(Reuters) - Imperial Oil Ltd, Canada’s No. 2 integrated oil producer and refiner, reported a better-than-expected quarterly profit as the company’s aggressive cost-cutting measures helped cushion the impact of lower oil prices.
However, the company said some oil assets would not qualify as proved reserves at the end of 2016, if oil prices range at current levels for the rest of the year.
These include all, or part of oil sands assets at Kearl and Cold Lake in Alberta, Imperial Oil said on Friday.
Shares of the company were down 1.1 percent at C$44.38 in morning trading.
Brent crude has risen 35.4 percent since the beginning of 2016, to average at about $44 per barrel, but is still lower than last year’s average of about $55 per barrel for the same period.
To counter the lower prices, Imperial Oil, which is 69.6 percent owned by Exxon Mobil Corp, has kept a tight leash on costs.
The company’s upstream unit cash costs averaged less than $20 per barrel year to date, a decline of more than 35 percent since 2014 when global crude prices began to slide, Chief Executive Rich Kruger said in a statement.
Capital and exploration expenditures in the third quarter were C$205 million, down C$937 million from 2015, the company said.
Imperial Oil said it continued to evaluate future investments in the light of overall market and business conditions.
The company’s quarterly production marginally increased by nearly 2 percent to 393,000 gross oil-equivalent barrels per day.
Imperial Oil’s net income jumped to C$1 billion ($746.60 million), or C$1.18 per share, in the third quarter, from C$479 million, or 56 Canadian cents per share, a year earlier.
The company’s quarterly profit more than doubled due to a C$716 million gain from the sale of some of its retail sites.
The sale of the company-owned Esso retail sites for C$2.8 billion, announced in the first quarter, is expected to close by the end of the year.
Quarterly adjusted net income was 34 Canadian cents per share, higher than analysts’ average estimate of 31 Canadian cents per share, according to Thomson Reuters I/B/E/S.
Total revenue and other income rose 4 percent to C$7.44 billion.
Reporting by Vishaka George in Bengaluru; Editing by Shounak Dasgupta and Sriraj Kalluvila