3 Min Read
(Recasts throughout to add comment and detail; updates shares)
CALGARY, Alberta, July 31 (Reuters) - Imperial Oil Ltd reported a tripling of profit on Thursday and said production at its Kearl oil sands project was approaching its 110,000 barrel per day capacity as it continued to tweak operations at Canada's newest oil sands mine.
Canada's No.2 integrated oil company said second-quarter net income jumped 277 percent on rising production, higher oil prices and a big gain from the sale of some of its conventional oil and gas assets.
Production at the C$12.9-billion ($11.8 billion) Kearl project averaged 73,000 barrels per day in the quarter, up from a minimal contribution a year earlier, though output was constrained by April maintenance.
The company, 69.6 percent owned by Exxon Mobil Corp, has striven to boost output at the project located 70 km north of Fort McMurray, originally forecasting the mine would reach full capacity in 2013.
It said production rates had climbed to 85,000 bpd by June and identified opportunities to raise output further, but did not say how soon it would reach its 110,000 bpd target.
Kearl's C$8.9 billion second phase, which will double the size of the project, is ahead of schedule with construction 90 percent complete, Imperial said. Though it did not revise its plan to begin operating the expansion in late 2015, some expect the facility to begin production ahead of the company's target.
"We are beginning to believe start up for the project will happen in mid-2015, earlier than our expectation for late in the year," Arthur Grayfer, an analyst with CIBC World Markets, said in a research note.
The company's net income leapt to C$1.23 billion, or C$1.45 per share, from C$327 million, or 38 Canadian cents per share, a year earlier.
The quarter included a C$478 million gain associated with the sale of interests in several conventional upstream producing assets.
Revenue rose 26 percent to C$10.05 billion.
It sold synthetic crude oil for an average price of C$111.95 per barrel, up 11 percent from the second quarter of 2013.
The company's earnings also got a C$70 million boost from a weaker Canadian dollar and C$55 million from higher bitumen realizations.
Imperial's oil production averaged 287,0000 bpd, up from 276,000 bpd, while natural gas output fell 15 percent to 155 million cubic feet per day.
The company's shares were down 69 Canadian cents at C$55.86 in afternoon trading on the Toronto Stock Exchange.
$1 = 1.0892 Canadian Dollars Reporting by Scott Haggett in Calgary and Sneha Banerjee in Bangalore; Editing by Savio D'Souza, Saumyadeb Chakrabarty and Bernadette Baum