Im­pe­rial Oil posts un­ex­pected Q2 loss

Main­te­nance costs eat into oil out­put

National Post (National Edition) - - FINANCIAL POST - NIA WIL­LIAMS Reuters

CAL­GARY • Cana­dian en­ergy pro­ducer Im­pe­rial Oil Ltd. re­ported an un­ex­pected sec­ond-quar­ter loss on Fri­day due to planned and un­planned main­te­nance that curbed oil out­put.

The net loss of $77 mil­lion, or 9 cents per share, was smaller than the loss of $181 mil­lion, or 21 cents, in the same pe­riod a year ear­lier thanks to a pickup in oil prices and less re­fin­ery main­te­nance.

An­a­lysts had ex­pected earn­ings of around 30 cents a share, and Im­pe­rial shares slid 3.25 per cent on the Toronto Stock Ex­change, clos­ing at $36.01.

North Amer­i­can oil pro­duc­ers are slowly gain­ing from a rise in global crude prices as an OPEC-led pro­duc­tion cut and a re­bound in de­mand slowly erode a per­sis­tent global glut.

Im­pe­rial sold bi­tu­men from its Cana­dian oil­sands projects for $38.22 per barrel in the sec­ond quar­ter com­pared with $29.45 per barrel in the same pe­riod of 2016.

The com­pany, ma­jor­ity owned by Exxon Mo­bil Corp., said gross pro­duc­tion rose slightly to 331,000 bar­rels of oil equiv­a­lent per day (boepd) in the re­ported quar­ter, com­pared with 329,000 boepd last year.

Out­put at Im­pe­rial’s Kearl oil­sands min­ing project was 171,000 bar­rels per day in the quar­ter, up from 155,000 bpd in the same three months of 2016 when wild­fires in north­ern Al­berta dis­rupted oil­sands pro­duc­tion.

Main­te­nance at Kearl in the sec­ond quar­ter of 2017 re­duced pro­duc­tion by about 38,000 bar­rels per day and Im­pe­rial said it will be tak­ing steps this year and in 2018 to im­prove per­for­mance at the plant, which has strug­gled to hit full ca­pac­ity of around 210,000 bpd.

“Kearl is a high-qual­ity, long-life as­set of sig­nif­i­cant im­por­tance to the com­pany,” said Im­pe­rial chief ex­ec­u­tive Rich Kruger. “We are ad­dress­ing gaps in per­for­mance by en­hanc­ing ex­ist­ing in­fra­struc­ture while also eval­u­at­ing ad­di­tional in­no­va­tive ideas to im­prove re­sults.”

Im­pe­rial also holds a 25 per cent stake in the Syn­crude oil­sands project, which has been run­ning at re­duced rates since March fol­low­ing a fire.

The com­pany said its re­fin­ery through­put av­er­aged 358,000 bpd in the quar­ter, up from 246,000 bpd in the same pe­riod of 2016.

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