Reserves and Production - As of December 31, 2022, Imperial Oil reported total net proved reserves of 2,193 million barrels of oil equivalent, with 1,824 million barrels classified as developed and 240 million barrels as undeveloped [26][34]. - The company's average daily oil production in 2022 was 402 thousand barrels gross, a slight decrease from 408 thousand barrels in 2021 [39][47]. - Average daily natural gas production in 2022 was 85 million cubic feet gross, down from 120 million cubic feet in 2021 [43]. - Approximately 11% of the company's proved reserves were classified as proved undeveloped, reflecting a decrease of 146 million oil-equivalent barrels from the previous year [34]. - The company invested about CAD 167 million in 2022 to develop proved undeveloped reserves, representing approximately 15% of total upstream capital expenditures of CAD 1,128 million [36]. - Total average daily production on an oil-equivalent basis was 349 thousand barrels net in 2022, down from 383 thousand barrels in 2021 [47]. - The company's share of Kearl's net bitumen production was approximately 157,000 barrels per day in 2022, with total gross production at about 242,000 barrels per day, down 21,000 barrels per day compared to 2021 [73]. - Cold Lake's net bitumen production was about 106,000 barrels per day in 2022, with gross production increasing by 4,000 barrels per day compared to 2021 due to improved reliability and production optimizations [76]. Financial Performance - The average unit sales price for bitumen in 2022 was CAD 84.67 per barrel, significantly up from CAD 57.91 in 2021 [50]. - Average unit production costs for bitumen increased to CAD 39.05 per barrel in 2022, compared to CAD 29.06 in 2021, primarily due to higher energy costs [53][54]. - The average unit sales price for synthetic crude oil rose to CAD 125.46 per barrel in 2022, up from CAD 81.61 in 2021 [50]. - The company's total refinery throughput in 2022 was 418,000 barrels per day, an increase from 379,000 barrels per day in 2021, reflecting a utilization rate of 98% [99][101]. - In 2022, net petroleum product sales reached 475,000 barrels per day, up from 456,000 barrels per day in 2021, driven by increased demand [108]. - Total petrochemical sales volumes in 2022 were 842,000 tonnes, an increase from 831,000 tonnes in 2021, primarily due to higher sales of propylene and polyethylene [111]. Environmental and Regulatory Compliance - The company's environmental capital and operating expenditures totaled approximately $1.4 billion in 2022, with expectations to increase to about $1.8 billion in 2023 [123]. - The company aims to achieve net-zero emissions from its operated assets, but the transition to lower-emission sources carries risks related to technology and market development [159]. - Compliance with environmental legislation may require significant expenditures, and failure to comply could result in operational cessation and financial penalties [155]. - The Government of Canada aims to reduce greenhouse gas emissions economy-wide by 40 to 45 percent below 2005 levels by 2030, with a carbon pricing plan starting at $50 per tonne CO2 equivalent emissions in 2022, increasing to $170 per tonne by 2030 [160]. - Alberta's Technology Innovation and Emissions Reduction Regulation (TIER) applies to facilities with CO2 emissions over 100,000 tonnes per year, with a pricing increase from 10% of emissions in 2020 to 12% in 2022, and anticipated increases of 2% per year starting in 2023 [161]. - British Columbia's Low Carbon Fuel Standard requires a 30% carbon intensity reduction by 2030 compared to the 2010 baseline, with compliance achievable through blending renewable fuels or purchasing credits [163]. Operational Risks and Challenges - The company's operations and earnings are significantly affected by commodity price volatility, particularly crude oil and natural gas prices, which can impact both Upstream and Downstream operations [137]. - Economic downturns or recessions directly adversely impact the company's results, with various factors such as trade tariffs and public health issues posing additional risks [138]. - Demand for the company's products may be influenced by technological improvements in energy efficiency and changes in consumer preferences towards alternative energy sources [139]. - Increased supply from new oil and gas sources can lead to reduced commodity prices if not matched by demand growth, impacting the company's margins [141]. - The market price for western Canadian heavy crude oil is typically lower than lighter grades, which can adversely affect the company's business due to higher transportation and refining costs [142]. - The company faces risks from potential increases in carbon pricing, which could adversely impact operations and financial results unless mitigated through technological innovation [161]. - The company is exposed to commodity price volatility and inflationary pressures due to potential restrictions on hydrocarbon products without a corresponding reduction in demand [167]. - The company relies on third-party service providers for transportation and utilities, and disruptions could negatively impact production capacity and financial performance [170]. - The company’s operations are subject to significant hazards, including environmental risks, and effective management systems are crucial to minimize these risks [178]. - Cybersecurity threats pose risks to the company’s operations, and the effectiveness of its defensive measures is critical to protect proprietary data and maintain business continuity [179]. Shareholder Information and Capital Management - The company completed a substantial issuer bid, purchasing 20,689,655 common shares at a price of $72.50 per share, totaling $1.5 billion, representing 3.4% of its issued and outstanding shares as of October 31, 2022 [199]. - The company has a maximum