Imperial announces second quarter 2026 financial and operating results

• Quarterly net income of $2,190 million
• Cash flows from operating activities of $2,704 million and cash flows from operating activities excluding working capital¹ of $2,522 million
• Quarterly Upstream production of 414,000 gross oil-equivalent barrels per day
• Kearl quarterly production of 257,000 total gross oil-equivalent barrels per day (182,000 barrels Imperial's share)
• Cold Lake quarterly production of 149,000 gross oil-equivalent barrels per day
• Downstream refinery capacity utilization of 76 percent
• Renewed annual normal course issuer bid to repurchase up to five percent of outstanding common shares; plan to accelerate purchases to complete the program prior to year end

CALGARY, Alberta--(BUSINESS WIRE)--Imperial (TSE: IMO) (NYSE American: IMO):

Imperial reported estimated net income in the second quarter of $2,190 million, up from net income of $940 million in the first quarter of 2026, primarily driven by higher commodity prices, partially offset by planned turnaround activities.

Quarterly cash flows from operating activities were $2,704 million, up from $756 million generated in the first quarter of 2026. Excluding the impact of working capital¹, cash flows from operating activities were $2,522 million, up from $1,239 million in the first quarter of 2026.

"Imperial's advantaged integrated business model delivered strong financial results across all operating segments, Upstream, Downstream and Chemical, while completing significant planned turnaround activity," said John Whelan, chairman, president and chief executive officer.

Upstream production in the quarter averaged 414,000 gross oil-equivalent barrels per day. At Kearl, quarterly total gross production averaged 257,000 barrels per day (182,000 barrels Imperial's share) including the successful execution of the planned turnaround. Cold Lake averaged 149,000 barrels per day including strong performance of the solvent-assisted SAGD technology at Grand Rapids. The company's share of Syncrude production in the quarter averaged 73,000 gross barrels per day.

Downstream throughput in the quarter averaged 331,000 barrels per day, resulting in refinery capacity utilization of 76 percent. Throughput was impacted by planned turnaround work at the Strathcona refinery and unplanned downtime. Petroleum product sales averaged 446,000 barrels per day.

Imperial has updated its refinery throughput and refinery utilization guidance ranges for 2026 from 395,000 - 405,000 barrels per day and 91% - 93% utilization to 370,000 - 380,000 barrels per day and 85% - 88% utilization, to reflect unplanned downtime, and a short-term rail logistic challenge at Strathcona which is targeted to be resolved by year end.

During the quarter, Imperial returned $421 million to shareholders through dividend payments and declared a third quarter dividend of 87 cents per share. In June, Imperial renewed its annual normal course issuer bid (NCIB) program allowing the repurchase of up to five percent of its outstanding shares over a 12-month period.

"Having safely completed our heaviest planned turnaround quarter, we anticipate strong volumes and overall performance in the second half of 2026 across our integrated business, supporting robust free cash flow¹ generation," said John Whelan. "Consistent with my confidence in that outlook, I am pleased to announce our plan to accelerate our NCIB share repurchases with a target of completing the program prior to year end."

