Imperial Oil profit boosted by asset-sale gain

Tue Jan 31, 2017 11:52am EST
 
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CALGARY, Alberta (Reuters) - Canadian oil producer Imperial Oil Ltd (IMO.TO: Quote) reported a sharp rise in fourth-quarter profit on Tuesday, helped by a nearly C$1 billion gain from the sale of its service stations.

Calgary-based Imperial, majority-owned by Exxon Mobil Corp (XOM.N: Quote), sold its remaining company-owned Esso retail stations to five fuel distributors for about C$2.8 billion ($2.15 billion).

Total net income rose to C$1.44 billion, or C$1.70 per share, in the quarter, from C$102 million, or 12 Canadian cents per share, a year earlier. Imperial recorded a C$988 million gain from the sale of the service stations.

However, Imperial's production dipped to an average of 399,000 gross oil-equivalent barrels per day (bpd) from 400,000 a year earlier, and quarterly volumes fell at its vast Kearl oil sands mining project in northern Alberta.

Kearl averaged 169,000 bpd in the quarter compared with 203,000 bpd in the same period a year earlier, due to planned and unplanned maintenance activities.

Imperial's share of production from the Syncrude oil sands plant, majority-owned by Suncor Energy (SU.TO: Quote), reached 87,000 bpd, up from 64,000 bpd a year earlier, reflecting efforts to improve reliability at the mining and upgrading project.

"Syncrude effectively matched its record utilization rate achieved in Q3," TD Securities analyst Menno Hulshof wrote in a note to clients, but added that the higher-than-expected Syncrude volumes were offset by lower Kearl volumes.

Analysts also said the increased output form Syncrude boded well for Suncor, which releases its quarterly earnings next week.

Imperial shares were down 0.8 percent at C$42.50 on the Toronto Stock Exchange.

(Reporting by Nia Williams in Calgary and Ahmed Farhatha in Bengaluru; Editing by Anil D'Silva and Jeffrey Benkoe)