85 88 PETROLEUM PRODUCTS SALES (millions of litres a day) Gasolines 31.1 30.1 Heating, diesel and jet fuels 26.4 28.4 Heavy fuel oils 4.6 3.9 Lube oils and other products 6.0 5.8 ----------------- Net petroleum products sales 68.1 68.2 ----------------- PETROCHEMICAL SALES (thousands of tonnes a day) 3.1 3.0 ------------------------------------------------------------------------- ------------------------------------------------------------------------- SHARE OWNERSHIP, TRADING AND PERFORMANCE (unaudited) Three months to March 31 2008 2007 ------------------------------------------------------------------------- RETURN ON AVERAGE CAPITAL EMPLOYED(a) (rolling 4 quarters, percent) 36.0 36.9 RETURN ON AVERAGE SHAREHOLDERS' EQUITY (rolling 4 quarters, percent) 39.7 44.3 INTEREST COVERAGE RATIO - EARNINGS BASIS (rolling 4 quarters, times covered) 89.1 67.5 SHARE OWNERSHIP Outstanding shares (thousands) Monthly weighted average 899,736 948,751 At March 31 892,487 939,564 Number of shareholders At March 31 13,172 13,424 SHARE PRICES Toronto Stock Exchange (Canadian dollars) High 58.09 43.75 Low 45.80 37.40 Close at March 31 53.80 42.80 American Stock Exchange (U.S. dollars)(b) High 58.91 38.29 Low 44.30 31.87 Close at March 31 52.26 37.12 (a) Return on capital employed is net income excluding the after-tax cost of financing divided by the average rolling four quarters' capital employed. (b) Share price presented is based on consolidated U.S. market data.

For further information:

For further information: Investor relations, Dee Brandes, (403)
237-4537; Media relations, Richard O'Farrell, (403) 237-2710


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