• Production up 26 percent, liquids at record 399,000 barrels per day
• Upstream unit cash costs reduced by 25 percent
• Sale of company-owned retail stations proceeding for $2.8 billion

CALGARY, April 29, 2016 /CNW/ -

In what continues to be a challenging business environment, the company
made significant progress on strategic priorities. Specifically, we
delivered upstream production growth, achieving a quarterly record for
liquids production, and we increased refinery throughput, maximizing
the value of existing assets. We also announced the sale of our
remaining company-owned retail sites, completing the conversion to a
branded wholesaler operating model. The transactions, valued at $2.8
billion, are expected to close throughout the remainder of 2016,
subject to regulatory approvals.

The company recorded an estimated loss of $101 million in the first
quarter of 2016, or $0.12 per share, as compared with net income of
$421 million, or $0.50 per share for the comparable period in 2015.
Sharply lower global crude prices, last experienced more than a decade
ago, drove the first quarter loss.

"Recognizing the uncertain market conditions, particularly in the
upstream, our focus remains on what we can control," said Rich Kruger,
chairman, president and chief executive officer. "Our integrated
business model and strong balance sheet continue to support resiliency
throughout the commodity price cycle and ensure the company remains
well positioned for the future."

Imperial continues to reduce cash operating costs and increase
selectivity of capital expenditures. Upstream unit cash costs were
reduced by 25 percent, compared to the first quarter of 2015,
reflecting ongoing efforts to lower expenses while growing production
and improving reliability. Capital expenditures were also down
significantly versus 2015, associated with the successful completion of
upstream growth projects and increased scrutiny of all discretionary
investments.

Imperial's high-quality asset base, disciplined investment and cost
management, and focus on operational excellence enable it to create
long-term shareholder value despite near-term market conditions.

First quarter highlights

• Net loss of $101 million or $0.12 per share on a diluted basis, down from net income of $421 million or $0.50 per share in the first
  quarter of 2015.
• Production averaged 421,000 gross oil-equivalent barrels per day, up 26 percent from 333,000 gross oil-equivalent barrels per day in the
  same period of 2015. The company achieved its highest-ever liquids
  production in the quarter.
• Refinery throughput averaged 398,000 barrels per day, up from 393,000 barrels in the first quarter of 2015, due to a continued
  focus on reliability. Capacity utilization increased to 94 percent.
• Petroleum product sales were 469,000 barrels per day, compared to 474,000 barrels per day in the first quarter of 2015. As we
  pursue growth in profitable Canadian markets, we continue to hold a
  leading market share in all product segments nationwide.
• Cash generated from operating activities was $49 million, a decrease of $232 million from the first quarter of 2015, primarily due
  to lower earnings as a result of lower global crude prices.
• Capital and exploration expenditures totalled $408 million, down $642 million from the first quarter of 2015, reflecting the
  successful completion of upstream growth projects, focus on capturing
  market related cost reductions and increased scrutiny of discretionary
  investments.
• Kearl bitumen production averaged 194,000 barrels per day in the quarter (138,000 barrels Imperial's share), more than double the 95,000 barrels
  per day in the first quarter of 2015 (67,000 barrels Imperial's share).
  Total production was down 4 percent from the fourth quarter of 2015 as
  a result of maintenance activities. Since start-up, Kearl diluted
  bitumen continues to be broadly marketed and now has been processed at
  more than 35 refineries.
• Cold Lake bitumen production averaged 165,000 barrels per day in the
  quarter, up from 152,000 barrels per day in the same quarter of 2015, as
  increased production from Nabiye was partially offset by cycle timing
  in the base operation.
• Syncrude production averaged 80,000 barrels per day in the first quarter
  (Imperial's share), up from 73,000 barrels per day in the same period of
  2015. Syncrude's performance was underpinned by continued efforts to
  improve asset reliability. In early April, Syncrude started a planned
  six-week maintenance turnaround on one of its three coker facilities.
• Cold Lake expansion project seeks regulatory approval. The proposed 50,000 barrels per day in-situ facility will use
  proprietary solvent-assisted, steam-assisted gravity drainage (SA-SAGD)
  technology to develop bitumen resource on the existing Cold Lake lease.
  The technology, successfully piloted since 2010, is expected to reduce
  greenhouse gas emissions by 25 percent compared to existing SAGD
  methods. A similar reduction in water use is also expected. Subject to
  timely regulatory approvals and favourable business conditions,
  construction could start as early as 2019, with production commencing
  as early as 2022. No final investment decision has been made at this
  time.
• Esso-branded distributors to purchase remaining company-owned retail
  sites for $2.8 billion. Five existing distributors signed agreements to assume ownership and
  operation of the remaining 497 Imperial-owned stations. Imperial will
  continue to invest in growth of the Esso brand through fuel product
  innovation, marketing and loyalty programs. Once complete, the entire
  network of more than 1,700 Esso-branded sites will operate under the
  branded wholesaler distribution model. The transactions are expected to
  close throughout 2016, subject to regulatory approvals.
• Esso Medals and Certificates of Achievement program recognizes 300,000
  minor hockey players who set an example of sportsmanship on and off the ice. This year, more
  than 350,000 Esso fuel discount cards were given to families at Hockey
  Canada events. In January, Imperial sponsored Calgary Hockey and Esso
  Minor Hockey Week, the largest minor hockey tournament in the world,
  for the 37th consecutive year.

