Imperial announces fourth quarter 2024 financial and operating results
- Quarterly net income of $1,225 million
- Cash flows from operating activities of $1,789 million and cash flows from operating activities excluding working capital1 of $1,650 million
- Kearl quarterly production of 299,000 total gross oil-equivalent barrels per day (212,000 barrels Imperial’s share), and highest-ever full year total gross production of 281,000 barrels per day (200,000 barrels Imperial’s share)
- Cold Lake quarterly production of 157,000 gross oil-equivalent barrels per day and full year production of 148,000 barrels per day, supported by strong Grand Rapids performance
- Quarterly Upstream production of 460,000 gross oil-equivalent barrels per day, and highest annual production in over 30 years of 433,000 barrels per day
- Strong Downstream operating performance with refinery capacity utilization of 95 percent for the quarter and 92 percent for the year, at the high end of guidance
- Returned nearly $1.8 billion to shareholders in the quarter through share buybacks and dividends
- Quarterly dividend increased by 20 percent from 60 cents to 72 cents per share
CALGARY, Alberta–(BUSINESS WIRE)–Imperial (TSE: IMO) (NYSE American: IMO):
|
Fourth quarter |
Twelve months |
|||||
|
millions of Canadian dollars, unless noted |
2024 |
2023 |
∆I |
2024 |
2023 |
∆I |
|
Net income (loss) (U.S. GAAP) |
1,225 |
1,365 |
(140) |
4,790 |
4,889 |
(99) |
|
Net income (loss) per common share, assuming dilution (dollars) |
2.37 |
2.47 |
(0.10) |
9.03 |
8.49 |
+0.54 |
|
Capital and exploration expenditures |
423 |
469 |
(46) |
1,867 |
1,778 |
+89 |
Imperial reported estimated net income in the fourth quarter of $1,225 million, compared to net income of $1,237 million in the third quarter of 2024, primarily due to lower realizations, partially offset by higher production and stronger Downstream refinery capacity utilization. Quarterly cash flows from operating activities were $1,789 million, up from $1,487 million generated in the third quarter of 2024. Excluding the impact of working capital1, cash flows from operating activities were $1,650 million, compared to $1,797 million in the third quarter of 2024. Full year estimated net income was $4,790 million with cash flows from operating activities of $5,981 million. Excluding the impacts of working capital1, full-year cash flows from operating activities were $6,476 million.
“Our robust financial results in 2024 were driven by outstanding operational performance. I’m proud of Imperial’s ability to deliver on all of its 2024 volume commitments including a new annual production record at Kearl. Downstream and Cold Lake performances were both at the upper end of our guidance, which was supported by excellent turnaround execution and strong Grand Rapids production,” said Brad Corson, chairman, president and chief executive officer.
Upstream production in the fourth quarter averaged 460,000 gross oil-equivalent barrels per day, which is the highest quarterly production in over 30 years when adjusting for the divestment of XTO Energy Canada. The fourth-quarter performance contributed to the company’s highest annual production of 433,000 gross oil-equivalent barrels per day in over 30 years. At Kearl, quarterly total gross production averaged 299,000 barrels per day (212,000 barrels Imperial’s share), contributing to a full year production record of 281,000 total gross barrels per day (200,000 barrels Imperial’s share) at unit cash costs1 below the company’s previously stated target. Cold Lake quarterly gross production averaged 157,000 barrels per day, including better-than-expected production of 22,000 barrels per day of solvent-assisted SAGD production from Grand Rapids. The company’s share of Syncrude quarterly production averaged 81,000 gross barrels per day.
Downstream throughput in the quarter averaged 411,000 barrels per day, resulting in an overall refinery capacity utilization of 95 percent, even with the completion of the Nanticoke turnaround. Petroleum product sales averaged 458,000 barrels per day. Full-year throughput achieved the high end of the company’s 2024 guidance range, averaging 399,000 barrels per day, with capacity utilization of 92 percent and petroleum product sales of 466,000 barrels per day. Construction continued on Canada’s largest renewable diesel facility at the Strathcona refinery, with a targeted start-up date in the middle of 2025.
During the quarter, Imperial returned a total of nearly $1.8 billion to shareholders through dividend payments and accelerated share repurchases under the company’s annual normal course issuer bid program. The company is also announcing a first quarter dividend increase of 12 cents per share to 72 cents per share.
