Imperial Oil (IMO) Issues 2024 Outlook and C$1.7B Capex Plan
Imperial Oil Limited IMO presented its corporate guidance for 2024 on Monday, allocating a capital spending budget of C$1.7 billion and providing insights into production forecasts across its Upstream and Downstream segments.
For the Upstream segment, Imperial Oil anticipates production in the range of 420,000-442,000 gross oil-equivalent barrels per day for 2024.
For the Downstream segment, throughput is projected in the band of 385,000-400,000 barrels per day, with a capacity utilization of 89-92% throughout 2024.
Brad Corson, chairman, president, and CEO of Imperial Oil, outlined the key aspects of the company's vision for the upcoming year. IMO’s strategy involves achieving milestones, including the profitable growth of volumes at Kearl, commencement of production at the industry's first solvent-assisted Steam-Assisted Gravity Drainage project with Cold Lake Grand Rapids, and the advancement of construction on Canada’s largest renewable diesel facility at the Strathcona refinery. Production is set to commence in early 2025 at the Strathcona Renewable Diesel facility.
Imperial Oil's strategic agenda for 2024 includes the completion of turnarounds at all three of its refineries. This initiative incorporates a scope to facilitate the co-processing of vegetable oils alongside conventional feedstock at the Strathcona refinery. The company expects these planned turnarounds to yield a modestly higher impact on throughput while maintaining a lower cost compared with the 2023 turnaround activities.
Zacks Rank & Key Picks
Imperial Oil currently carries a Zack Rank #3 (Hold).
Some better-ranked stocks in the energy sector are The Williams Companies, Inc. WMB, Sunoco LP SUN and Liberty Energy Inc. LBRT. While The Williams Companies and Sunoco sport a Zacks Rank #1 (Strong Buy) each, Liberty Energy carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Williams Companies is well-positioned to capitalize on the anticipated substantial long-term growth in U.S. natural gas demand, thanks to its impressive portfolio of large-scale projects that create significant value. The company’s debt maturity profile is in good shape with its $4.5-billion revolver maturing in fiscal 2023.
WMB’s earnings beat estimates in each of the trailing four quarters, delivering an average surprise of 13.68%.
Sunoco is among the biggest motor fuel distributors in the U.S. wholesale market in terms of volumes. By distributing more than 10 fuel brands via 10,000 convenience stores under long-term distribution contracts, the partnership will continue to generate stable cash flow.
SUN’s earnings beat estimates in two of the trailing four quarters and missed twice, delivering an average surprise of 28.33%.
Liberty Energy is a North American provider of hydraulic fracturing services to upstream energy operators. The company’s multi-basin presence offers an attractive upside opportunity compared with most of its peers. Its strong relationship with high-quality customers provides revenue visibility and business certainty.
LBRT’s earnings beat estimates in three of the trailing four quarters and missed once, delivering an average surprise of 9.88%.
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