(Reuters) - Canadian oil producer and refiner Imperial Oil Ltd on Friday posted a smaller-than-expected quarterly profit as higher costs and a marginal drop in production offset an increase in realized crude prices.
Imperial’s realized crude oil price of C$49.03 per barrel was C$9 higher for the latest quarter, but total expenses rose 6.4 percent to C$6.7 billion, and production dipped to average 390,000 gross oil-equivalent barrels per day from 393,000 boepd a year earlier.
Still, Imperial realized an 18 percent increase in production from the second quarter of 2017, returning it to profitability. Production in the first half of the year had been negatively affected by factors including a fire at the Syncrude Mildred Lake upgrader.
“Imperial Oil’s operations are very attractive, in our view, and should support healthy growth over the long term, although in the nearer term it will mostly focus on improving existing operations,” Edward Jones analysts said in a note to clients.
The company reported a net profit of C$371 million ($287.80 million), or 44 Canadian cents per share, in the third quarter ended Sept. 30.
Analysts on average were expecting a profit of 46 Canadian cents per share, according to Thomson Reuters I/B/E/S.
North American oil producers have been gaining from a rise in world crude prices as a production cut led by the Organization of the Petroleum Exporting Countries and a rebound in demand erode a global glut. [O/R]
Imperial Oil posted a C$1 billion profit in the year-ago quarter due to a C$716 million gain from the sale of some of its retail sites.
In its refining business, Imperial Oil’s throughput averaged 385,000 barrels per day, lower than the 407,000 barrels per day in the year-earlier quarter.
Total revenue and other income fell to C$7.16 billion from C$7.44 billion.
Exxon Mobil Corp, which has a majority stake in Imperial Oil, reported a 50 percent jump in profit to $3.97 billion in its third quarter.
Reporting by Karan Nagarkatti in Bengaluru and Ethan Lou in Calgary, Alberta; editing by Arun Koyyur, Savio D'Souza and G Crosse