November 1, 2010 / 6:10 PM / 7 years ago

UPDATE 2-Imperial profit falls on lower output, pipe woes

* Q3 EPS C$0.49 vs estimated C$0.51

* Oil output down 8 pct, gas down 2 pct

* Shares down C$0.05 at C$39.17 (Adds details on Kearl project, downstream results, stock price)

CALGARY, Alberta, Nov 1 (Reuters) - Imperial Oil Ltd (IMO.TO) said on Monday its third-quarter profit fell 24 percent due to lower oil sands output, the rising Canadian dollar and Enbridge Inc’s (ENB.TO) pipeline outages.

The company, Canada’s No. 2 oil producer and refiner, also said it will spend more than the C$8 billion ($7.84 billion) budgeted for the first phase of its Kearl oil sands project as it rejigs plans, but did not say by how much.

Imperial earned C$418 million ($410 million), or 49 Canadian cents a share, down from C$547 million, or 64 Canadian cents a share, in the year-before quarter.

Analysts, on average, had expected earnings of 51 Canadian cents a share, according to Thomson Reuters I/B/E/S.

Results included a C$10 million gain on asset sales.

Revenues were C$5.85 billion, up 5 percent from C$5.56 billion in the year-earlier quarter.

Imperial, known for its dominant position in oil sands and heavy crude, and its national chain of Esso gas stations, said its earnings were cut by C$90 million due to lower output at the Syncrude Canada Ltd oil sands venture, which had a longer than expected maintenance outage.

The shutdowns of Enbridge’s 6A and 6B oil pipelines in the U.S. Midwest reduced income by C$60 million, and the impact will carry into the fourth quarter, it said. Those outages backed crude up into Alberta and led to hefty discounts in the price of Canadian oil in August and September.

Meanwhile, the strong Canadian dollar compared with the U.S. greenback cut profit by C$70 million, it said.

The results were cushioned somewhat by Imperial’s refining and marketing as well as chemicals divisions.

Net income at refining and marketing rose 11 percent to C$69 million on improved refinery operations and sales. Chemicals earnings rose 21 percent to C$23 million.

Imperial said it has altered plans to build Kearl, a joint venture with Exxon Mobil Corp (XOM.N), in three 110,000 bpd phases, with total production of 330,000 bpd by 2020.

The initial stage, to be completed by late 2012, remains mostly unchanged, with the exception of adding equipment that will be used in future expansions, spokesman Pius Rolheiser said. Later phases will include a stage that boosts operations to increase the final capacity of the project to 345,000 bpd, he said.

The company is also waiting for Canada’s energy regulator to give the go-ahead on the C$16.2 billion Mackenzie Valley gas pipeline. Such a decision is expected as early as the end of this month.

Imperial said oil production in the quarter averaged 234,000 barrels a day, down 8 percent from a year earlier. Natural gas output fell 2 percent to 284 million cubic feet a day.

Imperial shares were down 5 Canadian cents at C$39.17 on the Toronto Stock Exchange on Monday.

Exxon Mobil owns 69.6 percent of Imperial.

$1=$1.02 Canadian Reporting by Jeffrey Jones; editing by Peter Galloway

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