Imperial Oil Reports Record Third-Quarter Earnings

Imperial Oil Limited reported net earnings for the third quarter of 2004 of $539 million or $1.52 a share. This compared with earnings of $375 million or $1.01 a share for the third quarter of 2003. Net earnings for the first nine months of 2004 were $1,502 million or $4.18 a share, versus $1,427 million or $3.81 a share for the first nine months of 2003. Both the third-quarter and nine-month earnings for 2004 are the highest in the company's history.

Earnings in the third quarter reflect higher realizations from crude oil production and stronger industry margins in petroleum refining and petrochemicals operations, partly offset by lower margins in petroleum products marketing. A higher Canadian dollar had a negative impact on earnings of about $55 million in the third quarter versus the third quarter of 2003. Over the first three quarters of 2004, the negative earnings impact of the higher Canadian dollar compared with last year was about $200 million.

Imperial's total revenues were $5,814 million in the third quarter and $16,347 million in the first nine months of 2004, compared with $4,626 million and $14,614 million in the corresponding periods of 2003. Capital and exploration expenditures were $354 million during the third quarter of 2004, and $1,004 million in the first nine months of 2004, versus $361 million and $1,105 million during the corresponding periods of last year. In the first nine months of 2004, Imperial repurchased more than nine million shares for $580 million. At September 30, 2004, the company's cash balance was $933 million, compared with $448 million at the end of 2003.

Imperial's chairman, president and chief executive officer Tim Hearn said that the company's record quarterly and nine-month earnings reflected a combination of higher crude oil prices and continuing strong operating performance, including higher natural gas production and improved refinery utilization. "Regardless of short-term commodity prices, our focus remains on continually improving base operations while advancing major projects aimed at profitable growth in future production. Both of these will contribute to increased value for Imperial's shareholders," Hearn said.

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