of 31,833,809 common shares authorized for purchase under its normal course issuer bid program, which runs from June 29, 2022, to June 28, 2023 [198]. - As of February 8, 2023, there were 9,342 holders of record of the company's common shares [192]. - The company is subject to a Canadian non-resident withholding tax of 15% on cash dividends paid to shareholders in countries with which Canada has an income tax convention [193]. - The company will evaluate the renewal of its normal course issuer bid share purchase program in June 2023 [200]. Exploration and Development - The company has a disciplined investment strategy, with significant funding commitments required to report resources as proved reserves [36]. - In 2022, the company drilled a total of 24 productive development wells, an increase from 13 in 2021 and a decrease from 29 in 2020 [59]. - The Grand Rapids Phase 1 project was approved in April 2022, with a forecasted average production of 15,000 barrels per day before royalties, and development activities are planned to be completed by year-end 2023 [66]. - The company holds a 25 percent interest in two exploration licenses in the Beaufort Sea, with existing licenses not impacted by the Federal Government's prohibition on new offshore oil and gas licenses [70]. - The company has approximately 161,000 net acres of oil sands leases near Cold Lake and about 34,000 net acres at Kearl, with additional interests in other bitumen oil sands leases totaling about 173,000 net acres [88].

Financial Data and Key Metrics Changes - The company reported fourth-quarter earnings of over $1.7 billion, with cash from operating activities reaching almost $2.8 billion, reflecting strong operational performance and favorable commodity fundamentals [19][20]. - Full-year 2022 earnings totaled over $7.3 billion, marking an increase of approximately $4.9 billion from 2021, driven by higher realizations in the upstream and higher margins in the downstream [26][20]. - Cash flow from operating activities for the full year was around $10.5 billion, up over $5 million from the previous year [29]. Business Line Data and Key Metrics Changes - Upstream production averaged 441,000 barrels of oil equivalent per day in the fourth quarter, reflecting strong performance despite a decrease compared to the fourth quarter of 2021 due to the absence of XTO volumes [34]. - The upstream reported net income of $531 million in the fourth quarter, down from the previous quarter primarily due to lower realizations [28]. - The downstream achieved net income of $1,188 million in the fourth quarter, up from the previous quarter, driven by higher volumes and record refinery utilization rates [28]. Market Data and Key Metrics Changes - The refining sector saw an average throughput of 433,000 barrels per day in the fourth quarter, up 7,000 barrels per day from the third quarter and 17,000 barrels per day from the fourth quarter of 2021 [53]. - Diesel margins remained extremely strong, driven by low product inventories and a global shortfall for diesel fuel [62]. - The company noted that motor gasoline demand was around 95% of 2019 levels, while jet fuel demand exceeded 2019 levels at around 115% [61]. Company Strategy and Development Direction - The company plans to maintain its core strategy of optimizing existing assets to drive maximum shareholder value, with a focus on returning cash to shareholders [25]. - Significant investments are being made in sustainability initiatives, including the development of Canada's largest renewable diesel manufacturing facility at Strathcona, expected to start production in early 2025 [57][60]. - The company has established a corporate-wide net zero goal by 2050, aiming to achieve this through collaboration with government and industry partners [64]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2023, citing the strong performance in 2022 and the expectation of continued safe and reliable operations [72]. - The macro environment remained positive, with strong commodity prices despite some softening in the fourth quarter [17]. - The company highlighted its ability to manage through extreme weather conditions effectively, contributing to high reliability and operational performance [110]. Other Important Information - The company returned over $2.1 billion to shareholders in the fourth quarter through dividends and share repurchases, contributing to total shareholder returns exceeding $7 billion for the year [68]. - Capital expenditures totaled $488 million in the fourth quarter and just under $1.5 billion for the full year, with significant investments in projects like the Sarnia products pipeline and renewable diesel [31]. Q&A Session Summary Question: Can you elaborate on the weather-proofing initiatives at Kearl? - Management detailed a combination of initiatives including equipment upgrades and enhanced monitoring to prepare for extreme weather conditions [75]. Question: What is the appetite for another substantial issuer bid (SIB)? - Management indicated that the decision on another SIB would depend on market conditions and the availability of surplus cash [77][82]. Question: How do you see the outlook for your refining business? - Management emphasized the importance of maximizing product value driven by operating conditions and commodity pricing, particularly strong diesel crack spreads [86][87]. Question: What is the balance between buybacks and dividend growth? - Management stated that the foundation of their capital allocation strategy is a reliable and growing dividend, with buybacks serving as a supplement based on market conditions [91][92]. Question: What projects are in the pipeline to drive upstream production? - Management highlighted ongoing projects at Kearl and Cold Lake, including the Grand Rapids project and infill drilling, aimed at increasing production and reducing costs [99][105].

