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Friday, July 29, 2016  

Imperial reports $181 million loss in second quarter of 2016

  • Comprehensive company response to northern Alberta wildfires
  • Wildfires reduced production by 60,000 barrels per day and net income by $170 million
  • Completed major planned maintenance at two refineries, reducing throughput 163,000 barrels per day

  Second quarter Six months
millions of dollars, unless noted 2016 2015 % 2016 2015 %
Net income (loss) (U.S. GAAP) (181) 120 (251) (282) 541 (152)
Net income (loss) per common share
- assuming dilution (dollars)
(0.21) 0.14 (251) (0.33) 0.64 (152)
Capital and exploration expenditures 335 819 (59) 743 1,869 (60)

Calgary, July 29, 2016 - Imperial’s second quarter results were significantly impacted by wildfires in the Fort McMurray, Alberta area and by major planned maintenance activities at two refineries and its oil sands mines.

“Imperial conducted a comprehensive and rapid response to the wildfires in northern Alberta, managing dual priorities of assisting first responders and impacted community members while protecting our workforce and facilities,” said Rich Kruger, chairman, president and chief executive officer.

The company provided accommodation for hundreds of displaced residents and safely evacuated more than 3,300 people by air. Additionally, Imperial donated $100,000 to the Canadian Red Cross, provided 20,000 litres of gasoline to the Royal Canadian Mounted Police and distributed Esso fuel discount cards to evacuees.

“Although our facilities were not damaged by the wildfires, operationally both Kearl and Syncrude were significantly impacted. Kearl production was shutdown periodically in May due to inbound and outbound pipeline constraints. Syncrude operations were halted in early May, the first complete shutdown in the site’s nearly 40-year history, with a staged restart of operations in mid-June,” Kruger said.

Operations in the quarter were further impacted by planned maintenance activities at Kearl, Syncrude and at the Strathcona and Nanticoke refineries. This planned maintenance reduced liquids production by an estimated 40,000 barrels per day (Imperial’s share) and reduced refinery throughput by an estimated 163,000 barrels per day in the quarter. As a result, earnings decreased by an estimated $85 million compared to the same quarter in 2015.

The company recorded an estimated loss of $181 million in the second quarter of 2016 or $0.21 per share, as compared with net income of $120 million or $0.14 per share for the comparable period in 2015. This reduction was due to lower global crude prices and operational impacts from the wildfires and maintenance activities.

In the current challenging business environment Imperial continues to focus on what it can control. In the first half of 2016, upstream unit costs were reduced 18 percent compared to the first half of 2015 and capital expenditures of $743 million were down more than $1.1 billion. The company will continue to reduce operating costs while maintaining the operational .integrity of its assets and, recognizing ongoing uncertainties in the business environment, it will continue to scrutinize all discretionary capital investments.

After more than a century, Imperial continues to be an industry leader in applying technology and innovation to responsibly develop Canada’s energy resources. As Canada’s largest petroleum refiner, a major producer of crude oil and natural gas, a key petrochemical producer and a leading fuels marketer from coast to coast, our company remains committed to high standards across all areas of our business.