Page 9 - NorthAmOil Week 18 2022

NorthAmOil PERFORMANCE NorthAmOil

Imperial posts highest net income in 30 years

CANADA CANADA’S Imperial Oil posted net income downgrade its full-year production forecasts
of CAD1.2bn ($914mn) in the first quarter of after a planned five-week maintenance turna-
2022 on the back of strong oil and gas prices, round concludes in late June.
representing its highest total in 30 years. The Meanwhile, Imperial reported quarterly
figure was almost triple what the company refinery capacity utilisation of 93%, with this
achieved a year ago, when it posted net income marking its third consecutive quarter of rates
of CAD392mn ($305mn). above 90%. The company’s refinery through-
Extreme cold weather The Calgary-headquartered firm, which put rose 9.6% to 399,000 barrels per day (bpd),
caused an extended is majority owned by ExxonMobil, said with the increase spurred by higher demand for
unplanned outage at its upstream income totalled CAD782mn fuels and other refined products. With pandemic
Imperial’s Kearl oil ($609mn) in the quarter, while downstream restrictions beginning to lift late in the quarter,
sands mine during the income was CAD389mn ($303mn). Imperial’s petroleum product sales averaged
first quarter. The company’s increased earnings came 447,000 bpd.
despite lower output. Imperial’s quarterly gross The company also announced a substan-
upstream production averaged 380,000 barrels tial issuer bid, which will see it buy back up to
of oil equivalent per day, down from 432,000 CAD2.5bn ($1.95bn) of its common shares. The
boepd in the first quarter of last year. Production buyback will begin in the next two weeks, with
at the company’s Kearl oil sands mine averaged officials saying the decision was driven by plenti-
186,000 boepd, which is also lower year on year, ful cash on Imperial’s balance sheet. The company
down by 65,000 boepd. declared a dividend of CAD0.34 ($0.27) per share.
The lower-than-expected output was largely During the first quarter, Imperial completed
attributed to extreme cold weather in Northern construction of the Sarnia products pipeline
Alberta, which caused an extended unplanned ahead of schedule, with start-up and commis-
outage at Kearl. Operations have since returned sioning finished in April. The pipeline will pro-
to normal. vide enhanced access to the high-value Toronto
Imperial’s CEO, Brad Corson, said the market and is projected to reduce annual trans-
company would assess whether it will need to portation costs by CAD40mn ($31mn). ™

Hess beats earnings expectations

but issues caution over rising costs

AMERICAS US independent producer Hess reported a profit anticipated its net production for the full year to
for the first quarter of the year that beat Wall be at the lower end of its 325,000-330,000 boepd
Street estimates amid strong oil prices. However, guidance. Severe winter storms that hampered
the New York-headquartered company warned production in North Dakota were cited as the
of rising costs as well as citing a hit to its produc- key factor responsible for lower guidance.
tion as a result of weather-related issues in the Hess warned it was dealing with rising costs
Bakken play. for materials. “Like our competitors, we’re also
Winter storms in North Hess said its average realised crude selling seeing upward cost pressure across both onshore
Dakota affected Hess’ price had spiked to $86.75 per barrel in the latest and offshore businesses,” Hess’ CEO, John Hess,
Bakken production. quarter, up from $50.02 per barrel a year ago. told analysts. The firm cautioned that inflation
The company reported that net income attrib- could require it to add $80-100mn to its capital
utable to the firm had risen 65% year on year to programme this year, noting that drilling and
$417mn, or $1.34 per share, in the first quarter. completion costs in the Bakken had risen by 7%
On an adjusted basis, the company earned $1.30 since last year to reach $6.2mn per well.
per share, above analysts’ average estimate of A day before it released its results, Hess
$1.13 per share according to Refinitiv IBES. announced that it had discovered oil in three
Favourable market conditions helped offset new wells off the coast of Guyana together with
lower than anticipated production caused by partners ExxonMobil and China National Off-
unplanned downtime, severe weather and field shore Oil Corp. (CNOOC). The find is expected
declines. Excluding its operations in Libya, the to increase recoverable oil and gas potential from
firm said its net production had dropped by its discoveries to close to 11bn barrels.
12% to 276,000 barrels of oil equivalent per day The firm expects seven 1mn barrel liftings
(boepd) in the quarter, largely as a result of out- from Guyana in the second quarter and antici-
put declines and unplanned downtime in the pates eight 1mn barrel liftings in both the third
US Gulf of Mexico. The company said it now and fourth quarters.™

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