Imperial Oil Limited

Ladies and gentlemen, thank you for standing by and welcome to the Imperial Q1 2022 earnings call. At this time, all participants are on listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to turn the call over to your host, Dave Hughes, Vice President of Investor Relations. You may begin.

Thank you. Good morning, everybody. Thanks for joining us today on our first quarter earnings call. I'll start by introducing the management team who's here with me. Brad Corson, chairman, president, and CEO. Dan Lyons, senior vice president, finance and administration. Simon Younger, senior vice president of the upstream. Sherry Evers, vice president of commercial and corporate development. And John Wetmore, vice president of the downstream. So first of all, I'll read the cautionary statement. Today's comments include reference to non-GAAP financial measures. The definitions and reconciliations of these measures can be found in attachment six of our most recent press release and are available on our website with the link to this conference call. Today's comments may also contain forward-looking information. Any forward-looking information is not a guarantee of future performance. An actual future financial performance and operating results can differ materially depending on a number of factors and assumptions. Forward-looking information and the risk factors and assumptions are described in further detail in our first quarter earnings press release that we issued this morning, as well as our most recent form, 10-K. And all of these documents are available on CDAR, EDGAR, and on our website, so please refer to those. We'll follow our typical format. Brad will start with some opening remarks, and then Dan will provide a financial update, then back to Brad for an operating update, and then we'll follow it up with a Q&A session. So with that, I'll turn it over to Brad.

Okay, thank you, Dave, and good morning, everybody, and welcome to our first quarter earnings call. I hope you are all doing well. Back in February when I spoke to you about our fourth quarter results, we talked about how we wrapped up the year strong with another quarter of solid operating performance and strong financial results. Our focus on ensuring our company was in the best position possible to take advantage of the market recovery was certainly paying off. And I'm pleased to say the positive momentum has continued into 2022. While it was a quarter that started with some pretty challenging weather conditions, which had an impact on production, particularly at Curl, our other upstream assets such as Cold Lake and our downstream and chemicals operations performed quite well. As a result of this performance, when paired with a high-price environment, we were able to deliver very strong financial results in the quarter. And now with the challenges that curl behind us and with the Sarnia turnaround wrapping up in April, which is the extent of our downstream turnaround activity for the year, we are well positioned to deliver more value in the coming quarters. Over the next few minutes, Dan and I will detail the results of what was a very strong quarter. So now let's review the first quarter results. To start, Earnings for the quarter were almost $1.2 billion, which represents our highest first quarter net income in over 30 years. And our cash from operating activities was just over $1.9 billion, also the highest first quarter in over 30 years. These results reflect our strong operating performance and the strong commodity fundamentals in the quarter. Crude prices continued to strengthen through the quarter, while both downstream and chemical margins remain strong. Total upstream production of 380,000 barrels per day reflects the impacts at Curl of the severe cold weather that started in the late fourth quarter of last year and continued into the first quarter of this year, as well as some unplanned downtime at Curl that I will discuss later. Our downstream continued to perform at a very high level. with first quarter utilization of 93%. Demands remain quite strong as many of the remaining pandemic restrictions were lifted late in the quarter. During the quarter, construction of the Sarnia products pipeline was completed ahead of schedule with startup and commissioning completed in April. This is a key project for us as it helps ensure reliable access into the Toronto market, which is our largest market and also drives a reduction in transportation costs of around $40 million per year. Our overall strong performance once again supported our ability to deliver on our priority of returning cash to shareholders. As you are aware, we completed our existing normal course issuer bid at the end of January and declared the largest dividend increase in our history on February 1, Completion of the NCIB amounted to $449 million returned to our shareholders in the quarter on top of dividends paid of $185 million. This morning, we declared a dividend of $0.34 per share payable July 1st and also announced our intention to initiate a substantial issuer bid to return an additional $2.5 billion to our shareholders. I'll now turn it over to Dan to go through our financial performance for the quarter in more detail.