Imperial Oil Limited press release

Imperial announces second quarter 2026 financial and operating results

2026-07-31

TSX - Toronto Stock Exchange · Oil · Bitumen · Natural Gas · Petroleum Products · Hydrogen · Aluminium · Rare Earth Elements · Lithium · Canada · Corporate Finance

Quarterly net income of $2,190 million Cash flows from operating activities of $2,704 million and cash flows from operating activities excluding working capital 1 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

Imperial (TSE: IMO) (NYSE American: IMO):

| | | Second quarter | | Six months | | | | | | | | | | millions of Canadian dollars, unless noted | | 2026 | | 2025 | | ∆ | | 2026 | | 2025 | | ∆ | | Net income (loss) (U.S. GAAP) | | 2,190 | | 949 | | +1,241 | | 3,130 | | 2,237 | | +893 | | Net income (loss) per common share, assuming dilution (dollars) | | 4.52 | | 1.86 | | +2.66 | | 6.46 | | 4.38 | | +2.08 | | Capital and exploration expenditures | | 531 | | 473 | | +58 | | 1,009 | | 871 | | +138 |

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 capital 1 , 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 flow 1 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 capital 1 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

| | | Second Quarter | | | | millions of Canadian dollars, unless noted | | 2026 | | 2025 | | Net income (loss) (U.S. GAAP) | | 2,190 | | 949 | | Net income (loss) per common share, assuming dilution (dollars) | | 4.52 | | 1.86 |

| Upstream | | | | | | | | | | | | Net income (loss) factor analysis | | | | | | | | | | | | millions of Canadian dollars | | | | | | | | | | | | 2025 | | Price | | Volume | | Royalty | | Other | | 2026 | | 664 | | 1,010 | | (120) | | (220) | | (35) | | 1,299 |

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.

| Marker prices and average realizations | | | | | | | | Second Quarter | | | | Canadian dollars, unless noted | | 2026 | | 2025 | | West Texas Intermediate (US$ per barrel) | | 92.69 | | 63.69 | | Western Canada Select (US$ per barrel) | | 77.90 | | 53.66 | | WTI/WCS Spread (US$ per barrel) | | 14.79 | | 10.03 | | Bitumen (per barrel) | | 95.79 | | 65.82 | | Synthetic crude oil (per barrel) | | 141.10 | | 87.85 | | Average foreign exchange rate (US$) | | 0.72 | | 0.72 |

| Production | | | | | | | | Second Quarter | | | | thousands of barrels per day | | 2026 | | 2025 | | Kearl (Imperial's share) | | 182 | | 195 | | Cold Lake | | 149 | | 145 | | Syncrude (a) | | 73 | | 77 | | | | | | | | Kearl total gross production (thousands of barrels per day) | | 257 | | 275 |

| (a) | | In the second quarter of 2026, Syncrude gross production included about 0 thousand barrels per day of bitumen and other products (2025 - 4 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline. |

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.

| Downstream | | | | | Net income (loss) factor analysis | | | | | millions of Canadian dollars | | | | | 2025 | Margins | Other | 2026 | | 322 | 500 | (35) | 787 |

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.

| Refinery utilization and petroleum product sales | | | | | | | | Second Quarter | | | | thousands of barrels per day, unless noted | | 2026 | | 2025 | | Refinery throughput | | 331 | | 376 | | Refinery capacity utilization (percent) | | 76 | | 87 | | Petroleum product sales | | 446 | | 480 |

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.

| Chemicals | | | | | Net income (loss) factor analysis | | | | | millions of Canadian dollars | | | | | 2025 | Margins | Other | 2026 | | 21 | 80 | (36) | 65 |

Margins – Higher margins primarily reflect improved industry polyethylene margins.

| Corporate and other | | | | | | | | | Second Quarter | | | | | millions of Canadian dollars | | 2026 | | 2025 | | | Net income (loss) (U.S. GAAP) | | 39 | | (58 | ) |

Current quarter results reflect lower incentive compensation.

| Liquidity and capital resources | | | | | | | | | | Second Quarter | | | | | | millions of Canadian dollars | | 2026 | | | 2025 | | | Cash flows from (used in): | | | | | | | | Operating activities | | 2,704 | | | 1,465 | | | Investing activities | | (470 | ) | | (472 | ) | | Financing activities | | (424 | ) | | (371 | ) | | Increase (decrease) in cash and cash equivalents | | 1,810 | | | 622 | | | | | | | | | | | Cash and cash equivalents at period end | | 2,839 | | | 2,386 | |

