• Quarterly net income of $1,365 million
• Cash flow from operating activities of $1,311 million and cash flow from operating activities excluding working capital1 of $1,799 million
• Upstream production of 452,000 gross oil-equivalent barrels per day, highest in over 30 years when adjusted for divestment of XTO Energy Canada
• Highest ever quarterly production at Kearl of 308,000 total gross oil-equivalent barrels per day (218,000 barrels Imperial's share)
• Started steam injection at Cold Lake Grand Rapids, which will be the first deployment in industry of solvent-assisted SAGD technology
• Strong Downstream operating performance with refinery capacity utilization of 94 percent, following completion of the largest planned turnaround in Sarnia site history
• Returned more than $2.7 billion to shareholders in the fourth quarter, including successful completion of the substantial issuer bid
• Quarterly dividend increased by 20 percent from 50 cents to 60 cents per share
• Released annual corporate Sustainability report, outlining the company's sustainability focus areas and progress

Imperial reported estimated net income in the fourth quarter of $1,365 million and cash flow from operating activities of $1,311 million, compared to net income of $1,601 million and cash flow from operating activities of $2,359 million in the third quarter of 2023. Excluding the impacts of working capital1, cash flow from operating activities was $1,799 million, compared to $1,946 million in the third quarter. Fourth quarter results reflect strong operating performance, which was more than offset by weaker commodity prices. Full-year estimated net income was $4,889 million with cash flow from operating activities of $3,734 million. Excluding the impacts of working capital1, full-year cash flow from operating activities was $6,435 million.

“Our strong 2023 financial results were underpinned by solid operational performance across all of our businesses, highlighted by record production and substantial unit cost reductions at Kearl,” said Brad Corson, chairman, president and chief executive officer. “Throughout the year, we also made significant progress on strategic investments that will help lower emissions and capture value for our shareholders, including the Grand Rapids expansion at Cold Lake and the renewable diesel facility at our Strathcona refinery.”

Upstream production in the fourth quarter averaged 452,000 gross oil-equivalent barrels per day, the highest quarterly production in over 30 years when adjusting for the divestment of XTO Energy Canada, with full-year production of 413,000 gross oil-equivalent barrels per day. At Kearl, quarterly total gross production averaged 308,000 barrels per day (218,000 barrels Imperial's share), the highest quarterly production in the asset’s history. Kearl also delivered record full-year production of 270,000 total gross barrels per day (191,000 barrels Imperial's share).

Across other Upstream assets, Cold Lake quarterly gross production averaged 139,000 barrels per day with annual production of 135,000 gross barrels per day. In December, the company began injecting steam at Cold Lake Grand Rapids Phase 1, marking the successful start-up of what will be the industry’s first-ever solvent-assisted steam-assisted gravity drainage (SA-SAGD) project. The project is expected to achieve 15,000 gross barrels per day of production at full rates and also reduce greenhouse gas emissions intensity by up to 40 percent compared to existing steam processes. The initial steam injection phase is expected to last until the end of the first quarter of 2024, with production ramping up over the following months. At Syncrude, quarterly production increased to 85,000 gross barrels per day following the completion of its planned turnaround in the third quarter of 2023, with full-year production of 76,000 barrels per day.

In the Downstream, quarterly throughput averaged 407,000 barrels per day with refinery capacity utilization of 94 percent following the successful completion of the largest planned turnaround in Sarnia site history, which was completed under budget and ahead of schedule in October. Full-year throughput also averaged 407,000 barrels per day with capacity utilization of 94 percent, achieving several full-year production records across the company's refineries. Petroleum product sales in the quarter averaged 476,000 barrels per day with annual sales averaging 471,000 barrels per day. Work on the company’s Strathcona renewable diesel facility continues to progress, with construction of above ground tankage nearing completion. The project remains on-plan with renewable diesel production expected to begin in 2025.

During the quarter, Imperial returned $2,746 million to shareholders through dividend payments, accelerated completion of the company's annual normal course issuer bid program and successful completion of the company's $1.5 billion substantial issuer bid program in December.