“Our 20% increase in the dividend reflects confidence in our plans as we enter 2025 with strong operational momentum underpinned by Upstream production growth, strong Downstream utilization and a continued focus on expense reduction,” said Corson.
Fourth quarter highlights
- Net income of $1,225 million or $2.37 per share on a diluted basis, compared to $1,365 million or $2.47 per share in the fourth quarter of 2023.
- Cash flows from operating activities of $1,789 million, up from cash flows from operating activities of $1,311 million in the fourth quarter of 2023. Cash flows from operating activities excluding working capital1 of $1,650 million, compared to $1,799 million in the fourth quarter of 2023.
- Capital and exploration expenditures totaled $423 million, compared to $469 million in the fourth quarter of 2023.
- The company returned $1,792 million to shareholders in the fourth quarter of 2024, including $317 million in dividends paid and $1,475 million with the successful completion of its accelerated share repurchases.
- Production averaged 460,000 gross oil-equivalent barrels per day, the highest quarterly production in over 30 years when adjusting for the divestment of XTO Energy Canada, up from 452,000 gross oil-equivalent barrels per day in the fourth quarter of 2023, primarily driven by Grand Rapids.
- Total gross bitumen production at Kearl averaged 299,000 barrels per day (212,000 barrels Imperial’s share), compared to 308,000 barrels per day (218,000 barrels Imperial’s share) in the fourth quarter of 2023.
- Gross bitumen production at Cold Lake averaged 157,000 barrels per day, up from 139,000 barrels per day in the fourth quarter of 2023, mainly driven by Grand Rapids.
- Leming SAGD redevelopment project remains on track with expected start up in late 2025 with peak production anticipated to be around 9,000 barrels per day.
- The company’s share of gross production from Syncrude averaged 81,000 barrels per day, compared to 85,000 barrels per day in the fourth quarter of 2023.
- Refinery throughput averaged 411,000 barrels per day, up from 407,000 barrels per day in the fourth quarter of 2023. Capacity utilization was 95 percent, up from 94 percent in the fourth quarter of 2023.
- Petroleum product sales were 458,000 barrels per day, compared to 476,000 barrels per day in the fourth quarter of 2023, primarily driven by lower wholesale volume.
- Construction continued on Canada’s largest renewable diesel facility at the Strathcona refinery, with a targeted start-up date in the middle of 2025.
- Chemical net income of $21 million in the quarter, up from $17 million in the fourth quarter of 2023.
Recent business environment
During the fourth quarter, crude prices decreased versus the third quarter, reflecting uncertainty in supply and demand balances. The Canadian WTI/WCS spread remained consistent with the third quarter, and the full-year average was narrower versus the 2023 full-year average. Industry refining margins declined versus the third quarter due to increased supply.
Operating results
Fourth quarter 2024 vs. fourth quarter 2023
|
|
Fourth Quarter |
|
|
millions of Canadian dollars, unless noted |
2024 |
2023 |
|
Net income (loss) (U.S. GAAP) |
1,225 |
1,365 |
|
Net income (loss) per common share, assuming dilution (dollars) |
2.37 |
2.47 |
Upstream
Net income (loss) factor analysis
millions of Canadian dollars
|
2023 |
Price |
Volume |
Royalty |
Other |
2024 |
|
770 |
90 |
100 |
(90) |
8 |
878 |
Price – Average bitumen realizations increased by $7.53 per barrel, primarily driven by the narrowing WTI/WCS spread and lower diluent costs, partially offset by lower marker prices. Synthetic crude oil realizations decreased by $6.27 per barrel, primarily driven by lower WTI and a weaker Synthetic/WTI spread.
Volume – Higher volumes were primarily driven by Grand Rapids production at Cold Lake.
Royalty – Higher royalties were primarily driven by higher prices and volumes.
Other – Primarily due to favourable foreign exchange impacts of about $60 million.
Marker prices and average realizations
|
|
Fourth Quarter |
|
|
Canadian dollars, unless noted |
2024 |
2023 |
|
West Texas Intermediate (US$ per barrel) |
70.30 |
78.54 |
|
Western Canada Select (US$ per barrel) |
57.73 |
56.80 |
|
WTI/WCS Spread (US$ per barrel) |
12.57 |
21.74 |
|
Bitumen (per barrel) |
71.58 |
64.05 |
|
Synthetic crude oil (per barrel) |
99.10 |
105.37 |
|
Average foreign exchange rate (US$) |
0.72 |
0.73 |
Production
|
|
Fourth Quarter |
|
|
thousands of barrels per day |
2024 |
2023 |
|
Kearl (Imperial’s share) |
212 |
218 |
|
Cold Lake |
157 |
139 |
|
Syncrude (a) |
81 |
85 |
|
|
|
|
|
Kearl total gross production (thousands of barrels per day) |
299 |
308 |
| (a) | In the fourth quarter of 2023, Syncrude gross production included about 1 thousand barrels per day of bitumen and other products that were exported to the operator’s facilities using an existing interconnect pipeline. |
Higher production at Cold Lake was primarily driven by Grand Rapids.