Second quarter highlights

• Net income of $2,190 million or $4.52 per share on a diluted basis, up from $949 million or $1.86 per share in the second quarter of 2025.
• Cash flows from operating activities of $2,704 million, up from cash flows from operating activities of $1,465 million in the second quarter of 2025. Cash flows from operating activities excluding working capital¹ of $2,522 million, up from $1,413 million in the second quarter of 2025.
• Capital and exploration expenditures totaled $531 million, up from $473 million in the second quarter of 2025.
• The company returned $421 million to shareholders in the second quarter of 2026 through dividends paid.
• Renewed share repurchase program, enabling the purchase of up to five percent of common shares outstanding, a maximum of 24,179,635 shares, during the 12-month period commencing June 29, 2026. Consistent with the company's commitment to return surplus cash to shareholders, Imperial plans to accelerate its share purchases under the NCIB program and anticipates repurchasing all remaining allowable shares prior to year end. Purchase plans may be modified at any time without prior notice.
• Upstream production averaged 414,000 gross oil-equivalent barrels per day, compared to 427,000 gross oil-equivalent barrels per day in the second quarter of 2025, due to lower volumes at Kearl and Syncrude.
• Total gross bitumen production at Kearl averaged 257,000 barrels per day (182,000 barrels Imperial's share), compared to 275,000 barrels per day (195,000 barrels Imperial's share) in the second quarter of 2025, primarily driven by the absence of exceptional high-quality ore grade.
• Gross bitumen production at Cold Lake averaged 149,000 barrels per day, up from 145,000 barrels per day in the second quarter of 2025.
• The company's share of gross production from Syncrude averaged 73,000 barrels per day, compared to 77,000 barrels per day in the second quarter of 2025, primarily driven by extreme rainfall, partially offset by lower unplanned downtime.
• Refinery throughput averaged 331,000 barrels per day, compared to 376,000 barrels per day in the second quarter of 2025. Capacity utilization was 76 percent, compared to 87 percent in the second quarter of 2025. Lower refinery throughput and capacity utilization were primarily due to planned turnaround work at the Strathcona refinery.
• Petroleum product sales were 446,000 barrels per day, compared to 480,000 barrels per day in the second quarter of 2025, aligned with lower throughput related to planned turnaround work at the Strathcona refinery.
• Chemical net income of $65 million in the quarter, up from $21 million in the second quarter of 2025.
• Subsequent to the quarter, a non-binding trilateral Memorandum of Understanding (MOU) was signed between the Government of Canada, the Government of Alberta and the Oil Sands Alliance member companies. The trilateral MOU contemplates a series of regulatory reforms and fiscal measures designed to enhance oil sands competitiveness and support production growth. Advancing the proposed Pathways Project as outlined in the trilateral MOU is subject to, among other things, execution of definitive agreements and regulatory approvals.

Recent business environment

During the second quarter of 2026, the price of crude oil increased relative to the first quarter of 2026, while the Canadian WTI/WCS spread widened slightly. Geopolitical events in the Middle East and increasing supply uncertainty continued to drive volatility in crude oil prices and heavy crude differentials. Industry refining margins improved in the second quarter of 2026, impacted by global product supply disruptions.

Starting in 2025, the United States implemented and adjusted a variety of trade-related measures, including tariffs on certain imports from Canada and several other countries. In response, Canada announced its own retaliatory tariffs. Based on Imperial's assessment of these actions and their effects to date, the company does not expect them to have a material impact on its consolidated financial position, results of operations, or cash flows.

Operating results

Second quarter 2026 vs. second quarter 2025

Price – Average bitumen realizations increased by $29.97 per barrel, primarily driven by higher marker prices, partially offset by a weaker WTI/WCS spread and higher diluent costs. Synthetic crude oil realizations increased by $53.25 per barrel, primarily driven by higher marker prices and an improved Synthetic/WTI spread.

Volume – Lower volumes were primarily driven by lower production at Kearl and Syncrude.

Royalty – Higher royalties were primarily driven by higher commodity prices.

Lower production at Kearl was driven by the absence of exceptional high-quality ore grade versus the second quarter of 2025.

Lower production at Syncrude was driven by extreme rainfall, partially offset by lower unplanned downtime.

Margins – Higher margins primarily reflect improved market conditions.

Other – Primarily due to turnaround impacts of about $190 million partially offset by favourable product mix effects of about $140 million.

Lower refinery throughput and capacity utilization were primarily due to planned turnaround impacts.

Lower petroleum product sales were aligned with lower throughput related to planned turnaround work at the Strathcona refinery.

Imperial has updated its refinery throughput and refinery utilization guidance ranges for 2026 from 395,000 - 405,000 barrels per day and 91% - 93% utilization to 370,000 - 380,000 barrels per day and 85% - 88% utilization, to reflect unplanned downtime, and a short-term rail logistic challenge at Strathcona which is targeted to be resolved by year end.

