CALGARY — Imperial Oil Ltd.'s chief executive lauded "what a difference a year makes" as the Calgary-based company reported its highest third-quarter production in more than 30 years against a backdrop of surging oil prices.
Brad Corson, who is also the company's chair and president, said in a conference call with analysts Friday that Imperial's third quarter profit of $908 million amounted to $1.29 per diluted share for the quarter ended Sept. 30 compared with a profit of $3 million or zero cents per diluted share in the same quarter last year.
Revenue and other income totalled $10.23 billion, up from $5.96 billion a year ago.
The company set a number of records or near-records in the quarter. Its Kearl oilsands mine near Fort McMurray, Alta. averaged 274,000 barrels per day of production, the facility's second highest-ever quarterly production.
Net income from Imperial's chemical business was $121 million, the highest quarterly net income in over 30 years. Chemical net income through the first nine months of 2021 was $297 million, exceeding the previous record set in 2018.
Imperial's shares lost $2.55 or 5.7 per cent at $42.55 in early afternoon trading on the Toronto Stock Exchange, up more than 86 per cent since the start of the year and up nearly 50 per cent since pre-pandemic levels at the beginning of March 2020.
Like all Canadian-based oil companies, Imperial is benefiting from the highest commodity prices in years as global economies reopen and lift restrictions in the wake of the COVID-19 pandemic. These same companies saw their revenues and stock prices plunge in the early days of the pandemic as lockdowns and travel restrictions sent the price of oil plummeting.
But Corson echoed a theme that several energy executives have emphasized in recent days, as he said the company's strong quarter isn't just due to the market-driven rebound in prices. He said Imperial spent last year's downturn focusing on cost-cutting and improving reliability at its sites, which will help the company in the long-term, no matter where the price of oil ends up.
"We continue to benefit from actions we took last year to reduce our overall cost structure and improve reliability," Corson said. "And this combination is so advantageous when commodity prices are continuing to see strength. This is what allows us to capture maximum value today, but also ensures our resiliency in a downturn should that occur in the future."
Imperial says production averaged 435,000 gross oil-equivalent barrels per day for the quarter, up from 365,000 in the same period of 2020, helped by strong operating performance and the absence of planned turnaround activity.
Refinery throughput averaged 404,000 barrels per day, up from 341,000 barrels per day in the third quarter of 2020.
The company's upstream business earned $524 million in the quarter compared with a loss of $74 million a year ago, while its downstream business earned $293 million compared with a profit of $77 million in the same quarter last year.
Also in the quarter, Imperial announced plans to build a renewable diesel facility at its Strathcona refinery near Edmonton. Corson said a final investment decision has not yet been made, but the facility could produce up to 1 billion litres of renewable diesel per year and "generate significant value for our company and shareholders."
He said the facility will also demonstrate Imperial's commitment to achieve net-zero greenhouse gas emissions from oilsands operations by 2050.
This report by The Canadian Press was first published Oct. 29, 2021.
Companies in this story: (TSX:IMO)
Amanda Stephenson, The Canadian Press