Downstream
Net income (loss) factor analysis
millions of Canadian dollars
|
2023 |
Margins |
Other |
2024 |
|
595 |
(280) |
41 |
356 |
Margins – Lower margins primarily reflect weaker market conditions.
Other – Primarily due to favourable foreign exchange impacts of about $70 million.
Refinery utilization and petroleum product sales
|
|
Fourth Quarter |
|
|
thousands of barrels per day, unless noted |
2024 |
2023 |
|
Refinery throughput |
411 |
407 |
|
Refinery capacity utilization (percent) |
95 |
94 |
|
Petroleum product sales |
458 |
476 |
Refinery throughput in the fourth quarter of 2024 reflects the impact of planned turnaround activities at the
Nanticoke refinery. Refinery throughput in the fourth quarter of 2023 reflected the impact of planned turnaround activities at the Sarnia refinery.
Lower petroleum product sales were primarily driven by lower wholesale volume.
Chemicals
Net income (loss) factor analysis
millions of Canadian dollars
|
2023 |
Margins |
Other |
2024 |
|
17 |
(10) |
14 |
21 |
Corporate and other
|
|
Fourth Quarter |
|
|
millions of Canadian dollars |
2024 |
2023 |
|
Net income (loss) (U.S. GAAP) |
(30) |
(17) |
Liquidity and capital resources
|
|
Fourth Quarter |
|
|
millions of Canadian dollars |
2024 |
2023 |
|
Cash flows from (used in): |
|
|
|
Operating activities |
1,789 |
1,311 |
|
Investing activities |
(404) |
(411) |
|
Financing activities |
(1,896) |
(2,752) |
|
Increase (decrease) in cash and cash equivalents |
(511) |
(1,852) |
|
|
|
|
|
Cash and cash equivalents at period end |
979 |
864 |
Cash flows from operating activities primarily reflect favourable working capital impacts.
Cash flows used in investing activities primarily reflect lower additions to property, plant and equipment.
Cash flows used in financing activities primarily reflect:
|
|
Fourth Quarter |
|
|
millions of Canadian dollars, unless noted |
2024 |
2023 |
|
Dividends paid |
317 |
288 |
|
Per share dividend paid (dollars) |
0.60 |
0.50 |
|
Share repurchases (a) |
1,475 |
2,458 |
|
Number of shares purchased (millions) (a) |
14.4 |
30.8 |
| (a) | Share repurchases were made under the company’s normal course issuer bid program for the periods disclosed. A substantial issuer bid was undertaken and commenced on November 3, 2023 (expired on December 8, 2023). Includes shares purchased from Exxon Mobil Corporation under and in connection with the normal course issuer bid and by way of a proportionate tender under the company’s substantial issuer bid. |
The company completed share repurchases under its normal course issuer bid on December 19, 2024.
Full-year 2024 vs. full-year 2023
|
|
Twelve Months |
|
|
millions of Canadian dollars, unless noted |
2024 |
2023 |
|
Net income (loss) (U.S. GAAP) |
4,790 |
4,889 |
|
Net income (loss) per common share, assuming dilution (dollars) |
9.03 |
8.49 |
Upstream
Net income (loss) factor analysis
millions of Canadian dollars
|
2023 |
Price |
Volume |
Royalty |
Other |
2024 |
|
2,512 |
430 |
500 |
(330) |
150 |
3,262 |
Price – Average bitumen realizations increased by $7.11 per barrel, primarily driven by the narrowing WTI/WCS spread and lower diluent costs, partially offset by lower marker prices. Synthetic crude oil realizations decreased by $3.66 per barrel, primarily driven by a weaker Synthetic/WTI spread and lower WTI.
Volume – Higher volumes were primarily driven by Grand Rapids production at Cold Lake, as well as improved mine fleet productivity and optimized turnaround at Kearl.
Royalty – Higher royalties were primarily driven by higher volumes and prices.