Margins – Higher margins primarily reflect improved industry polyethylene margins.

Current quarter results reflect lower incentive compensation.

Cash flows from operating activities primarily reflect higher earnings.

Cash flows used in investing activities primarily reflect additions to property, plant, and equipment offset by proceeds from the sale of surplus property in Montreal.

Cash flows used in financing activities primarily reflect:

On June 23, 2026, the company announced by news release that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid and will continue its existing share purchase program. Shareholders may obtain a copy of the Notice of Intention to Make a Normal Course Issuer Bid approved by the TSX without charge by contacting the company. The program enables the company to purchase up to a maximum of 24,179,635 common shares during the period June 29, 2026 to June 28, 2027. This maximum includes shares purchased under the normal course issuer bid from ExxonMobil Holdings Corporation. As in the past, ExxonMobil Holdings Corporation has advised the company that it intends to participate to maintain its ownership percentage at approximately 69.6 percent. The program will end should the company purchase the maximum allowable number of shares or otherwise on June 28, 2027. Imperial plans to accelerate its share purchases under the normal course issuer bid program, and anticipates repurchasing all remaining allowable shares prior to year end. Purchase plans may be modified at any time without prior notice.

Six months 2026 vs. six months 2025

Price – Average bitumen realizations increased by $11.41 per barrel, primarily driven by higher marker prices, partially offset by a weaker WTI/WCS spread and higher diluent costs. Synthetic crude oil realizations increased by $25.72 per barrel, primarily driven by higher marker prices and an improved Synthetic/WTI spread.

Volume – Lower volumes were primarily driven by lower production at Kearl and Syncrude.

Royalty – Higher royalties were primarily driven by higher commodity prices.

Other – Primarily due to unfavourable foreign exchange impacts of about $100 million and higher operating costs of about $100 million, primarily related to Syncrude.

Margins – Higher margins primarily reflect improved market conditions.

Other – Primarily due to favourable product mix effects of about $230 million partially offset by turnaround impacts of about $190 million.

Lower refinery throughput and capacity utilization were primarily due to planned turnaround impacts.

Lower petroleum product sales were aligned with lower throughput related to planned turnaround work at the Strathcona refinery.

Imperial has updated its refinery throughput and refinery utilization guidance ranges for 2026 from 395,000 - 405,000 barrels per day and 91% - 93% utilization to 370,000 - 380,000 barrels per day and 85% - 88% utilization, to reflect unplanned downtime, and a short-term rail logistic challenge at Strathcona which is targeted to be resolved by year end.

Margins – Higher margins primarily reflect improved industry polyethylene margins.

Cash flows from operating activities primarily reflect higher earnings partially offset by unfavourable working capital impacts.

Cash flows used in investing activities primarily reflect additions to property, plant, and equipment partially offset by proceeds from the sale of surplus property in Montreal.

Cash flows used in financing activities primarily reflect:

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. Similarly, discussion of roadmaps or future plans related to carbon capture, transportation and storage, biofuel, hydrogen, and other future plans to reduce emissions and emission intensity of the company, its affiliates and third parties are dependent on future market factors, such as continued technological progress, policy support and timely rule-making and permitting, and represent forward-looking statements. Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, estimate, expect, future, continue, likely, may, should, will and similar references to future periods. Forward-looking statements in this report include, but are not limited to, references to purchases under the normal course issuer bid and plans to accelerate purchases to complete the program prior to year end; the company’s updated Downstream refinery throughput and capacity utilization guidance for 2026; company performance in the second half of the year; the target date to resolve short-term rail logistic challenges at Strathcona; the company’s anticipation that strong volumes in the second half of 2026 across its integrated business will support robust free cash flow; the company’s commitment to return surplus cash to shareholders; the potential for regulatory reforms and fiscal measures designed to enhance oil sands competitiveness and support production growth arising from the trilateral MOU signed between the Government of Canada, the Government of Alberta and the Oil Sands Alliance member companies; opportunities to increase production from operated Upstream assets, including opportunities involving new solvent technologies; and, the impact on the company of trade-related actions.

