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DATE
Friday, July 31, 2026 at 11:00 a.m. ET
CALL PARTICIPANTS
- Chairman, President and Chief Executive Officer – John Whelan
- Senior Vice President, Finance and Administration – Dan Lyons
- Senior Vice President of the Upstream – Cheryl Gomez-Smith
- Vice President of the Downstream – Scott Maloney
- Vice President of Investor Relations – Peter Shaw
TAKEAWAYS
- Net Income — $2,190 million, an increase of $1,241 million from the second quarter of 2025 primarily driven by higher commodity prices.
- Upstream Production — 414,000 gross oil-equivalent barrels per day, reflecting a 5,000 barrel-per-day decrease from the first quarter due to planned turnaround activity and severe weather.
- Downstream Throughput — 331,000 barrels per day, representing 76% capacity utilization due to planned turnaround work at the Strathcona refinery.
- Revised Throughput Guidance — 370,000 barrels to 380,000 barrels per day for the full year, a 6% reduction from prior guidance reflecting unplanned downtime and rail congestion.
- Revised Utilization Guidance — 85% to 88% for the full year, updated from the previous range of 91% to 93%.
- Upstream Earnings — $1,299 million, up $829 million from the first quarter of 2026 driven by higher crude realizations.
- Downstream Earnings — $787 million, a sequential increase of $176 million as improved market margins offset turnaround impacts.
- Chemical Earnings — $65 million, representing a $41 million year-over-year increase due to improved polyethylene margins.
- Cash Flow from Operations — $2,704 million, compared to $1,465 million in the prior-year period.
- Cash Flow Excluding Working Capital — $2,522 million, an increase of approximately $1.1 billion versus the second quarter of 2025.
- Kearl Production — 257,000 gross barrels per day, impacted by planned turnaround work and the absence of exceptional ore grades encountered in the prior-year period.
- Cold Lake Production — 149,000 gross barrels per day, supported by the Leming SAGD project ramp-up and Grand Rapids solvent-assisted technology.
- Syncrude Production — 73,000 gross barrels per day (Imperial’s share), including 11,000 barrels per day of premium production enabled by the interconnect pipeline.
- Capital Expenditures — $531 million, an increase of $58 million from last year focused on sustaining capital across the upstream assets.
- Shareholder Distributions — $421 million in dividends paid during the quarter, with an $0.87 per share dividend declared for the third quarter.
- NCIB Buyback Program — 24,179,635 common shares, representing 5% of outstanding shares, which management plans to repurchase entirely before year-end.
- Bitumen Realizations — $95.79 per barrel, an increase of $29.97 per barrel versus the second quarter of 2025.
- Synthetic Crude Realizations — $141.10 per barrel, driven by higher marker prices and an improved synthetic-to-WTI spread.
- Kearl Unit Cash Costs — $21.48 USD per barrel ($29.83 CAD), with management targeting $18 USD per barrel by 2027.
- Cold Lake Unit Cash Costs — $15.40 USD per barrel ($21.39 CAD).
- Refining Margin Factors — $190 million negative impact from planned turnarounds, partially offset by $140 million in favorable product mix effects.
- G&A Cost Reduction — $150 million target for annual cash operating expense savings by 2028 through business restructuring.
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RISKS
- Whelan stated, “we’ve lowered our downstream throughput guidance by approximately 6%,” primarily due to rail congestion at Strathcona and unplanned downtime at Nanticoke.
- Whelan noted that “as we ramped up renewable diesel, we also identified congestion in some areas of our rail yard,” requiring additional capital to lay extra track.
- Whelan indicated that “given the results of the first half of the year, we now expect full year upstream production to be towards the low end of the guidance range.”
SUMMARY
Imperial Oil Limited (IMO -2.05%) reported an increase in net income for the second quarter, driven by higher commodity price realizations across its Upstream, Downstream, and Chemical segments. Management reported the completion of significant turnaround activity at major facilities, including the Strathcona refinery and the Kearl oil sands site, both of which were executed ahead of schedule. The company stated that it is entering the second half of the year with lower planned maintenance and higher expected throughput volumes. Management also confirmed an acceleration of its share repurchase program, targeting the completion of its full normal course issuer bid allowance by the end of the year.
- Chairman Whelan stated, “Our annual dividend has now grown for 31 consecutive years,” highlighting the company’s long-term history of distribution growth.
- The company completed a turnaround on the Kearl K1 train, extending maintenance intervals to four years to reduce long-term downtime and absolute costs.
- Management is advancing the secondary recovery flotation column project at Kearl, with production expected to start in the fourth quarter of 2026.
- The company is decommissioning the oldest plant at Cold Lake, Leming, and transferring its production to existing capacity at the Maskwa and Mahkeses plants to reduce the cost structure.
- CEO Whelan noted that the Strathcona renewable diesel facility, the largest in Canada, “continues to generate highly attractive economics relative to more costly imports.”
- The company expects to start seeing first production from the Kearl East pit in Nov. or Dec., where delineation data indicates higher ore quality.
- Imperial signed a trilateral Memorandum of Understanding with the governments of Canada and Alberta to enhance oil sands competitiveness and support production growth.
INDUSTRY GLOSSARY
- Bitumen: A dense and highly viscous form of petroleum that requires specialized extraction methods such as mining or steam injection.
- NCIB (Normal Course Issuer Bid): A Canadian term for a share repurchase program where a company buys back its own shares through a public exchange.
- SAGD (Steam-Assisted Gravity Drainage): An enhanced oil recovery technology for producing heavy crude oil by injecting steam into the reservoir.
- Synthetic Crude Oil: An intermediate crude oil produced from bitumen through an upgrading process that removes impurities and lightens the oil.
- Turnaround: A planned, periodic shutdown of a refinery or processing unit for maintenance, inspection, and repairs.
- WTI/WCS Spread: The price difference between West Texas Intermediate (a light oil benchmark) and Western Canada Select (a heavy oil benchmark).
Full Conference Call Transcript
Operator: Good day, and welcome to the Imperial Oil Second Quarter 2026 Earnings Call. Today’s conference is being recorded. At this time, I wo
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