Imperial Oil's third quarter profit falls on crude prices

By Nia Williams and Saikeerthi .

(Reuters) -Imperial Oil posted a drop in its third-quarter profit on Friday due to lower commodity prices and refining margins, but also reported record quarterly production at its Kearl oil sands mine and launched a new share repurchase program.

Calgary-based Imperial, majority-owned by Exxon Mobil Corp, reported a net income of C$1.60 billion ($1.16 billion), or C$2.76 per share, for the quarter ended Sept. 30, down from C$2.03 billion, or C$3.24 per share, a year earlier.

The drop came after U.S. benchmark crude averaged $81.49 a barrel in the third quarter, down 12.7% from a year earlier when it surged following Russia's invasion of Ukraine.

Imperial's production averaged 423,000 barrels of oil equivalent per day (BOEPD), down from 430,000 boepd a year earlier.

However the company's Kearl oil sands mine in northern Alberta hit record quarterly production of 295,000 barrels per day (bpd) and CEO Brad Corson told an earnings call Kearl could potentially reach 300,000 bpd annually.

Industry analysts described the results as "mixed". Imperial shares were last down 1.2% on the Toronto Stock Exchange at C$80.30.

Canadian oil companies have been focusing on returning cash to shareholders, and Imperial said it would launch a C$1.5 billion ($1.08 billion) substantial issuer bid in coming weeks, on top of C$1.3 billion in share repurchases in the third quarter of 2023.

The company also has room to increase its dividend and will keep a close watch on how rivals hike theirs, said Dan Lyons, Imperial's executive vice president of finance and administration.

"We're highly aware of what our competitors do in terms of increases in yield," Lyons said on the earnings call. "If they're going higher, we tend to follow that."

($1 = 1.3864 Canadian dollars)

(Reporting by Saikeerthi in Bengaluru and Nia Williams in British Columbia; Editing by Krishna Chandra Eluri and Susan Fenton)