```markdown [PART I. FINANCIAL INFORMATION](index=4&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial statements](index=4&type=section&id=Item%201.%20Financial%20statements) Imperial Oil Limited's unaudited consolidated financial statements for Q2 and H1 2025, prepared under U.S. GAAP, are presented [Consolidated statement of income](index=4&type=section&id=Consolidated%20statement%20of%20income) Revenues and Other Income (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :------ | :------ | :------------ | :------------ | | Revenues | 11,208 | 13,348 | 23,674 | 25,597 | | Investment and other income | 24 | 35 | 75 | 69 | | **Total revenues and other income** | **11,232** | **13,383** | **23,749** | **25,666** | Expenses (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :---------------------------------- | :------ | :------ | :------------ | :------------ | | Purchases of crude oil and products | 7,215 | 8,856 | 14,971 | 16,562 | | Production and manufacturing | 1,664 | 1,689 | 3,350 | 3,353 | | Selling and general | 251 | 221 | 510 | 467 | | Federal excise tax and fuel charge | 372 | 656 | 964 | 1,247 | | Depreciation and depletion | 478 | 456 | 1,009 | 946 | | Financing | 2 | 14 | — | 26 | | **Total expenses** | **9,988** | **11,894** | **20,817** | **22,605** | Profitability and Per Share Information (millions of Canadian dollars, unless noted) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Income before income taxes | 1,244 | 1,489 | 2,932 | 3,061 | | Income taxes | 295 | 356 | 695 | 733 | | **Net income (loss)** | **949** | **1,133** | **2,237** | **2,328** | | Net income (loss) per common share - basic (C$) | 1.86 | 2.11 | 4.39 | 4.34 | | Net income (loss) per common share - diluted (C$) | 1.86 | 2.11 | 4.38 | 4.34 | [Consolidated statement of comprehensive income](index=5&type=section&id=Consolidated%20statement%20of%20comprehensive%20income) Comprehensive Income (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------------------------- | :------ | :------ | :------------ | :------------ | | Net income (loss) | 949 | 1,133 | 2,237 | 2,328 | | Other comprehensive income (loss), net of income taxes | 5 | 13 | 22 | 29 | | **Comprehensive income (loss)** | **954** | **1,146** | **2,259** | **2,357** | [Consolidated balance sheet](index=6&type=section&id=Consolidated%20balance%20sheet) Assets (millions of Canadian dollars) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :------------------------------------------ | :----------- | :----------- | | Cash and cash equivalents | 2,386 | 979 | | Accounts receivable - net | 5,602 | 5,758 | | Inventories of crude oil and products | 1,642 | 1,642 | | Materials, supplies and prepaid expenses | 1,028 | 975 | | **Total current assets** | **10,658** | **9,354** | | Property, plant and equipment - net | 30,668 | 30,807 | | Goodwill | 166 | 166 | | Other assets, including intangibles - net | 1,592 | 1,527 | | **Total assets** | **44,178** | **42,938** | Liabilities (millions of Canadian dollars) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :------------------------------------------ | :----------- | :----------- | | Notes and loans payable | 19 | 19 | | Accounts payable and accrued liabilities | 6,710 | 6,907 | | Income taxes payable | — | 81 | | **Total current liabilities** | **6,729** | **7,007** | | Long-term debt | 3,983 | 3,992 | | Other long-term obligations | 3,901 | 3,870 | | Deferred income tax liabilities | 4,566 | 4,596 | | **Total liabilities** | **19,179** | **19,465** | Shareholders' Equity (millions of Canadian dollars) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :------------------------------------------ | :----------- | :----------- | | Common shares at stated value | 942 | 942 | | Earnings reinvested | 24,249 | 22,745 | | Accumulated other comprehensive income (loss) | (192) | (214) | | **Total shareholders' equity** | **24,999** | **23,473** | | **Total liabilities and shareholders' equity** | **44,178** | **42,938** | [Consolidated statement of shareholders' equity](index=7&type=section&id=Consolidated%20statement%20of%20shareholders'%20equity) Shareholders' Equity