Fall in Imperial Oil profits offset by dividend boost, record production

The Imperial Strathcona Refinery which produces petrochemicals is seen near Edmonton·Reuters
Nia Williams and Tanay Dhumal
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By Nia Williams and Tanay Dhumal

(Reuters) -Canadian firm Imperial Oil reported a drop in fourth-quarter profit on Friday, mainly due to lower commodity prices, but surpassed analyst expectations as production surged to record levels at its Kearl oil sands mine.

Calgary-based Imperial also increased its quarterly dividend by 20% as the company continued to focus on returning cash to shareholders.

The dividend bump was cheered by investors, with Imperial shares rising 2.8% on the Toronto Stock Exchange to C$78.78 even as the wider Canadian energy index declined.

Imperial's Kearl mine in northern Alberta hit record full-year production of 270,000 barrels per day (bpd) in 2023 and record quarterly production in the final three months of the year. CEO Brad Corson said he was confident the mine would achieve annual output of 280,000 bpd in 2024.

"Certainly there is the potential that we will achieve more," Corson said on an earnings call. "We're early in the year but I'll also tell you, we're off to a good start in January."

Imperial's total upstream production rose to 452,000 gross oil-equivalent barrels per day (boepd), compared with 441,000 boepd from a year earlier.

Refinery throughput volumes fell to 407,000 barrels per day (bpd), compared with 433,000 bpd in the year-ago quarter, due to planned maintenance at Imperial's Sarnia, Ontario, refinery.

The company posted net income of C$1.37 billion ($1.02 billion), or C$2.47 per share, for the quarter ended Dec. 31, compared with C$1.73 billion, or C$2.86 per share, a year earlier.

Global oil prices retreated in 2023 after spiking the previous year as a result of Russia's invasion of Ukraine.

However, Imperial's production, earnings and cash flow were above many analysts' forecasts.

The company also started solvent-assisted steam injection at its Grand Rapids oil sands thermal project, with production expected to ramp up in coming months.

Imperial said Grand Rapids, expected to produce 15,000 bpd, is the oil sands industry's first solvent-assisted thermal project and will cut carbon emissions intensity by up to 40% versus existing steam technology.

($1 = 1.3373 Canadian dollars)

(Reporting by Tanay Dhumal in Bengaluru; Editing by Pooja Desai, Kirsten Donovan)