Imperial Plans ‘Substantial’ Buyback on Record Oil Windfall

(Bloomberg) -- Imperial Oil Ltd. plans a “substantial” securities repurchase as surging oil prices deliver record cash to the company, executives announced on Tuesday.

Exxon Mobil Corp.'s Canadian unit reported cash from operations of C$5.5 billion for 2021, the highest in data extending back 30 years, as oil prices surged through the fourth quarter and into the new year to the highest since 2014. The company is now focused on returning that cash to investors, raising its quarterly dividend to 34 cents a share from 27 cents in the fourth quarter.

Imperial is now evaluating a “potential substantial issuer bid,” Brad Corson, chief executive officer, said on an earnings call, without clarifying if he was referring to shares or bonds.

The company's plans largely fall in line with the strategies of other Canadian oil producers that are focused on paying down debt and returning a windfall of cash to investors, rather than substantially expanding production amid higher oil prices. Other announcements in the Imperial call included:

Production at the Kearl oil sands mine has “essentially” returned to normal after a deep freeze at year-end disrupted production
The company plans maintenance turnarounds at its Kearl oil sands mine and Cold Lake thermal oil sands plant in the second quarter, while major maintenance is planned on a coker at the Syncrude plant in the third quarter
Kearl output to range from 265,000 and 270,000 barrels a day this year, and Cold Lake's will range from 135,000 to 140,000
Imperial and Exxon have received “lots of interest” in their XTO Canada assets, which are currently being marketed, but have made no decision on selling them
- The companies are open to selling XTO Canada in pieces
Imperial plans to produce as much as 20,000 barrels a day of renewable diesel at its Strathcona refinery using plant-based feedstock, not animal based