Changes (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Earnings reinvested at beginning of period | 23,666 | 22,781 | 22,745 | 21,907 | | Net income (loss) for the period | 949 | 1,133 | 2,237 | 2,328 | | Dividends declared | (366) | (322) | (733) | (643) | | Accumulated other comprehensive income (loss) at beginning of period | (197) | (661) | (214) | (677) | | Other comprehensive income (loss) | 5 | 13 | 22 | 29 | | **Shareholders' equity at end of period** | **24,999** | **23,936** | **24,999** | **23,936** | [Consolidated statement of cash flows](index=8&type=section&id=Consolidated%20statement%20of%20cash%20flows) Cash Flows (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Cash flows from (used in) operating activities | 1,465 | 1,629 | 2,992 | 2,705 | | Cash flows from (used in) investing activities | (472) | (456) | (849) | (937) | | Cash flows from (used in) financing activities | (371) | (329) | (736) | (612) | | **Increase (decrease) in cash and cash equivalents** | **622** | **844** | **1,407** | **1,156** | | Cash and cash equivalents at beginning of period | 1,764 | 1,176 | 979 | 864 | | **Cash and cash equivalents at end of period** | **2,386** | **2,020** | **2,386** | **2,020** | [Notes to consolidated financial statements](index=9&type=section&id=Notes%20to%20consolidated%20financial%20statements) [Note 1. Basis of financial statement preparation](index=9&type=section&id=Note%201.%20Basis%20of%20financial%20statement%20preparation) - The unaudited consolidated financial statements are prepared in accordance with U.S. GAAP and follow the same accounting policies as the 2024 annual report on Form 10-K. All adjustments are normal and recurring[17](index=17&type=chunk) - Exploration and production activities are accounted for under the "successful efforts" method[18](index=18&type=chunk) - Amounts for related party revenues and purchases for Q2 and 6 months ended June 30, 2024, were revised, with impacts offsetting to zero[19](index=19&type=chunk) [Note 2. Business segments](index=10&type=section&id=Note%202.%20Business%20segments) - In Q2 2025, benzene and aromatic solvents were reclassified from the Chemicals segment to the Downstream segment. This change was deemed immaterial, so comparative periods were not recast[23](index=23&type=chunk)[26](index=26&type=chunk) Segment Net Income (Loss) (millions of Canadian dollars) | Segment | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :---------------- | :------ | :------ | :------------ | :------------ | | Upstream | 664 | 799 | 1,395 | 1,357 | | Downstream | 322 | 294 | 906 | 925 | | Chemical | 21 | 65 | 52 | 122 | | Corporate and other | (58) | (25) | (116) | (76) | | **Consolidated Net Income** | **949** | **1,133** | **2,237** | **2,328** | Segment Capital and Exploration Expenditures (CAPEX) (millions of Canadian dollars) | Segment | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :---------------- | :------ | :------ | :------------ | :------------ | | Upstream | 353 | 267 | 619 | 557 | | Downstream | 90 | 149 | 178 | 302 | | Chemical | 1 | 3 | 4 | 8 | | Corporate and other | 29 | 43 | 70 | 91 | | **Consolidated CAPEX** | **473** | **462** | **871** | **958** | [Note 3. Investment and other income](index=14&type=section&id=Note%203.%20Investment%20and%20other%20income) Gain (Loss) on Asset Sales (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :------ | :------ | :------------ | :------------ | | Proceeds from asset sales | 2 | 3 | 13 | 7 | | Book value of asset sales | 1 | 2 | 2 | 4 | | Gain (loss) on asset sales, before tax | 1 | 1 | 11 | 3 | | Gain (loss) on asset sales, after tax | 1 | 1 | 10 | 3 | [Note 4. Employee retirement benefits](index=14&type=section&id=Note%204.%20Employee%20retirement%20benefits) Net Benefit Cost (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :------ | :------ | :------------ | :------------ | | Pension benefits | 50 | 43 | 100 | 86 | | Other postretirement benefits | 3 | 7 | 6 | 15 | [Note 5. Financing costs](index=14&type=section&id=Note%205.