Forward-looking statements are based on the company's current expectations, estimates, projections and assumptions at the time the statements are made. Actual future financial and operating results, including expectations and assumptions concerning, future energy demand, supply and mix; production rates, growth and mix across various assets; project plans, timing, costs, technical evaluations and capacities and the company’s ability to effectively execute on these plans and operate its assets; the adoption and impact of new facilities or technologies on reductions to greenhouse gas emissions intensity, including but not limited to technologies using solvents to replace energy intensive steam at Cold Lake, Strathcona renewable diesel, carbon capture and storage including in connection with hydrogen for the renewable diesel project, recovery technologies and efficiency projects, and any changes in the scope, terms, or costs of such projects; for shareholder returns, assumptions such as cash flow forecasts, financing sources and capital structure, participation of the company’s majority shareholder in the normal course issuer bid, and the results of periodic and ongoing evaluation of alternate uses of capital; the amount and timing of emissions reductions, including the impact of lower carbon fuels; the degree and timeliness of support that will be provided by policymakers and other stakeholders for various new technologies such as carbon capture and storage; receipt of regulatory and third-party approvals in a timely manner, especially with respect to large scale emissions reduction projects; availability and performance of third-party service providers, including ExxonMobil global capability centres and other service providers located outside of Canada; Strathcona rail logistics challenges; maintenance and turnaround activity and cost; refinery utilization and product sales; applicable laws and government policies, including with respect to climate change, greenhouse gas emissions reductions and low carbon fuels; regulatory reforms and fiscal measures designed to enhance oil sands competitiveness and support production growth; the ability to offset any ongoing or renewed inflationary pressures; capital and environmental expenditures; cash generation, financing sources and capital structure, such as dividends and shareholder returns, including the timing and amounts of share repurchases; and commodity prices, foreign exchange rates and general market conditions, could differ materially depending on a number of factors.

These factors include global, regional or local changes in supply and demand for oil, natural gas, petroleum and petrochemical products, feedstocks and other market factors, economic conditions and seasonal fluctuations and resulting demand, price, differential and margin impacts, including Canadian and foreign government action with respect to supply levels, prices, trade tariffs, trade sanctions or trade controls, disruptions, realignment or breaking of trade alliances or agreements or a broader breakdown in global trade, and disruptions in military alliances or wars; political or regulatory events, including changes in law or government policy, applicable royalty rates, and tax laws; third-party opposition to company and service provider operations, projects and infrastructure; competition from alternative energy sources, other emission reduction technologies, and established competitors in such markets; availability and allocation of capital; the receipt, in a timely manner, of regulatory and third-party approvals, including for new technologies relating to the company’s lower emissions business activities; failure, delay, reduction, revocation or uncertainty regarding supportive policy and market development for the adoption of emerging lower emission energy technologies and other technologies that support emissions reductions; environmental regulation, including climate change and greenhouse gas regulation and changes to such regulation; unanticipated technical or operational disruptions or difficulties; project management and schedules and timely completion of projects; the results of research programs and new technologies, including with respect to greenhouse gas emissions, and the ability to bring new technologies to scale on a commercially competitive basis, and the competitiveness of alternative energy and other emission reduction technologies; availability and performance of third-party service providers, including ExxonMobil global capability centres and other service providers located outside of Canada; environmental risks inherent in oil and gas exploration and production activities; effectiveness of company risk management programs and emergency response preparedness; operational hazards and risks; cybersecurity incidents including incidents caused by actors employing emerging technologies such as artificial intelligence; currency exchange rates; general economic conditions, including continued or renewed inflation and the occurrence and duration of economic recessions or downturns; and other factors discussed in Item 1A risk factors and Item 7 management’s discussion and analysis of financial condition and results of operations of Imperial’s most recent annual report on Form 10-K.

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