Imperial Oil reports second quarter earnings
Imperial Oil [TSX:IOL] reported second quarter earnings today of $1.2 billion or $1.45/share. Production averaged 287,000 barrels per day for the last quarter, an increase of 11,000 bpd from the same time last year. Production was lower than analysts expected; maintenance outages at Syncrude offset production increases realized at their Kearl Oil Sands operation north of Fort McMurray, AB.
The Kearl Mine has a nameplate capacity of 110,000 bpd and has been in operation for over year. The mine averaged 73,000 bpd in the previous quarter and 85,000 bpd in the month of June. The facility is currently undergoing an expansion phase which will see production double by the end of next year. The company reported 90% completion for the expansion plant with start-up expected in mid-2015.
Imperial Oil also owns a 25% stake in Syncrude Canada. Production at Syncrude was far below expectations due to unplanned coker maintenance during the last quarter.
The company also announced start-up of a cyclic solvent process test facility at their Cold Lake in-situ operation. The pilot plant will test the commercial viability of a low-temperature process using solvent instead of water or steam for bitumen extraction in-situ. The non-thermal process will be less water and carbon intensive than conventional in-situ methods.
Imperial Oil is 69.6% owned by ExxonMobil [NYSE:XOM], who also missed analysts' expectations this week. Although earnings were stronger than expected, production slipped 5.7% to 3.8 million barrels of oil equivalent. Q2 profit rose to $8.78 billion (or $2.05/share), an increase of 28% from the same quarter last year. The company bought back $3 billion worth of shares last quarter and boosted its dividend 9.5% to $0.69/share. Dividend payouts have grown every year since 1987. XOM stock currently yields about 2.7%
This is ExxonMobil's third consecutive quarterly decline in production; production has not grown substantially in the past decade. The company has been slow to participate in the US shale boom. ExxonMobil has been aggressively buying back stock in an effort to boost EPS figures.
Note: Imperial Oil earnings are reported in Canadian dollars; ExxonMobil figures are denominated in US dollars.