Imperial Oil Ltd. (IMO), the Canadian company that’s planning to more than double its output this decade, said second-quarter profit declined 13 percent as crude prices and production dropped.
Net income fell to C$635 million ($630 million), or 75 cents a share, from C$726 million, or 85 cents, a year earlier, the Calgary-based company said in a statement today. Sales decreased 3.3 percent to C$7.52 billion.
Imperial, which is 70 percent owned by Exxon Mobil Corp. (XOM:US), said production fell because of maintenance work at its Cold Lake oil-sands project and at Syncrude Canada Ltd. Gross oil output decreased 4.9 percent to 232,000 barrels a day from 244,000 a year earlier.
Prices for West Texas Intermediate, the U.S. benchmark for crude, averaged $93.35 a barrel in the second quarter, down 8.8 percent from $102.34 a year earlier. Western Canada Select, a Canadian blend used to price crude from oil sands, fell 13 percent to $73.53 a barrel from $84.72 in the same period a year earlier.
Imperial expects its Kearl oil-sands project to begin operating later this year, it said. The project will have initial capacity to produce 110,000 barrels a day, rising to 345,000 barrels by the end of this decade, according to the company’s website.
Oil producers gained today after the fuel rose for a third day in New York. U.S. reports on durable goods and jobless claims reduced concern that economic growth is slowing and the head of the European Central Bank pledged that the euro will survive.
Imperial climbed 0.9 percent to C$42.77 at the close in Toronto. The stock, which has declined 5.8 percent this year, has four buy, 10 hold and two sell ratings from analysts.
To contact the reporter on this story: Jeremy van Loon in Calgary at firstname.lastname@example.org
To contact the editor responsible for this story: Susan Warren at email@example.com