“Throughout 2023 Imperial has returned over $4.9 billion to shareholders through our reliable and growing dividend and industry-leading share repurchase program,” said Corson. “We remain confident of our company’s ability to generate robust free cash flow over a range of business conditions and I am pleased to announce a 20 percent increase to our quarterly dividend.”

In November, Imperial released its annual Sustainability report which highlights progress and momentum in the company’s key sustainability focus areas, including the previously announced company-wide net-zero goal in operations through collaboration with government and other industry partners. “Imperial is committed to advancing innovation and strategic partnerships to help address the significant challenge of supplying energy to Canadians in an affordable, secure and sustainable way,” said Corson.

Fourth quarter highlights

• Net income of $1,365 million or $2.47 per share on a diluted basis, compared to $1,727 million or $2.86 per share in the fourth quarter of 2022, primarily driven by lower commodity prices.
• Cash flows from operating activities of $1,311 million, compared to cash flows from operating activities of $2,797 million in the fourth quarter of 2022. Cash flows from operating activities excluding working capital1 of $1,799 million, compared to $2,452 million in the same period of 2022.
• Capital and exploration expenditures totalled $469 million, compared to $488 million in the fourth quarter of 2022.
• The company returned $2,746 million to shareholders in the fourth quarter of 2023, including $288 million in dividends paid, $958 million in share repurchases through its accelerated normal course issuer bid and successful completion of its $1.5 billion substantial issuer bid program in December.
• Production averaged 452,000 gross oil-equivalent barrels per day, the highest quarterly production in over 30 years when adjusting for the divestment of XTO Energy Canada, up from 441,000 gross oil-equivalent barrels per day in the same period of 2022.
• Total gross bitumen production at Kearl averaged 308,000 barrels per day (218,000 barrels Imperial's share), the highest quarterly production in the asset's history, up from 284,000 barrels per day (201,000 barrels Imperial's share) in the fourth quarter of 2022. Higher production was primarily driven by improved reliability, plant capacity utilization, and increased mine equipment productivity.
• Gross bitumen production at Cold Lake averaged 139,000 barrels per day, compared to 141,000 barrels per day in the fourth quarter of 2022.
• Successfully started steam injection at the Cold Lake Grand Rapids Phase 1 (GRP) project. The initial steam injection phase is expected to last until the end of the first quarter of 2024, with production ramping up over the following months. GRP1 will be the first SA-SAGD project in industry and is expected to achieve 15,000 gross barrels per day of production at full rates while also reducing greenhouse gas emissions intensity by up to 40 percent compared to existing cyclic steam stimulation technology.
• The company's share of gross production from Syncrude averaged 85,000 barrels per day, compared to 87,000 barrels per day in the fourth quarter of 2022.
• Refinery throughput averaged 407,000 barrels per day, compared to 433,000 barrels per day in the fourth quarter of 2022. Capacity utilization was 94 percent, compared to 101 percent in the fourth quarter of 2022. Fourth quarter 2023 results include impacts from the planned turnaround in Sarnia, the largest in site history, which was completed under budget and ahead of schedule in October.
• Petroleum product sales were 476,000 barrels per day, compared to 487,000 barrels per day in the fourth quarter of 2022.
• Chemical net income of $17 million in the quarter, compared to $41 million in the fourth quarter of 2022. Lower net income was primarily driven by the impact of planned turnaround activities.
• Released annual Sustainability report which highlights progress and momentum in the company’s key sustainability focus areas, and complements the company’s Advancing Climate Solutions report published in the third quarter of 2023.

Recent business environment

Energy markets began to normalize in 2023, down from their 2022 high. While demand for liquids set a record in 2023, supply continued to grow. During the first half of 2023, the price of crude oil declined, impacted by higher inventory levels. In the second half, crude oil prices increased as a result of strong demand, tight inventory levels, and ongoing actions by OPEC+ oil producers to limit supply. In addition, the Canadian WTI/WCS spread began to weaken in the fourth quarter, but remained in line with 2022 on an annual basis. Throughout 2023, strong demand for gasoline and distillate combined with low inventories kept refining margins strong, but short of 2022 levels on an annual basis. In the fourth quarter refining margins dropped due to higher inventory and lower seasonal demand.

KeyFacts Energy: Imperial Oil Canada country profile