%20Financing%20costs) Total Financing Costs (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :-------------------------------- | :------ | :------ | :------------ | :------------ | | Debt-related interest | 27 | 52 | 64 | 104 | | Capitalized interest | (25) | (39) | (52) | (80) | | Net interest expense | 2 | 13 | 12 | 24 | | Other interest | — | 1 | (12) | 2 | | **Total financing** | **2** | **14** | **—** | **26** | [Note 6. Long-term debt](index=15&type=section&id=Note%206.%20Long-term%20debt) Long-term Debt (millions of Canadian dollars) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :---------------- | :----------- | :----------- | | Long-term debt | 3,447 | 3,447 | | Finance leases | 536 | 545 | | **Total long-term debt** | **3,983** | **3,992** | [Note 7. Other long-term obligations](index=15&type=section&id=Note%207.%20Other%20long-term%20obligations) Other Long-term Obligations (millions of Canadian dollars) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :------------------------------------------ | :----------- | :----------- | | Employee retirement benefits | 828 | 846 | | Asset retirement obligations and other environmental liabilities | 2,607 | 2,641 | | Share-based incentive compensation liabilities | 197 | 119 | | Operating lease liability | 147 | 144 | | Other obligations | 122 | 120 | | **Total other long-term obligations** | **3,901** | **3,870** | [Note 8. Financial and derivative instruments](index=16&type=section&id=Note%208.%20Financial%20and%20derivative%20instruments) - The fair value of long-term debt (**$3,447 million**, excluding finance lease obligations) was primarily a level 2 measurement as of June 30, 2025, and December 31, 2024[34](index=34&type=chunk) - The company uses commodity-based contracts, including derivatives, to manage commodity price risk and generate returns from trading. These are not accounted for under hedge accounting[35](index=35&type=chunk) Net Notional Long/(Short) Position of Derivative Instruments (thousands of barrels) | Metric | Jun 30, 2025 | Dec 31, 2024 | | :------- | :----------- | :----------- | | Crude | 4,374 | 4,260 | | Products | (1,153) | (371) | Realized and Unrealized Gain/(Loss) on Derivative Instruments (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------- | :------ | :------ | :------------ | :------------ | | Revenues | (24) | 11 | (9) | (13) | [Note 9. Common shares](index=18&type=section&id=Note%209.%20Common%20shares) - As of June 30, 2025, and December 31, 2024, the company had **509,045 thousand** common shares outstanding[41](index=41&type=chunk) - Imperial announced a new normal course issuer bid program effective June 29, 2025, to purchase up to **25,452,248** common shares (**5%** of shares on June 15, 2025) by June 28, 2026. Exxon Mobil Corporation intends to participate to maintain its **69.6%** ownership. The company plans to accelerate repurchases to complete them before year-end[41](index=41&type=chunk)[64](index=64&type=chunk)[91](index=91&type=chunk) Per Share Information and Dividends (Canadian dollars) | Metric | Q2 2025 | Q2 2024 | 6 Months 2025 | 6 Months 2024 | | :------------------------------------------ | :------ | :------ | :------------ | :------------ | | Net income (loss) per common share - basic | 1.86 | 2.11 | 4.39 | 4.34 | | Net income (loss) per common share - diluted | 1.86 | 2.11 | 4.38 | 4.34 | | Dividends per common share - declared | 0.72 | 0.60 | 1.44 | 1.20 | [Note 10. Other comprehensive income (loss) information](index=19&type=section&id=Note%2010.