First quarter 2016 vs. first quarter 2015

The company's net loss for the first quarter of 2016 was $101 million or
$0.12 per share on a diluted basis, compared to net income of $421
million or $0.50 per share for the same period last year.

Upstream recorded a net loss in the first quarter of $448 million,
compared to a net loss of $189 million in the same period of 2015.
Results in the first quarter of 2016 reflected lower realizations of
about $355 million, partially offset by the impact of a weaker Canadian
dollar of about $70 million.

West Texas Intermediate (WTI) averaged US$33.63 per barrel in the first
quarter of 2016, down from US$48.57 per barrel in the same quarter of
2015. Western Canada Select (WCS) averaged US$19.30 per barrel and
US$33.88 per barrel respectively for the same periods. The WTI / WCS
differential widened to 43 percent in the first quarter of 2016 as
global surplus crude barrels cleared in the U.S. Gulf Coast.

During the first quarter of 2016, the Canadian dollar weakened relative
to the U.S. dollar largely reflecting lower crude oil prices. The
Canadian dollar averaged US$0.73 in the first quarter of 2016, a
decrease of US$0.08 from the first quarter of 2015.

The company's average Canadian dollar realizations for bitumen and
synthetic crudes declined essentially in line with the North American
benchmarks, adjusted for changes in the exchange rate and
transportation costs. Bitumen realizations averaged $11.92 per barrel
for the first quarter of 2016, a decrease of $15.48 per barrel versus
the first quarter of 2015. Synthetic crude realizations averaged $46.32
per barrel, a decrease of $9.49 per barrel for the same period of 2015.

Gross production of Kearl bitumen averaged 194,000 barrels per day in
the first quarter (138,000 barrels Imperial's share) up from 95,000
barrels per day (67,000 barrels Imperial's share) during the first
quarter of 2015, reflecting the start-up of the Kearl expansion project
and continued improvement in reliability of the initial development.

Gross production of Cold Lake bitumen averaged 165,000 barrels per day
in the first quarter, up from 152,000 barrels in the same period last
year. Incremental volumes from Nabiye offset cycle timing in the base
operation.

The company's share of gross production from Syncrude averaged 80,000
barrels per day, up from 73,000 barrels in the first quarter of 2015,
reflecting improved reliability of the operations.

Downstream net income was $320 million in the first quarter, compared to
$565 million in the same period of 2015. Earnings decreased mainly due
to lower refinery margins of about $395 million, partially offset by
the favourable impact of a weaker Canadian dollar of about $120
million.

Refinery throughput averaged 398,000 barrels per day, up from 393,000
barrels in the first quarter of 2015, due to a continued focus on
reliability. Capacity utilization increased to 94 percent.

Petroleum product sales were 469,000 barrels per day, compared to
474,000 barrels per day in the first quarter of 2015.

Chemical net income was $49 million in the first quarter, compared to
$66 million in the same quarter of 2015. The decrease was due to lower
margins.

Net income effects from Corporate and Other were negative $22 million in
the first quarter, compared to negative $21 million in the same period
of 2015.

Cash flow generated from operating activities was $49 million in the
first quarter, compared with $281 million in the corresponding period
in 2015, reflecting lower earnings as a result of a decrease in global
crude prices.

Investing activities used net cash of $358 million in the first quarter,
compared with $1,002 million in the same period of 2015, reflecting the
decline in additions to property, plant and equipment.

Cash from financing activities was $261 million in the first quarter,
compared with cash from financing activities of $566 million in the
first quarter of 2015. Dividends paid in the first quarter of 2016 were
$119 million. The per-share dividend paid in the first quarter was
$0.14, up from $0.13 in the same period of 2015.

The company's cash balance was $155 million at March 31, 2016, versus
$60 million at the end of the first quarter of 2015.

Key financial and operating data follow.

Forward-Looking Statements

Statements of future events or conditions in this report, including
projections, targets, expectations, estimates, and business plans are
forward-looking statements. Actual future financial and operating
results, including demand growth and energy source mix; production
growth and mix; project plans, dates, costs and capacities; production
rates; production life and resource recoveries; cost savings; product
sales; financing sources; and capital and environmental expenditures
could differ materially depending on a number of factors, such as
changes in the supply of and demand for crude oil, natural gas, and
petroleum and petrochemical products and resulting price impacts;
availability and allocation of capital; currency exchange rates;
political or regulatory events; project schedules; commercial
negotiations; the receipt, in a timely manner, of regulatory and
third-party approvals; unanticipated operational disruptions;
unexpected technological developments; and other factors discussed in
this report and Item 1A of Imperial's most recent Form 10-K.
Forward-looking statements are not guarantees of future performance and
involve a number of risks and uncertainties, some that are similar to
other oil and gas companies and some that are unique to Imperial.
Imperial's actual results may differ materially from those expressed or
implied by its forward-looking statements and readers are cautioned not
to place undue reliance on them. Imperial undertakes no obligation to
update any forward-looking statements contained herein, except as
required by applicable law.

The term "project" as used in this release can refer to a variety of
different activities and does not necessarily have the same meaning as
in any government payment transparency reports.

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.

SOURCE Imperial Oil Limited