Imperial Oil shares rise as company renews share buybacks

Canada’s Imperial Oil shares rose on Friday as buyers targeted on plans to resume share buybacks, regardless of quarterly earnings slumping 72% year-on-year as upkeep exercise hit manufacturing amid a drop in vitality costs.

Imperial, majority-owned by Exxon Mobil, joined international friends in reporting a decline in second-quarter earnings after oil costs fell within the second quarter, pressured by a banking disaster by which a number of massive lenders failed and fears of a looming recession crimped demand.

The Calgary-based firm’s earnings, nonetheless, met or exceeded analysts’ expectations, and painted an optimistic image for the second half of the yr.

“While we still have major planned turnaround work ahead of us … we expect to see stronger volumes in the second half, most notably in the upstream,” CEO Brad Corson informed analysts on a convention name.

Imperial shares have been final up 4.7% on the Toronto Stock Exchange at $71.47.

The firm mentioned it can renew an annual regular course issuer bid (NCIB) to repurchase shares and deliberate to speed up this system earlier than the tip of the yr.

“With maintenance out of the way at several key assets, we see the company being well-positioned for H2/23 (the second half of 2023),” BMO Capital Markets analyst Randy Ollenberger mentioned in a analysis word, that including Imperial might launch extra buybacks late this yr or early subsequent yr.

Imperial reported internet earnings of $675 million (US$510.82 million), or $1.15 per share, for the quarter ended June 30, down from $2.4 billion or $3.63 per share, a yr earlier.

Average realized costs for Western Canada Select, the benchmark Canadian crude, fell 39% to US$58.49 per barrel whereas second-quarter upstream manufacturing declined 12% to 363,000 barrels of oil equal per day (boepd), harm by maintenance-related stoppages, the corporate mentioned.

Imperial’s crude utilization stood at 90% within the reported quarter, decrease than final yr’s 96% as a result of affect of a deliberate turnaround at its Strathcona refinery in Alberta, which pushed quarterly whole downstream throughput decrease by 6% to 388,000 barrels per day (bpd).

The firm has accomplished building work for increasing a seepage interception system at its Kearl oil sands mine in northern Alberta, meant to resolve a months-long leak of poisonous tailings water from the location that was first found in May 2022 and is the topic of a federal investigation.

Earlier this week Imperial reported a separate oil spill right into a course of water lagoon at its Mahihkan plant close to Cold Lake in northern Alberta that contaminated 12 Canada geese.

(Reporting by Sourasis Bose in Bengaluru and Nia Williams in British Columbia; Editing by Vinay Dwivedi, Matthew Lewis and Marguerita Choy)