Imperial Oil doubles 3-month profit - Soaring crude, gas prices fuel rich returns across industry - Canada's biggest producer drills $454 million in earnings
www.thestar.com Jan. 23, 2003. 01:00 AM
Fourth-quarter profit more than doubled for Imperial Oil Ltd. because of sky-high crude and natural gas prices that are fuelling rich returns across the energy industry, the company said yesterday.
Imperial, Canada's biggest oil producer, refiner and retailer, also said better profit margins at its refining and marketing division helped drive the better-than-expected results.
The company, which is majority-owned by U.S. oil giant Exxon Mobil Corp., earned $454 million, or $1.19 cents a share, up from year-earlier $194 million, or 51 cents a share. That beat an average estimate of 91 cents among analysts polled by Thomson First Call.
Revenue was $4.8 billion, up from $3.5 billion in the fourth quarter of 2002.
Full-year profit was $1.21 billion, down from $1.24 in 2001, although earnings per share rose to $3.19 from $3.15 as Imperial cut the amount of stock outstanding under a buyback.
That represented the company's third-highest annual profit, Imperial chief executive Tim Hearn said.
"As a result, we were able to successfully complete one of our largest capital programs ever, while retaining a very strong financial position," Hearn said in a statement.
The stock closed up 59 cents at $44.99 yesterday, continuing a nearly flat performance since the start of the fourth quarter.
Imperial, known for its national chain of Esso service stations and dominant position in western Canadian heavy oil and oil sands, has the biggest stake in the Syncrude Canada oil-sands venture in Alberta and owns the province's Cold Lake bitumen project. Both are undergoing major expansions.
It is also leading a consortium of major oil companies planning a $4 billion pipeline to tap huge gas reserves in the Mackenzie Delta of the Northwest Territories.
Imperial's jump in fourth-quarter earnings follows a strong showing Tuesday from rival Suncor Energy Inc., and analysts expect similar results throughout the industry thanks to sizzling oil and gas markets.
In the quarter, crude prices jumped 38 per cent from 2001 on fears of a Middle East war, and after a strike in Venezuela that cut shipments from the world's fifth-largest exporter.
Canadian natural gas prices soared 67 per cent from the fourth quarter of 2001 amid cold weather in major U.S. consuming regions and lower-than-average inventories.
Earnings at Imperial's resources division surged 160 per cent to $312 million even as oil production slipped by 1,000 barrels a day to 255,000 and natural gas sales fell by 50 million cubic feet a day to 475 million.
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