%20Other%20comprehensive%20income%20(loss)%20information) Changes in Accumulated Other Comprehensive Income (Loss) (millions of Canadian dollars) | Metric | 2025 | 2024 | | :------------------------------------------------------------------------------------------------ | :--- | :--- | | Balance at January 1 | (214) | (677) | | Postretirement benefits liability adjustment: Current period change excluding reclassified amounts | 12 | 4 | | Amounts reclassified from accumulated other comprehensive income | 10 | 25 | | **Balance at June 30** | **(192)** | **(648)** | [Item 2. Management's discussion and analysis of financial condition and results of operations](index=20&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Analyzes Imperial Oil Limited's financial condition and operating results for Q2 and H1 2025, covering business environment, segment performance, and liquidity [Recent business environment](index=20&type=section&id=Recent%20business%20environment) - In Q2 2025, crude oil prices decreased compared to Q1 2025, while the Canadian WTI/WCS spread narrowed due to low inventory levels[48](index=48&type=chunk) - Industry refining margins improved in Q2 2025, driven by strong seasonal demand[48](index=48&type=chunk) - The global trade environment remains volatile due to U.S. tariffs on Canadian imports and Canada's retaliatory tariffs. Uncertainty exists regarding future trade actions and their impact on Imperial, its suppliers, and customers[49](index=49&type=chunk) [Operating results](index=20&type=section&id=Operating%20results) [Second quarter 2025 vs. second quarter 2024](index=20&type=section&id=Second%20quarter%202025%20vs.%20second%20quarter%202024) [Upstream](index=20&type=section&id=Upstream%20(Q2)) - Upstream net income was impacted by lower average bitumen and synthetic crude oil realizations due to lower marker prices and a weaker Synthetic/WTI spread[51](index=51&type=chunk) - Higher volumes, primarily from Kearl (mine productivity, improved reliability) and Syncrude (timing of annual coker turnaround), partially offset the price impact[51](index=51&type=chunk)[55](index=55&type=chunk)[56](index=56&type=chunk) - Lower royalties were primarily driven by lower commodity prices[52](index=52&type=chunk) Marker Prices and Average Realizations (US$ per barrel, unless noted) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | West Texas Intermediate (US$) | 63.69 | 80.63 | -16.94 | | Western Canada Select (US$) | 53.66 | 67.03 | -13.37 | | WTI/WCS Spread (US$) | 10.03 | 13.60 | -3.57 | | Bitumen (C$ per barrel) | 65.82 | 83.02 | -17.20 | | Synthetic crude oil (C$ per barrel) | 87.85 | 111.56 | -23.71 | Production (thousands of barrels per day) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Kearl (Imperial's share) | 195 | 181 | +14 | | Cold Lake | 145 | 147 | -2 | | Syncrude | 77 | 66 | +11 | [Downstream](index=21&type=section&id=Downstream%20(Q2)) - Higher margins primarily reflect improved market conditions[57](index=57&type=chunk) - Lower refinery throughput was due to unplanned downtime, partially offset by lower turnaround impacts[58](index=58&type=chunk) - Petroleum product sales increased, enabled by the Trans Mountain pipeline expansion[59](index=59&type=chunk) Refinery Utilization and Petroleum Product Sales (thousands of barrels per day, unless noted) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Refinery throughput | 376 | 387 | -11 | | Refinery capacity utilization (%) | 87 | 89 | -2 | | Petroleum product sales | 480 | 470 | +10 | [Chemicals](index=22&type=section&id=Chemicals%20(Q2)) Net Income (Loss) (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Net income (loss) | 21 | 65 | [Corporate and other](index=22&type=section&id=Corporate%20and%20other%20(Q2)) Net Income (Loss) (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | | :-------------------------- | :------ | :------ | | Net income (loss) | (58) | (25) | [Six months 2025 vs. six months 2024](index=23&type=section&id=Six%20months%202025%20vs.