Other – Primarily due to lower operating costs of about $210 million, mainly driven by lower energy prices, and favourable foreign exchange impacts of about $120 million, partially offset by lower electricity sales at Cold Lake due to lower prices.
Marker prices and average realizations
|
|
Twelve Months |
|
|
Canadian dollars, unless noted |
2024 |
2023 |
|
West Texas Intermediate (US$ per barrel) |
75.78 |
77.60 |
|
Western Canada Select (US$ per barrel) |
61.04 |
58.97 |
|
WTI/WCS Spread (US$ per barrel) |
14.74 |
18.63 |
|
Bitumen (per barrel) |
74.53 |
67.42 |
|
Synthetic crude oil (per barrel) |
101.91 |
105.57 |
|
Average foreign exchange rate (US$) |
0.73 |
0.74 |
Production
|
|
Twelve Months |
|
|
thousands of barrels per day |
2024 |
2023 |
|
Kearl (Imperial’s share) |
200 |
191 |
|
Cold Lake |
148 |
135 |
|
Syncrude (a) |
75 |
76 |
|
|
|
|
|
Kearl total gross production (thousands of barrels per day) |
281 |
270 |
| (a) | In 2024, Syncrude gross production included about 1 thousand barrels per day of bitumen and other products (2023 – 1 thousand barrels per day) that were exported to the operator’s facilities using an existing interconnect pipeline. |
Higher production at Cold Lake was primarily driven by Grand Rapids.
Downstream
Net income (loss) factor analysis
millions of Canadian dollars
|
2023 |
Margins |
Other |
2024 |
|
2,301 |
(890) |
75 |
1,486 |
Margins – Lower margins primarily reflect weaker market conditions.
Other – Primarily due to lower turnaround impacts of about $120 million and favourable foreign exchange impacts of about $110 million, partially offset by lower volumes of about $60 million.
Refinery utilization and petroleum product sales
|
|
Twelve Months |
|
|
thousands of barrels per day, unless noted |
2024 |
2023 |
|
Refinery throughput |
399 |
407 |
|
Refinery capacity utilization (percent) |
92 |
94 |
|
Petroleum product sales |
466 |
471 |
Refinery throughput in 2024 reflects the impact of planned turnaround activities at Nanticoke, Sarnia, and Strathcona refineries. Refinery throughput in 2023 reflected the impact of planned turnaround activities at Strathcona and Sarnia refineries.
Chemicals
Net income (loss) factor analysis
millions of Canadian dollars
|
2023 |
Margins |
Other |
2024 |
|
164 |
— |
7 |
171 |
Corporate and other
|
|
Twelve Months |
|
|
millions of Canadian dollars |
2024 |
2023 |
|
Net income (loss) (U.S. GAAP) |
(129) |
(88) |
Liquidity and capital resources
|
|
Twelve Months |
|
|
millions of Canadian dollars |
2024 |
2023 |
|
Cash flows from (used in): |
|
|
|
Operating activities |
5,981 |
3,734 |
|
Investing activities |
(1,825) |
(1,694) |
|
Financing activities |
(4,041) |
(4,925) |
|
Increase (decrease) in cash and cash equivalents |
115 |
(2,885) |
Cash flows from operating activities primarily reflect the absence of unfavourable working capital impacts mainly related to an income tax catch-up payment of $2.1 billion in the prior year.
Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment.
Cash flows used in financing activities primarily reflect:
|
|
Twelve Months |
|
|
millions of Canadian dollars, unless noted |
2024 |
2023 |
|
Dividends paid |
1,238 |
1,103 |
|
Per share dividend paid (dollars) |
2.30 |
1.88 |
|
Share repurchases (a) |
2,681 |
3,800 |
|
Number of shares purchased (millions) (a) |
26.8 |
48.3 |
| (a) | Share repurchases were made under the company’s normal course issuer bid program for the periods disclosed. A substantial issuer bid was undertaken and commenced on November 3, 2023 (expired on December 8, 2023). Includes shares purchased from Exxon Mobil Corporation under and in connection with the normal course issuer bid and by way of a proportionate tender under the company’s substantial issuer bid. |
On June 24, 2024, the company announced that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to continue its then existing share purchase program. The program enabled the company to purchase up to a maximum of 26,791,840 common shares during the period June 29, 2024 to June 28, 2025. The program completed on December 19, 2024 as a result of the company purchasing the maximum allowable number of shares under the program.
Key financial and operating data follow.