PART I. FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) The company reported significant growth in net income and cash flow from operations for Q3 and the first nine months of 2022, alongside increased assets and reduced long-term debt [Consolidated Statement of Income](index=4&type=section&id=Consolidated%20statement%20of%20income) Net income for Q3 2022 increased by 123.7% to $2,031 million, and for the first nine months, it surged to $5,613 million, driven by strong revenue growth and commodity prices Consolidated Income Statement Highlights (CAD millions) | Metric | Q3 2022 (CAD millions) | Q3 2021 (CAD millions) | 9 Months 2022 (CAD millions) | 9 Months 2021 (CAD millions) | | :--- | :--- | :--- | :--- | :--- | | **Revenues** | 15,071 | 10,214 | 45,013 | 25,213 | | **Total revenues and other income** | 15,224 | 10,233 | 45,217 | 25,278 | | **Income before income taxes** | 2,505 | 1,189 | 7,205 | 2,172 | | **Net income (loss)** | 2,031 | 908 | 5,613 | 1,666 | | **Diluted EPS (CAD)** | 3.24 | 1.29 | 8.58 | 2.31 | [Consolidated Balance Sheet](index=6&type=section&id=Consolidated%20balance%20sheet) Total assets increased to $42,986 million as of September 30, 2022, driven by higher cash, while total liabilities rose, and long-term debt decreased Consolidated Balance Sheet Highlights (CAD millions) | Metric | Sept 30, 2022 (CAD millions) | Dec 31, 2021 (CAD millions) | | :--- | :--- | :--- | | **Total current assets** | 11,005 | 7,813 | | **Property, plant and equipment, net** | 30,013 | 31,240 | | **Total assets** | 42,986 | 40,782 | | **Total current liabilities** | 8,934 | 5,554 | | **Long-term debt** | 4,038 | 5,054 | | **Total liabilities** | 20,678 | 19,047 | | **Total shareholders' equity** | 22,308 | 21,735 | [Consolidated Statement of Cash Flows](index=9&type=section&id=Consolidated%20statement%20of%20cash%20flows) Cash flow from operating activities more than doubled to $7,685 million for the first nine months of 2022, primarily funding significant share repurchases and long-term debt reduction Cash Flow Summary (CAD millions) | Activity | 9 Months 2022 (CAD millions) | 9 Months 2021 (CAD millions) | | :--- | :--- | :--- | | **Operating activities** | 7,685 | 3,844 | | **Investing activities** | (145) | (613) | | **Financing activities** | (6,117) | (2,127) | | **Increase in cash** | 1,423 | 1,104 | | **Cash at end of period** | 3,576 | 1,875 | - Key financing activities in the first nine months of 2022 included **$4,461 million** in common share purchases and a **$1,000 million** long-term debt reduction[16](index=16&type=chunk) [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20consolidated%20financial%20statements) Notes detail segment performance, including a near quadrupling of Upstream net income, the $0.9 billion sale of XTO Energy Canada interests, and significant shareholder capital returns Segment Net Income (CAD millions) | Segment | Q3 2022 (CAD millions) | Q3 2021 (CAD millions) | 9 Months 2022 (CAD millions) | 9 Months 2021 (CAD millions) | | :--- | :--- | :--- | :--- | :--- | | **Upstream** | 986 | 524 | 3,114 | 850 | | **Downstream** | 1,012 | 293 | 2,434 | 645 | | **Chemical** | 54 | 121 | 163 | 297 | - In Q2 2022, the company signed an agreement to sell its interests in XTO Energy Canada for approximately **$1.9 billion** (**$0.9 billion** Imperial's share), closing on August 31, 2022, and resulting in a gain of about **$0.2 billion**[53](index=53&type=chunk) - The company completed a **$2.5 billion** substantial issuer bid on June 15, 2022, repurchasing **32.5 million shares**, and announced its intention for another substantial issuer bid of up to **$1.5 billion** after the quarter end[45](index=45&type=chunk)[47](index=47&type=chunk) - During Q3 2022, the company repaid **$1 billion** of long-term debt owed to an affiliate of ExxonMobil, reducing total long-term debt to **$4,038 million**[32](index=32&type=chunk) [Management's Discussion and Analysis (MD&A)](index=24&type=section&id=Item%202.