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:

| | | Second Quarter | | | | millions of Canadian dollars, unless noted | | 2026 | | 2025 | | Dividends paid | | 421 | | 367 | | Per share dividend paid (dollars) | | 0.87 | | 0.72 | | Share repurchases (a) | | — | | — | | Number of shares purchased (millions) (a) | | — | | — |

| (a) | | The company did not purchase any shares in the second quarter of 2026 and 2025. |

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

| | | Six Months | | | | millions of Canadian dollars, unless noted | | 2026 | | 2025 | | Net income (loss) (U.S. GAAP) | | 3,130 | | 2,237 | | Net income (loss) per common share, assuming dilution (dollars) | | 6.46 | | 4.38 |

| Upstream | | | | | | | | | | | | Net income (loss) factor analysis | | | | | | | | | | | | millions of Canadian dollars | | | | | | | | | | | | 2025 | | Price | | Volume | | Royalty | | Other | | 2026 | | 1,395 | | 900 | | (170) | | (220) | | (136) | | 1,769 |

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.

| Marker prices and average realizations | | | | | | | | Six Months | | | | Canadian dollars, unless noted | | 2026 | | 2025 | | West Texas Intermediate (US$ per barrel) | | 82.77 | | 67.52 | | Western Canada Select (US$ per barrel) | | 68.19 | | 56.25 | | WTI/WCS Spread (US$ per barrel) | | 14.58 | | 11.27 | | Bitumen (per barrel) | | 81.91 | | 70.50 | | Synthetic crude oil (per barrel) | | 118.86 | | 93.14 | | Average foreign exchange rate (US$) | | 0.73 | | 0.71 |

| Production | | | | | | | | Six Months | | | | thousands of barrels per day | | 2026 | | 2025 | | Kearl (Imperial's share) | | 183 | | 189 | | Cold Lake | | 152 | | 150 | | Syncrude (a) | | 73 | | 75 | | | | | | | | Kearl total gross production (thousands of barrels per day) | | 258 | | 266 |

| (a) | | In 2026, Syncrude gross production included about 4 thousand barrels per day of bitumen and other products (2025 - 3 thousand barrels per day) that were exported to the operator's facilities using an existing interconnect pipeline. |

| Downstream | | | | | Net income (loss) factor analysis | | | | | millions of Canadian dollars | | | | | 2025 | Margins | Other | 2026 | | 906 | 460 | 32 | 1,398 |

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.

| Refinery utilization and petroleum product sales | | | | | | | | Six Months | | | | thousands of barrels per day, unless noted | | 2026 | | 2025 | | Refinery throughput | | 358 | | 387 | | Refinery capacity utilization (percent) | | 82 | | 89 | | Petroleum product sales | | 444 | | 468 |

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.

| Chemicals | | | | | Net income (loss) factor analysis | | | | | millions of Canadian dollars | | | | | 2025 | Margins | Other | 2026 | | 52 | 60 | (23) | 89 |

Margins – Higher margins primarily reflect improved industry polyethylene margins.

| Corporate and other | | | | | | | | | | Six Months | | | | | | millions of Canadian dollars | | 2026 | | | 2025 | | | Net income (loss) (U.S. GAAP) | | (126 | ) | | (116 | ) |

| Liquidity and capital resources | | | | | | | | | | Six Months | | | | | | millions of Canadian dollars | | 2026 | | | 2025 | | | Cash flows from (used in): | | | | | | | | Operating activities | | 3,460 | | | 2,992 | | | Investing activities | | (920 | ) | | (849 | ) | | Financing activities | | (843 | ) | | (736 | ) | | Increase (decrease) in cash and cash equivalents | | 1,697 | | | 1,407 | |

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:

| | | Six Months | | | | millions of Canadian dollars, unless noted | | 2026 | | 2025 | | Dividends paid | | 771 | | 674 | | Per share dividend paid (dollars) | | 1.59 | | 1.32 | | Share repurchases (a) | | — | | — | | Number of shares purchased (millions) (a) | | — | | — |

| (a) | | The company did not purchase any shares during the six months ended June 30, 2026 and 2025. |

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.