Imperial Oil Takes Q4 Hit on Canadian Gas
Imperial Oil, the 69.6%-owned affiliate of US super-major Exxon Mobil, wrote down its unconventional gas assets in western Canada by C$1.17bn (US$895mn) in Q4 2020, leading to a loss for the period of C$1.15bn, it said February 2.
Imperial Oil warned of the loss in December, suggesting an after-tax impairment of between C$900mn and C$1.2bn would be taken in the fourth quarter.
“The past year has proved an exceptionally challenging one, not only for the company and our employees, but society at-large,” CEO Brad Corson said. “Against significant headwinds, Imperial’s operational performance and cost management efforts have exceeded expectations.”
Capital and exploration expenditures in Q4 declined to C$195mn from C$414mn, and to C$874mn from C$1.8bn for the year. On the year, Imperial Oil reported a net loss of C$1.86bn against net income of C$2.2bn in 2019.
Gross oil-equivalent production averaged 460,000 b/d in Q4, the highest quarterly production in 30 years, while gross production at its key Kearl oil sands operation averaged 284,000 b/d, a new quarterly record for the asset.
Excluding the one-time impact of the impairment, Imperial said its earnings continued to improve through the second half of 2020, and in the fourth quarter it generated cash from operations of C$316mn, which includes unfavourable working capital effects of C$218mn.