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management attributes strong Q3 and nine-month 2022 results to favorable commodity prices and refining margins, driving earnings growth across segments and enabling significant shareholder returns and debt reduction [Current Business Environment](index=25&type=section&id=Current%20business%20environment) The 2022 business environment saw supply tightness and high commodity prices due to demand recovery and geopolitical events, though Q3 experienced some softening in prices and margins due to tempered demand - Industry underinvestment during the pandemic led to supply tightness as demand recovered in late 2021 and early 2022[59](index=59&type=chunk) - Russia's invasion of Ukraine and subsequent sanctions further tightened oil and gas markets, pushing prices to multi-year highs in the first half of 2022[59](index=59&type=chunk) - In Q3 2022, high prices and economic uncertainty led to tempered demand, causing crude oil prices and refining margins to soften from first-half levels[59](index=59&type=chunk) [Operating Results (Q3 2022 vs Q3 2021)](index=25&type=section&id=Operating%20results%20Q3%202022%20vs%20Q3%202021) Q3 2022 net income reached $2,031 million, boosted by higher Upstream commodity prices and 100% Downstream refinery utilization, despite lower Chemical earnings Q3 Upstream Marker Prices (CAD per barrel) | Marker | Q3 2022 (CAD) | Q3 2021 (CAD) | | :--- | :--- | :--- | | Bitumen (per barrel) | 81.58 | 60.44 | | Synthetic crude oil (per barrel) | 124.80 | 85.94 | Q3 Production (thousand barrels per day) | Asset | Q3 2022 (kb/d) | Q3 2021 (kb/d) | | :--- | :--- | :--- | | Kearl (Imperial's share) | 193 | 194 | | Cold Lake | 150 | 135 | | Syncrude | 62 | 78 | Q3 Downstream Performance | Metric | Q3 2022 | Q3 2021 | | :--- | :--- | :--- | | Refinery throughput (kb/d) | 426 | 404 | | Refinery capacity utilization | 100% | 94% | - Chemicals segment net income fell due to lower margins, primarily reflecting weaker industry polyethylene margins[71](index=71&type=chunk) [Operating Results (Nine Months 2022 vs Nine Months 2021)](index=28&type=section&id=Operating%20results%20Nine%20months%202022%20vs%20Nine%20months%202021) Nine-month 2022 net income significantly increased to $5,613 million, driven by higher Upstream price realizations and improved Downstream margins and refinery utilization Nine-Month Upstream Marker Prices (CAD per barrel) | Marker | 9M 2022 (CAD) | 9M 2021 (CAD) | | :--- | :--- | :--- | | Bitumen (per barrel) | 94.01 | 55.30 | | Synthetic crude oil (per barrel) | 129.52 | 77.62 | Nine-Month Production (thousand barrels per day) | Asset | 9M 2022 (kb/d) | 9M 2021 (kb/d) | | :--- | :--- | :--- | | Kearl (Imperial's share) | 162 | 185 | | Cold Lake | 145 | 139 | | Syncrude | 74 | 68 | Nine-Month Downstream Performance | Metric | 9M 2022 | 9M 2021 | | :--- | :--- | :--- | | Refinery throughput (kb/d) | 413 | 367 | | Refinery capacity utilization | 96% | 86% | | Petroleum product sales (kb/d) | 471 | 442 | [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20capital%20resources) Strong liquidity was demonstrated by doubled cash flow from operations to $7,685 million, primarily used for significant shareholder returns and a $1 billion long-term debt reduction Nine-Month Financing Activities (CAD millions) | Activity | 9M 2022 (CAD millions) | 9M 2021 (CAD millions) | | :--- | :--- | :--- | | Dividends paid | 640 | 518 | | Share repurchases | 4,461 | 1,484 | | Number of shares purchased (millions) | 66.6 | 38.5 | - Cash flow from operating activities for the first nine months of 2022 was **$7,685 million**, up from **$3,844 million** in the same period of 2021, reflecting higher realizations and margins[91](index=91&type=chunk) - In Q3 2022, the company reduced its long-term debt by **$1 billion** by repaying a facility with an ExxonMobil affiliate[76](index=76&type=chunk)[93](index=93&type=chunk) - The company completed a **$2.5 billion** substantial issuer bid in June 2022 and announced its intention to launch another **$1.5 billion** substantial issuer bid after the quarter[94](index=94&type=chunk)[96](index=96&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=29&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) No material changes to market risk disclosures were reported for the nine months ended September 30, 2022, compared to prior filings - Information about market risks for the nine months ended September 30, 2022, does not differ materially from previous disclosures[105](index=105&type=chunk) [Controls and Procedures](index=29&type=section&id=Item%204.%20Controls%20and%20procedures) Disclosure controls and procedures were deemed effective as of September 30, 2022, with no material changes to internal control over financial reporting during the quarter - The company's principal officers evaluated disclosure controls and procedures as of September 30, 2022, and concluded they are effective[106](index=106&type=chunk) - No changes in internal control over financial reporting occurred during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[106](index=106&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=30&type=section&id=Item%201.