Imperial Oil sees rare quarterly high profit on surging crude

Canada's Imperial Oil on Friday booked a first-quarter profit boosted by soaring global oil prices, and announced plans for a substantial issuer bid (SIB) that will involve buying back up to $2.5 billion of its common shares.

News of the SIB helped offset lower-than-expected production for the quarter, after extreme cold weather in northern Alberta triggered an extended unplanned outage at the company's huge Kearl oilsands mine.

Imperial's shares closed up 0.9 per cent on the Toronto Stock Exchange at $64.68.

Oil companies have been benefiting from global crude prices surging to their highest in nearly 14 years during the first quarter as sanctions on major oil exporter Russia over its invasion of Ukraine fuelled concerns about tight supplies.

Calgary-based Imperial said the decision to launch a SIB, which will get underway during the next two weeks, was driven by having plentiful excess cash on its balance sheet.

“The $2.5 billion is clearly very affordable and at current prices we'd expect to continue to generate significant cash flow,” Imperial chief executive Brad Corson told analysts on an earnings call.

Imperial, which is majority-owned by Exxon Mobil Corp, posted net earnings of $1.17 billion, or $1.75 per share, from $392 million, or 53 cents per share, a year ago. It said this was its highest first-quarter earnings in over 30 years.

Total revenue and other income amounted to $12.69 billion, up from $7 billion in the first three months of 2021, as oil prices skyrocketed in the quarter due to the war in Ukraine and global market concerns about energy security.

However, quarterly gross upstream production averaged 380,000 oil-equivalent barrels per day (boepd), down from 432,000 boepd a year earlier. Production at Kearl averaged 186,000 barrels per day (bpd) gross to Imperial, down 65,000 bpd versus the same quarter a year earlier.

Corson said operations at Kearl had returned to normal and the company will assess whether it needs to downgrade full-year production forecasts once a planned five-week maintenance turnaround is finished in late June.