ALBERTA

Imperial Oil Q2 profit falls, mainly due to impact of N.S. refinery conversion

08/01/2013 08:16 EDT | Updated 10/01/2013 05:12 EDT
CALGARY - Imperial Oil Ltd. (TSX:IMO) said Thursday its second-quarter profits were cut nearly in half compared to a year earlier, mostly due to a charge related to the conversion of its refinery in Dartmouth, N.S.

Net income was $327 million, or 38 cents per share, in the second quarter, a decline from $635 million in the year-earlier period and well short of the 85 cents per share analysts had been expecting, according to Thomson Reuters.

The main reason cited by the Calgary-based company was a $264-million non-cash charge related with its conversion of a Dartmouth refinery into a fuels terminal.

Production averaged 276,000 barrels per day, an increase of 7,000 barrels.

Imperial, majority-owned by Houston-based energy heavyweight ExxonMobil Corp. (NYSE:XOM), started up its 110,000-barrel-per-day Kearl oilsands mine north of Fort McMurray Alta., earlier this year and production is gradually ramping up to full rates.

That project ended up costing $12.9 billion, a substantial increase from its previous budget of $10.9 billion as trouble getting heavy equipment to the mine site and inclement weather added to the pricetag.

A second phase of Kearl is under construction, with an expected 2015 startup.

Elsewhere in the oilsands, Imperial has a 25 per cent interest in the Syncrude joint venture and massive steam-driven operations at Cold Lake.

Imperial and Exxon are in the early stages of a plan to ship natural gas off Canada's West Coast in liquid form, so that the resource can fetch a higher price in Asian markets.

Together, Imperial and Exxon have a large acreage position in northeastern B.C.'s gas-rich Horn River Basin, recently augmented by the $3.1-billion acquisition of Celtic Exploration, which had shale gas holdings in the Montney formation in B.C. and the Duvernay formation in Alberta.

Imperial operates refineries in Alberta and Ontario, and a chain of Esso-branded gas stations.

Its shares fell 2.4 per cent to $43.01 on the Toronto Stock Exchange on Thursday.

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