%20Legal%20proceedings) The company established a $1 million disclosure threshold for environmental legal proceedings - Imperial has elected to use a **$1 million** threshold for disclosing environmental proceedings[108](index=108&type=chunk) [Issuer Purchases of Equity Securities](index=30&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) In Q3 2022, the company repurchased 25.2 million shares for $1.5 billion, completed its NCIB, and announced a new $1.5 billion substantial issuer bid Q3 2022 Share Purchases | Month | Total Shares Purchased | Average Price Paid (CAD) | | :--- | :--- | :--- | | July 2022 | 5,082,675 | $56.85 | | August 2022 | 10,068,144 | $60.53 | | September 2022 | 10,009,792 | $61.22 | - The normal course issuer bid program, which allowed for the purchase of up to **31,833,809 shares**, was completed on October 21, 2022, after the quarter end[109](index=109&type=chunk) - On October 28, 2022, the company announced its intention to launch a substantial issuer bid to purchase up to **$1.5 billion** of its common shares[109](index=109&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists filed exhibits, including certifications from principal officers and Interactive Data Files (Inline XBRL) - Filed exhibits include certifications from the principal executive officer and principal financial officer as required by SEC rules[113](index=113&type=chunk) - Interactive Data Files (Inline XBRL) were also submitted as part of the filing[113](index=113&type=chunk)

Financial Data and Key Metrics Changes - The company reported earnings of just over $2 billion for the quarter, with cash from operating activities reaching almost $3.1 billion, reflecting strong operating performance and favorable commodity fundamentals [11][19] - Net income increased to $2.031 billion, up $1.123 billion from 2021, primarily driven by higher margins in the Downstream and improved realizations in the Upstream [19][20] - Free cash flow for the quarter was $3.453 billion, bringing year-to-date free cash flow to about $7.5 billion, significantly higher than the previous year [24] Business Line Data and Key Metrics Changes - Upstream production averaged 430,000 barrels per day, down 5,000 barrels from Q3 2021 but up 17,000 barrels from Q2 2022, reflecting strong performance at Kearl and Cold Lake [33] - The Downstream reported net income of $1.012 billion, relatively flat compared to the second quarter, benefiting from high utilization rates [21] - Chemicals business delivered net income of $54 million, flat with the second quarter but down from the previous year, indicating mid-cycle performance [22][53] Market Data and Key Metrics Changes - Refinery utilization was at 100%, the highest in over 40 years, reflecting strong operational performance and minimal planned turnaround activity [13][48] - Petroleum product sales averaged 484,000 barrels per day, up 4,000 barrels from Q2 but down 1,000 barrels from Q3 2021, with strong demand for gasoline and diesel [51] Company Strategy and Development Direction - The company aims to maximize shareholder returns, having returned $5.1 billion to shareholders in 2022, including a record dividend increase of over 29% [16][17] - Plans to initiate a substantial issuer bid to return an additional $1.5 billion to shareholders in Q4 2022, demonstrating commitment to shareholder value [31][61] - The company is advancing its renewable diesel project and has signed a hydrogen supply agreement, positioning itself for future market opportunities [50][106] Management's Comments on Operating Environment and Future Outlook - Management noted a positive macro environment with high commodity prices driven by supply challenges and geopolitical events [8] - The company expects continued strong performance into Q4, with all major planned maintenance activities completed [10] - Management anticipates cash tax payments of around $2.5 billion in Q1 2023, reflecting strong market conditions [27][85] Other Important Information - The company successfully closed the sale of its interest in XTO Energy Canada, using proceeds to reduce debt by $1 billion, enhancing financial resilience [14][25] - The company is committed to sustainability, with ongoing projects related to carbon capture and renewable energy [55][62] Q&A Session Summary Question: Shareholder returns and appetite for further SIB - Management