By Nia Williams and Ruhi Soni
(Reuters) -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 C$2.5 billion ($1.95 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 oil sands mine.
Imperial’s shares were last up 1.5% on the Toronto Stock Exchange at C$65.1.
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 fueled concerns about tight supplies.
Calgary-based Imperial said the decision to launch an SIB, which will get underway during the next two weeks, was driven by having plentiful excess cash on its balance sheet.
“The C$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 C$1.17 billion ($917.94 million), or C$1.75 per share, from C$392 million ($307.55 million), or 53 Canadian cents per share, a year ago. The company said this was its highest first-quarter earnings in over 30 years.
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.
Imperial’s refinery throughput rose 9.6% to 399,000 bpd, boosted by higher demand for fuels and other refined products.
Friday’s results mirror those of Imperial’s rival Cenovus Energy earlier this week. Cenovus posted a seven-fold jump in quarterly profit that surpassed analyst estimates and nearly tripled its dividend.
($1 = 1.2803 Canadian dollars)
(Editing by Krishna Chandra Eluri and Chris Reese)