%20six%20months%202024) [Upstream](index=23&type=section&id=Upstream%20(6%20Months)) - Average bitumen and synthetic crude oil realizations decreased due to lower marker prices, partially offset by a narrowing WTI/WCS spread and lower diluent costs[66](index=66&type=chunk) - Higher volumes were driven by Grand Rapids solvent-assisted SAGD and the timing of the annual coker turnaround at Syncrude[67](index=67&type=chunk)[72](index=72&type=chunk) - Lower royalties were primarily due to lower commodity prices[68](index=68&type=chunk) - Favorable foreign exchange impacts contributed approximately **$170 million**[69](index=69&type=chunk) Marker Prices and Average Realizations (US$ per barrel, unless noted) | Metric | 6 Months 2025 | 6 Months 2024 | Change | | :-------------------------- | :------------ | :------------ | :----- | | West Texas Intermediate (US$) | 67.52 | 78.77 | -11.25 | | Western Canada Select (US$) | 56.25 | 62.34 | -6.09 | | WTI/WCS Spread (US$) | 11.27 | 16.43 | -5.16 | | Bitumen (C$ per barrel) | 70.50 | 74.70 | -4.20 | | Synthetic crude oil (C$ per barrel) | 93.14 | 102.10 | -8.96 | Production (thousands of barrels per day) | Metric | 6 Months 2025 | 6 Months 2024 | Change | | :-------------------------- | :------------ | :------------ | :----- | | Kearl (Imperial's share) | 189 | 189 | 0 | | Cold Lake | 150 | 144 | +6 | | Syncrude | 75 | 70 | +5 | [Downstream](index=24&type=section&id=Downstream%20(6%20Months)) - Higher margins primarily reflect improved market conditions[73](index=73&type=chunk) - Unfavorable wholesale volume impacts of about **$70 million**[73](index=73&type=chunk) - Lower refinery throughput was primarily due to unplanned downtime, partially offset by lower turnaround impacts[74](index=74&type=chunk) Refinery Utilization and Petroleum Product Sales (thousands of barrels per day, unless noted) | Metric | 6 Months 2025 | 6 Months 2024 | Change | | :-------------------------- | :------------ | :------------ | :----- | | Refinery throughput | 387 | 397 | -10 | | Refinery capacity utilization (%) | 89 | 92 | -3 | | Petroleum product sales | 468 | 460 | +8 | [Chemicals](index=24&type=section&id=Chemicals%20(6%20Months)) - Lower margins primarily reflect weaker industry polyethylene margins[75](index=75&type=chunk) Net Income (Loss) (millions of Canadian dollars) | Metric | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :------------ | :------------ | | Net income (loss) | 52 | 122 | [Corporate and other](index=25&type=section&id=Corporate%20and%20other%20(6%20Months)) Net Income (Loss) (millions of Canadian dollars) | Metric | 6 Months 2025 | 6 Months 2024 | | :-------------------------- | :------------ | :------------ | | Net income (loss) | (116) | (76) | [Liquidity and capital resources](index=22&type=section&id=Liquidity%20and%20capital%20resources) [Second Quarter](index=22&type=section&id=Second%20Quarter%20(Liquidity)) - Cash flows from operating activities primarily reflect lower earnings and lower favorable working capital impacts[61](index=61&type=chunk) - Cash flows used in investing activities primarily reflect higher additions to property, plant and equipment[62](index=62&type=chunk) - Cash flows used in financing activities primarily reflect dividends paid. The company did not purchase shares in Q2 2025 or Q2 2024[63](index=63&type=chunk) Cash Flows (millions of Canadian dollars) | Metric | Q2 2025 | Q2 2024 | Change | | :------------------------------------------ | :------ | :------ | :----- | | Operating activities | 1,465 | 1,629 | -164 | | Investing activities | (472) | (456) | -16 | | Financing activities | (371) | (329) | -42 | | Increase (decrease) in cash and cash equivalents | 622 | 844 | -222 | | Cash and cash equivalents at period end | 2,386 | 2,020 | +366 | Dividends Paid (millions of Canadian dollars, unless noted) | Metric | Q2 2025 | Q2 2024 | Change | | :-------------------------- | :------ | :------ | :----- | | Dividends paid | 367 | 321 | +46 | | Per share dividend paid (dollars) | 0.72 | 0.60 | +0.12 | [Six Months](index=25&type=section&id=Six%20Months%20(Liquidity)) - Cash flows from operating activities primarily reflect lower unfavorable deferred tax and working capital impacts[77](index=77&type=chunk) - Cash flows used in investing activities primarily reflect lower additions to property, plant and equipment[78](index=78&type=chunk) - The company did not purchase any shares during the six months ended June 30, 2025, and 2024[79](index=79&type=chunk) Cash Flows (millions of Canadian dollars) | Metric | 6 Months 2025 | 6 Months 2024 | Change | | :------------------------------------------ | :------------ | :------------ | :----- | | Operating activities | 2,992 | 2,705 | +287 | | Investing activities | (849) | (937) | +88 | | Financing activities | (736) | (612) | -124 | | Increase (decrease) in cash and cash equivalents | 1,407 | 1,156 | +251 | Dividends Paid (millions of Canadian dollars, unless noted) | Metric | 6 Months 2025 | 6 Months 2024 | Change | | :-------------------------- | :------------ | :------------ | :----- | | Dividends paid | 674 | 599 | +75 | | Per share dividend paid (dollars) | 1.32 | 1.10 | +0.22 | [Forward-looking statements](index=26&type=section&id=Forward-looking%20statements) - This section identifies forward-looking statements related to future events or conditions, including projections, targets, expectations, estimates, and business plans[80](index=80&type=chunk) - Forward-looking statements are based on current expectations and assumptions, but actual future results could differ materially due to various factors such as energy demand, production rates, project execution, government policies, commodity prices, and economic conditions[81](index=81&type=chunk)[82](index=82&type=chunk) - Readers are cautioned not to place undue reliance on forward-looking statements, as they are not guarantees of future performance and involve risks and uncertainties. Imperial undertakes no obligation to update them, except as required by law[83](index=83&type=chunk) [Item 3. Quantitative and qualitative disclosures about market risk](index=27&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) Market risk disclosures for H1 2025 do not materially differ from the 2024 annual report on Form 10-K - Market risk disclosures for the six months ended June 30, 2025, are consistent with those in the 2024 annual report on Form 10-K[84](index=84&type=chunk) [Item 4. Controls and procedures](index=27&type=section&id=Item%204.%20Controls%20and%20procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls - The company's principal executive and financial officers concluded that disclosure controls and procedures were effective as of June 30, 2025[85](index=85&type=chunk) - There have been no material changes to the company's internal control over financial reporting during the last fiscal quarter[85](index=85&type=chunk) [PART II. OTHER INFORMATION](index=28&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal proceedings](index=28&type=section&id=Item%201.%20Legal%20proceedings) Imperial Oil Limited uses a **$1 million** (U.S. dollars) threshold for disclosing environmental legal proceedings - Imperial uses a **$1 million** (U.S. dollars) threshold for disclosing environmental legal proceedings[88](index=88&type=chunk) [Item 2. Unregistered sales of equity securities and use of proceeds](index=28&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) Details issuer equity security purchases, with no Q2 2025 activity, and a new program to repurchase up to **25.45 million** shares - No shares were purchased by the issuer during April, May, or June 2025[89](index=89&type=chunk) - A new normal course issuer bid program was approved on June 23, 2025, allowing the company to purchase up to **25,452,248** common shares (**5%** of total shares) from June 29, 2025, to June 28, 2026[91](index=91&type=chunk) - Exxon Mobil Corporation intends to participate in the share purchase program to maintain its **69.6%** ownership percentage. Imperial plans to accelerate share purchases to complete them prior to year-end[91](index=91&type=chunk) [Item 5. Other information](index=28&type=section&id=Item%205.%20Other%20information) No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers in Q2 2025 - No Rule 10b5-1 or non-Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers during Q2 2025[93](index=93&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including executive and financial officer certifications and Interactive Data Files - The report includes certifications by the principal executive and financial officers (Exhibits 31.1, 31.2, 32.1, 32.2)[94](index=94&type=chunk) - Interactive Data Files (formatted as Inline XBRL) and the Cover Page Interactive Data File are included as Exhibits 101 and 104[94](index=94&type=chunk) [SIGNATURES](index=30&type=section&id=SIGNATURES) - The report was signed on **August 4, 2025**, by Daniel E. Lyons (Senior vice-president, finance and administration, and controller) and Cathryn Walker (Assistant corporate secretary)[96](index=96&type=chunk) ```