emphasized a strong commitment to shareholder returns through dividends and share buybacks, with plans for a second substantial issuer bid in 2022 [70][72] Question: Refinery utilization and capacity - Management confirmed that high utilization rates are expected to continue into Q4, with a return to typical maintenance levels anticipated for 2023 [78] Question: Cash returns and capital expenditures - Management indicated that capital expenditures are expected to average about $1.5 billion over the next few years, with a focus on maintaining cost discipline [84][110] Question: Renewable diesel project and Air Products agreement - The agreement with Air Products is a key enabler for the renewable diesel project, with final investment decision anticipated soon [104][106] Question: WCS differential impact on profitability - Management discussed the widening of the WCS differential and its implications for profitability, noting that integrated operations help mitigate impacts [114][116] Question: Kearl production sustainability - Management confirmed record production levels at Kearl, with optimism about achieving future production targets while managing operating costs [120][121]

For the quarterly period ended June 30, 2022 OR Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-12014 IMPERIAL OIL LIMITED (Exact name of registrant as specified in its charter) CANADA 98-0017682 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 505 Quarry Park ...

Financial Data and Key Metrics Changes - The company reported earnings of just over $2.4 billion for the quarter, with cash from operating activities reaching almost $2.7 billion, reflecting strong commodity fundamentals and operational performance [6][10] - Net income increased by over $2 billion compared to Q2 2021, primarily due to improved prices in the Upstream and higher margins in the Downstream [10] - Cash flow from operating activities for the year-to-date reached almost $4.6 billion, up about $2.7 billion from the previous year [11] Business Line Data and Key Metrics Changes - Upstream production averaged 413,000 barrels per day, the highest second quarter production in over 30 years, with a recovery from cold weather impacts in Q1 [6][16] - The Downstream segment achieved a utilization rate of 96%, marking the fourth consecutive quarter above 90%, with refined product sales increasing to 480,000 barrels per day [7][22] - The Chemicals business reported net income of $53 million, flat compared to Q1 but down from $109 million in Q2 2021 [24] Market Data and Key Metrics Changes - Demand for motor gasoline and diesel has leveled off close to pre-pandemic levels, while jet demand has strengthened, averaging around 90% of historical levels [7][23] - The company noted a positive Downstream margin environment due to low product inventories and global export constraints, although some signs of margin softening were observed [23] Company Strategy and Development Direction - The company is focused on optimizing existing core assets and maximizing shareholder value, as evidenced by the sale of XTO assets for $1.9 billion [8][26] - Future projects include the Strathcona renewable diesel project and the Grand Rapids Phase 1 development, both aimed at enhancing production and reducing greenhouse gas intensity [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong operational performance and cash flow generation, anticipating a robust second half of 2022 [5][26] - The company is committed to returning surplus cash to shareholders, having returned over $2.7 billion in Q2 alone [14] Other Important Information - The company completed a substantial issuer bid, returning $2.5 billion in cash to shareholders, and announced a quarterly dividend of $0.34 per share [7][14] - Capital expenditures for Q2 totaled $314 million, in line with full-year guidance of $1.4 billion, with a focus on Upstream projects [13][51] Q&A Session Summary Question: Kearl and Digital Technology - Management confirmed the successful application of digital technology at Kearl, allowing for extended turnaround intervals and improved operational performance [30][32] Question: Cold Lake Optimization and Grand Rapids Development - The company is optimistic about Cold Lake's performance and is currently in construction mode for the Grand Rapids project, targeting a startup in 2024 [34] Question: Kearl Operational Reliability and Cost Management - Management expressed confidence in achieving lower operating costs at Kearl, aiming for $20 per barrel, despite