Forward-looking statements
Statements of future events or conditions in this report, including projections, targets, expectations, estimates, and business plans, are forward-looking statements. Similarly, discussion of roadmaps or future plans related to carbon capture, transportation and storage, biofuel, hydrogen, and other future plans to reduce emissions and emission intensity of the company, its affiliates and third parties are dependent on future market factors, such as continued technological progress, policy support and timely rule-making and permitting, and represent forward-looking statements. Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, estimate, expect, future, continue, likely, may, should, will and similar references to future periods. Forward-looking statements in this report include, but are not limited to, references to the company’s Strathcona renewable diesel project, including start-up timing; the company’s Leming SAGD redevelopment project, including timing and anticipated production; the company’s unit cash cost target; and the company’s operational momentum, anticipated Upstream production growth and Downstream utilization, and continued focus on expense reduction.
Forward-looking statements are based on the company’s current expectations, estimates, projections and assumptions at the time the statements are made. Actual future financial and operating results, including expectations and assumptions concerning future energy demand, supply and mix; production rates, growth and mix across various assets; project plans, timing, costs, technical evaluations and capacities and the company’s ability to effectively execute on these plans and operate its assets, including the Strathcona renewable diesel project and the Leming SAGD redevelopment project; the adoption and impact of new facilities or technologies on reductions to greenhouse gas emissions intensity, including but not limited to technologies using solvents to replace energy intensive steam at Cold Lake, Strathcona renewable diesel, carbon capture and storage including in connection with hydrogen for the renewable diesel project, recovery technologies and efficiency projects, and any changes in the scope, terms, or costs of such projects; the results of research programs and new technologies, including with respect to greenhouse gas emissions, and the ability to bring new technologies to scale on a commercially competitive basis, and the competitiveness of alternative energy and other emission reduction technologies; for renewable diesel, the availability and cost of locally-sourced and grown feedstock and the supply of renewable diesel to British Columbia in connection with its low-carbon fuel legislation; the amount and timing of emissions reductions, including the impact of lower carbon fuels; the degree and timeliness of support that will be provided by policymakers and other stakeholders for various new technologies such as carbon capture and storage will be provided; receipt of regulatory approvals in a timely manner, especially with respect to large scale emissions reduction projects; performance of third-party service providers including service providers located outside of Canada; refinery utilization; applicable laws and government policies, including with respect to climate change, greenhouse gas emissions reductions and low carbon fuels; the ability to offset any ongoing inflationary pressures; capital and environmental expenditures; cash generation, financing sources and capital structure, such as dividends and shareholder returns, including the timing and amounts of share repurchases; and commodity prices, foreign exchange rates and general market conditions, could differ materially depending on a number of factors.
These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products and resulting price, differential and margin impacts, including Canadian and foreign government action with respect to supply levels, prices, trade tariffs, trade controls, the occurrence of disruptions in trade or military alliances, and wars; political or regulatory events, including changes in law or government policy, applicable royalty rates, and tax laws; third-party opposition to company and service provider operations, projects and infrastructure; competition from alternative energy sources and competitors who may be more experienced or established in these markets; availability and allocation of capital; the receipt, in a timely manner, of regulatory and third-party approvals, including for new technologies relating to the company’s lower emissions business activities; failure, delay, reduction, revocation or uncertainty regarding supportive policy and market development for the adoption of emerging lower emission energy technologies and other technologies that support emissions reductions; environmental regulation, including climate change and greenhouse gas regulation and changes to such regulation; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; availability and performance of third-party service providers including those located outside of Canada; environmental risks inherent in oil and gas exploration and production activities; management effectiveness and disaster response preparedness; operational hazards and risks; cybersecurity incidents; currency exchange rates; general economic conditions, including inflation and the occurrence and duration of economic recessions or downturns; and other factors discussed in Item 1A risk factors and Item 7 management’s discussion and analysis of financial condition and results of operations of Imperial’s most recent annual report on Form 10-K.
Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to Imperial. Imperial’s actual results may differ materially from those expressed or implied by its forward-looking statements and readers are cautioned not to place undue reliance on them. Imperial undertakes no obligation to update any forward-looking statements contained herein, except as required by applicable law.
Forward-looking and other statements regarding Imperial’s environmental, social and other sustainability efforts and aspirations are not an indication that these statements are material to investors or require disclosure in the company’s filings with securities regulators.
Contacts
Investor Relations
(587) 962-4401
Media Relations
(587) 476-7010
