Oil price weakness drives Canada's Imperial Oil to bigger-than-expected loss

Fri Apr 29, 2016 11:09am EDT
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By Nia Williams

CALGARY, Alberta (Reuters) - Canadian integrated oil producer and refiner Imperial Oil Ltd (IMO.TO: Quote) reported a slightly bigger-than-expected quarterly loss on Friday, hurt by continued weakness in global crude prices.

Imperial's net loss was C$101 million ($81 million), or 12 Canadian cents per share, in the first quarter ended March 31, compared with net income of C$421 million, or 50 Canadian cents per share, a year earlier.

The slump in global crude prices, which fell to 13-year lows of around $26 a barrel in the first quarter and are still 60 percent below mid-2014 levels, outweighed benefits from a weak Canadian dollar.

Imperial and other Canadian oil producers record expenses in Canadian dollars, while the price of oil is tied to the U.S. dollar, making the weak loonie a positive factor at a time when oil prices remain persistently low.

The company's adjusted loss was 15 Canadian cents per share, bigger than the average analyst estimate of 14 Canadian cents, according to Thomson Reuters I/B/E/S.

Imperial shares were last down 0.2 percent on the Toronto Stock Exchange at C$41.97 following the slight miss on market expectations.

"The key differences relative to our estimates were lower-than-expected realized pricing, higher product purchase expenses in the upstream segment, partially offset by higher earnings in the downstream segment," BMO Capital Markets analyst Randy Ollenberger wrote in a note.

Imperial said gross production rose 26 percent and averaged a record 421,000 barrels of oil equivalent per day. Its Kearl mining project in northern Alberta averaged 194,000 bpd in the first quarter, up from 95,000 bpd during the first quarter of 2015, as the project continues to ramp up to full capacity.   Continued...