facing some inflationary pressures [39] Question: Capital Returns and NCIB Acceleration - The acceleration of the NCIB was driven by strong cash balances and a commitment to return cash to shareholders, with further actions expected as market conditions evolve [42] Question: Downstream Profitability and Demand Elasticity - Management noted strong demand recovery in jet and diesel, while motor gasoline demand has softened slightly, allowing for product slate adjustments [46] Question: Emission Reduction Goals - Management acknowledged the federal government's proposed cap and trade system, expressing concerns about its feasibility while reaffirming their commitment to reducing greenhouse gas emissions [48][50] Question: Capital Expenditure Guidance - The company remains firm on its $1.4 billion capital expenditure guidance for the year, citing effective capital discipline and prior commitments shielding against inflation [52]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-12014 IMPERIAL OIL LIMITED (Exact name of registrant as specified in its charter) CANADA 98-0017682 (State or other jurisdi ...

Imperial Oil Limited (NYSE:IMO) Q1 2022 Earnings Conference Call April 29, 2022 11:00 AM ET Company Participants Dave Hughes - Vice President of Investor Relations Brad Corson - Chairman, President & Chief Executive Officer Dan Lyons - Senior Vice President, Finance & Administration Conference Call Participants Manav Gupta - Credit Suisse Neil Mehta - Goldman Sachs Greg Pardy - RBC Capital David Fernandez - Bank of America Travis Wood - National Bank Financial Operator Ladies and gentlemen, thank you for st ...

Reserves and Production - As of December 31, 2021, Imperial Oil reported total net proved reserves of 2.717 billion barrels of oil-equivalent, with 14% (386 million barrels) classified as proved undeveloped reserves[27][37]. - The company achieved an average daily oil production of 408 thousand barrels in 2021, an increase from 372 thousand barrels in 2020, with total net production also rising to 364 thousand barrels from 359 thousand barrels[43][50]. - The company reported a total average daily production on an oil-equivalent basis of 428 thousand barrels in 2021, up from 398 thousand barrels in 2020[50]. - Proved undeveloped reserves increased by 248 million oil-equivalent barrels from 2020, primarily due to developments at Cold Lake and the Montney and Duvernay unconventional assets[37]. - In 2021, the company's share of Kearl's net bitumen production was approximately 178,000 barrels per day, with total gross production reaching about 263,000 barrels per day, marking an increase of 41,000 barrels per day compared to 2020[77][78]. - Cold Lake's net bitumen production in 2021 was about 114,000 barrels per day, with gross production increasing by 8,000 barrels per day compared to 2020, attributed to improved reliability and production optimizations[81]. - The company's share of Syncrude's net production of synthetic crude oil was about 62,000 barrels per day in 2021, with gross production at approximately 71,000 barrels per day[83]. - The company holds a 50% interest in XTO Energy Canada, with net production from Montney and Duvernay assets at about 140 million cubic feet of natural gas per day and approximately 9,000 barrels per day of crude, condensate, and natural gas liquids[72]. Financial Performance - Average unit sales price for bitumen in 2021 was CAD 57.91 per barrel, significantly up from CAD 25.69 in 2020, reflecting improved market conditions[53][54]. - The average unit production cost for bitumen increased to CAD 29.06 per barrel in 2021, driven primarily by higher energy costs[56]. - The company’s average unit sales price for natural gas rose to CAD 3.83 per thousand cubic feet in 2021, compared to CAD 1.90 in 2020[53]. - Total capital and exploration expenditures for the Upstream segment were reported at CAD 632 million, with approximately CAD 124 million (20%) allocated to the development of proved undeveloped reserves[39]. - The company’s crude oil production is subject to regulatory limitations, with curtailments previously imposed in Alberta being repealed by the end of 2021[134]. - The company’s financial results are affected by the strength of the Canadian dollar against the U.S. dollar, as most commodity prices are benchmarked in U.S. dollars[176]. Refining and Sales - The company's refining throughput in 2021 was 379,000 barrels per day, an increase from 340,000 barrels per day in 2020, reflecting improved operations