High oil prices helped Imperial Oil Ltd. post its highest first-quarter profit in over 30 years Friday, though production at the company’s Kearl oilsands mine was less than anticipated due to extreme cold weather and unplanned downtime.
The Calgary-based oil producer said Friday it earned $1.17 billion, or $1.75 per diluted share for the quarter ended March 31, up from a profit of $392 million or 53 cents per share a year earlier.
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.
But the company’s production at its massive Kearl oilsands mine significantly missed analyst expectations, as Imperial struggled with harsh winter conditions in northern Alberta.
Kearl produced an average of 380,000 gross oil-equivalent barrels per day in the quarter, down from 432,000 in the same period of 2021.
“The first quarter in any year is expected to be our lowest production quarter at Kearl … however, this winter saw unusually severe cold weather,” said president and chief executive officer Brad Corson on a conference call with analysts.
Corson said missed production targets at Kearl this winter will make it challenging for Imperial to meet its full-year guidance, but added the company feels adjusting its guidance now would be premature — especially as operations at Kearl have since returned to normal.
“We are heading into our annual turnaround and once that is complete and we assess the progress of our recovery plans, we will revisit whether an update is necessary,” Corson said.
Also on Friday, Imperial announced plans to buy back up to $2.5 billion of its common shares.
The company also provided an update on the marketing of its interests in XTO Energy Canada, which it owns jointly with ExxonMobil Canada. Through XTO, Imperial owns more than 260,000 hectares of assets in the Montney and Duvernay oil and gas-producing areas of central Alberta.
Net production from these assets is about 140 million cubic feet of natural gas per day and about 9,000 barrels of crude, condensate and natural gas liquids per day.
Corson said Friday the bid window for these assets closed in March and Imperial is now evaluating next steps.
“The interest level has been quite high. We’re in the process of evaluating the bids and will provide more information as it becomes available,” Corson said. “I would reiterate though that no decision to sell the assets has been made at this point.”
Imperial says refinery throughput averaged 399,000 barrels per day, up from 364,000 in the first quarter of last year. Capacity utilization was 93 per cent, up from 85 per cent a year earlier.