Imperial Oil raises dividend as high crude prices power Q4 profit, revenues

CALGARY — Imperial Oil Ltd. is raising its quarterly dividend after higher crude oil prices contributed to a doubling of revenues and a big surge in fourth-quarter profit. The Calgary-based oil company is increasing its quarterly dividend on April 1 by…

CALGARY — Imperial Oil Ltd. is raising its quarterly dividend after higher crude oil prices contributed to a doubling of revenues and a big surge in fourth-quarter profit.

The Calgary-based oil company is increasing its quarterly dividend on April 1 by 26 per cent to 34 cents a share, up from 27 cents a share.

The company earned net income of $813 million or $1.18 per diluted share for the quarter ended Dec. 31. 

That compared with a net loss of $1.15 billion or $1.56 per share in the same period of 2020, when it took a $1.17-billion writedown related to Canadian unconventional natural gas assets.

Excluding the charge, Imperial earned $25 million in the fourth quarter of 2020.

In all, Imperial’s 2021 shareholder returns of nearly $3 billion through dividend payments and share repurchases set an all-time record for the long-established petroleum company.

“What a difference a year makes,” Imperial chairman, president and CEO Brad Corson said during a conference call to discuss the company’s results. 

“We continue to make the most of the improving and attractive business environment. We saw continued demand recovery throughout the year and significant improvement in commodity prices, both of which are reflected in our results.”

For the coming year, Corson said he expects market conditions and commodity prices will underpin another strong operational performance. 

Last month, Imperial announced plans to market its more than 260,000 hectares of assets in the liquids-rich Montney and Duvernay oil and gas-producing areas of central Alberta.

Imperial said it will market its interests in XTO Energy Canada jointly with ExxonMobil Canada. The companies each own 50 per cent of XTO Energy Canada.

A decision to sell has not yet been made, Corson said, adding that for now the companies are examining the best ways to create maximum value for shareholders.

“Prior to putting the assets in the marketplace, we had received several unsolicited offers,” he said. “There’s been a lot of consolidation occurring in the Montney and Duvernay shale resource plays … that drove us to put those assets in the marketplace and we’ll see what we get back.” 

Given the large size of resource play and the fact that some industry players are more focused on either the Montney area or Duvernay area, Corson said Imperial is open to considering “alternate structures” for the transaction. 

The assets to be marketed include 227,200 net hectares in the Montney shale, 34,000 net hectares in the Duvernay shale and additional holdings in other areas of Alberta.

“The key is going to be what delivers the most value and how does that compare to our view of value if we were to continue to retain the asset and develop it further ourselves,” he said, adding the company is looking forward to seeing the bids. 

Imperial said its total revenue and other income for the quarter amounted to $12.3 billion, up from $6.03 billion as the average price of bitumen came in at $65.53 per barrel, compared with $34.19 per barrel a year earlier.

Revenues beat analyst expectations of $11.3 billion but net income of $813 million fell short of the forecasted $1.02 billion, according to financial data firm Refinitiv.

Overall production in the quarter averaged 445,000 gross oil-equivalent barrels per day, down from 460,000 barrels per day in the same period of 2020. Annual production reached a 30-year high of 428,000 gross oil-equivalent barrels per day.

The decreased quarterly production was primarily driven by extreme cold weather in December, the company said. 

For the year, Imperial earned $2.48 billion, the highest since 2014, compared with a loss of $1.86 billion in 2020.

That translated into a profit of $3.48 per share on $37.6 billion of revenues, compared with a loss of $2.53 per share on $35.9 billion of revenues in 2020.

This report by The Canadian Press was first published Feb. 1, 2022.

Companies in this story: (TSX:IMO)

The Canadian Press


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