post-COVID-19[103]. - The average utilization of refinery capacity in 2021 was 89%, up from 80% in 2020[103]. - Total net petroleum product sales in 2021 reached 456,000 barrels per day, compared to 421,000 barrels per day in 2020, indicating a recovery in demand[112]. - Petrochemical sales volumes increased to 831,000 tonnes in 2021, up from 749,000 tonnes in 2020, driven by higher sales of intermediates and aromatics[116]. Environmental and Regulatory Factors - The company invested approximately $1.1 billion in environmental capital and operating expenditures in 2021, with expectations of about $1.0 billion in 2022[131]. - The Government of Canada aims to reduce greenhouse gas emissions by 40 to 45 percent below 2005 levels by 2030, which may affect the company's operations[167]. - The Alberta Oil Sands Emissions Limit Act sets a cap of 100 megatonnes of CO2 emissions per year in the oil sands sector, with current emissions remaining below this limit[169]. - The implementation of carbon pricing under the Greenhouse Gas Pollution Pricing Act will increase from $50 per tonne in 2022 to $170 per tonne by 2030, potentially affecting financial results[167]. - The company is subject to environmental regulations that may increase compliance costs and impact operational performance[156]. - The company faces risks from government policies that may restrict oil and gas production or increase operational costs due to environmental regulations[152]. Technological and Market Developments - The company plans to implement innovative technology to recover waste heat from boiler exhaust, potentially reducing operating costs and emissions by up to 30,000 tonnes of CO2 equivalent per year[79]. - The company's future success in energy transition relies on the development and deployment of technologies like carbon capture and sequestration (CCS)[173]. - The ability to develop CCS and lower emission technologies at a commercial scale depends on supportive government policies and market conditions[175]. - The company is focused on achieving net-zero emissions from its upstream oil sands operations, which carries risks related to the pace of technological and market developments[166]. Shareholder Information - The company purchased a total of 2,846,704 shares in October 2021 at an average price of CAD 42.70 per share[211]. - In November 2021, the company purchased 7,089,309 shares at an average price of CAD 43.49 per share[211]. - The company continued its share purchase program, with a maximum of 35,583,671 common shares allowed to be purchased by June 28, 2022[211]. - As of February 15, 2022, there were 9,826 holders of record of the company's common shares[205]. - The company has a 15% Canadian non-resident withholding tax on dividends for shareholders in countries with which Canada has an income tax convention[206]. - The withholding tax is reduced to 5% for U.S. corporations owning at least 10% of the voting shares[206]. - The company is a qualified foreign corporation for reduced U.S. capital gains tax rates applicable to dividends[207]. - The company will evaluate the renewal of its normal course issuer bid share purchase program in June 2022[212]. Operational Challenges - The company has implemented emergency response and business continuity plans in response to COVID-19, but ongoing disruptions could impact operations and demand[192]. - Future production and cash flows are highly dependent on the company's success in exploiting current reserves and replacing produced reserves[196]. - Estimates of recoverable oil and gas reserves involve uncertainties, including geological factors and regulatory changes that could impose significant compliance costs[197]. - The demand for energy and petrochemicals is closely linked to economic conditions, with recessions adversely impacting the company's results[148]. - The company’s operations may be affected by technological advancements in energy efficiency and shifts in consumer preferences towards alternative energy sources[148].

Imperial Oil Limited (NYSE:IMO) Q4 2021 Earnings Conference Call February 1, 2022 11:00 AM ET Company Participants Dave Hughes - Manager, Investor Relations Brad Corson - Chairman, President and Chief Executive Officer Daniel Lyons - Senior Vice-President, Finance and Administration Conference Call Participants Dennis Fong - CIBC Capital Markets Manav Gupta - Credit Suisse Doug Leggate - Bank of America Greg Pardy - RBC Capital Markets Neil Mehta - Goldman Sachs Group Menno Hulshof - TD Securities Phil Gres ...