Imperial Oil Ltd (IMO) Q3 2025 Earnings Call Highlights: Record Production and Strategic ...

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Cash Flow from Operations: Nearly $1.8 billion. Cash on Hand: Approximately $1.9 billion. Shareholder Returns: Over $1.8 billion through dividends and buybacks. Net Income: $539 million; excluding identified items, $194 million. Restructuring Charge: $330 million before tax, $249 million after tax. Impairment Charge: $406 million before tax, $306 million after tax. Upstream Earnings: $728 million, up $64 million from the second quarter. Downstream Earnings: $444 million, up $122 million from the second quarter. Chemical Earnings: $21 million, consistent with the second quarter. Capital Expenditures: $505 million in the third quarter. Upstream Production: 462,000 oil equivalent barrels per day. Curl Production: 316,000 barrels per day, a quarterly record. Cold Lake Production: 150,000 barrels per day. Syncrude Production: 78,000 barrels per day. Refinery Throughput: 425,000 barrels per day, 98% utilization. Petroleum Product Sales: 464,000 barrels per day. Dividend: $0.72 per share for the fourth quarter.

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Release Date: October 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Imperial Oil Ltd (IMO) reported strong cash flow from operations of nearly $1.8 billion, ending the quarter with approximately $1.9 billion of cash on hand. The company achieved record crude production and high refinery utilization, contributing to its strong financial performance. Imperial Oil Ltd (IMO) announced a restructuring effort aimed at increasing cash flow and delivering industry-leading shareholder returns. The Curl asset set a quarterly production record, averaging 316,000 barrels per day, marking the highest quarterly production in the asset's history. Downstream utilization was significantly higher at 98%, even with planned turnaround activity, indicating strong operational efficiency.

Negative Points

Imperial Oil Ltd (IMO) recorded a one-time restructuring charge of $330 million before tax, impacting earnings negatively by $249 million after tax. The sale of the Calgary campus resulted in a non-cash impairment charge of $406 million before tax, with an unfavorable earnings impact of $306 million after tax. Net income for the quarter was $539 million, but excluding identified items, it was down $143 million from the third quarter of 2024 due to lower upstream realizations. The restructuring will result in a reduction in the number of employee roles by the end of 2027, indicating potential workforce challenges. Petroleum product sales in the quarter were down 16,000 barrels per day compared to the second quarter of 2025, driven by lower export volumes.

Story Continues

Q & A Highlights

Q: Curl's production volume was significantly better than expected, with a $15 operating cost. What is driving these improvements, and how does this position Imperial for the future? A: John Whelan, CEO, highlighted that Curl's performance is key to Imperial's success. The team set new records with high ore quality and optimization efforts. Cheryl Gomez-Smith, SVP of Upstream, added that Curl focuses on optimizing scope, integrating lessons learned, and leveraging technology for continuous improvement. The goal is to achieve 300,000 barrels per day with a unit cost target of $18 per barrel by 2027.

Q: How do you see the refining market, particularly diesel margins, over the next 3 to 6 months? A: An unidentified company representative noted that global supply-demand balances and sanctions are supporting diesel margins. With maintenance work completed, Imperial expects high utilization and positive margins, especially in the diesel channel, for a strong fourth quarter.

Q: Can you explain the restructuring transition, including the sale-leaseback of the Calgary campus and workforce changes? A: John Whelan explained that the restructuring builds on a decade-long transformation journey. The transition will occur over two years, with workforce reductions and outsourcing to global capability centers. The Calgary campus sale includes a leaseback until 2028, after which staff will consolidate at operating sites.

Q: Regarding Curl's unit cash costs, can you break down the improvements between volume, input costs, and structural cost reductions? A: John Whelan stated that improvements are due to both structural cost reductions and increased production volumes. Cheryl Gomez-Smith added that leveraging scale, structural savings, and incremental production are key, with a focus on reliability and digital solutions to lower costs.

Q: What is the production capacity trajectory for Curl, and is there potential beyond 300,000 barrels per day? A: John Whelan expressed confidence in reaching 300,000 barrels per day, supported by bitumen recovery projects and equipment performance improvements. While 300,000 barrels is the current focus, there is potential for further growth, and plans are being developed.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

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