Core Insights - Imperial Oil reported Q2 2025 results with historic upstream production but lower overall profits due to weaker commodity prices [1][6] - Revenue reached $11.2 billion, significantly exceeding analyst estimates of $8.91 billion, while earnings per share (EPS) was $1.86, surpassing the expected $1.19 [1][2] - Despite year-over-year declines in profit and revenue, operational gains and project launches were notable highlights [1][5] Financial Performance - Q2 2025 EPS (GAAP) was $1.86, down 11.8% from $2.11 in Q2 2024 [2] - Revenue (GAAP) was $11.2 billion, with a net income of $949 million, a decrease from $1,133 million in Q2 2024, reflecting a 16.2% decline [2][6] - Free cash flow (non-GAAP) was $993 million, down 15.3% from $1,173 million in Q2 2024 [2] Production and Operational Highlights - Gross upstream production reached 427,000 barrels per day, the highest second-quarter output in over 30 years [5] - Kearl oil sands facility set a new record with production of 275,000 barrels per day, up from 255,000 barrels per day in Q2 2024 [5] - Syncrude output increased by 16.7% to 77,000 barrels per day from 66,000 barrels per day in Q2 2024 [5] Cost Management and Efficiency - Upstream unit cash costs (non-GAAP) decreased to $29.00 per barrel from $32.75 in Q2 2024 [6] - Cold Lake production costs are targeted to reach $13 per barrel as part of ongoing cost reduction efforts [6] Project Execution and Future Outlook - Major projects include the completion of maintenance at Kearl and the initiation of steam injection at the Leming SAGD project, with first oil expected by late 2025 [7] - The Strathcona refinery's renewable diesel facility is set to provide lower-emission fuels to the Canadian transportation sector [8] - Management signaled confidence in operational momentum and emphasized priorities such as maximizing reliability and controlling unit costs [11] Dividend and Share Repurchase - The company paid $367 million in dividends, maintaining a dividend of $0.72 per share [10] - Management renewed authorization to repurchase up to 5% of shares, with plans to accelerate purchases [10] Environmental Investments - Ongoing environmental investments are projected to reach approximately $2.6 billion in 2025, crucial for compliance and brand positioning [12]

Financial Data and Key Metrics Changes - The company reported net income of $949 million, down $184 million from 2024, primarily due to lower upstream realizations, partially offset by higher production volumes [9] - Cash flow from operations was nearly $1.5 billion, with $2.4 billion in cash on hand at the end of the quarter [5][10] - Capital expenditures totaled $473 million, which is $11 million higher than 2024, primarily due to project timing [11] Business Line Data and Key Metrics Changes - Upstream earnings were $664 million, down $67 million from the first quarter, primarily due to lower realizations [9] - Downstream earnings were $322 million, down $262 million from the first quarter, mainly reflecting lower margin capture [9] - Chemical business generated earnings of $21 million, down $10 million from the first quarter [10][23] Market Data and Key Metrics Changes - Upstream production averaged 427,000 oil equivalent barrels per day, up 9,000 barrels per day versus the first quarter and up 23,000 barrels per day versus 2024 [13] - Kearl production set a second quarter record averaging 275,000 barrels per day gross, up 19,000 barrels per day versus the first quarter [14] - Petroleum product sales were 480,000 barrels per day, up 25,000 barrels per day versus 2025, enabled by the Trans Mountain pipeline expansion [22] Company Strategy and Development Direction - The company is focused on maximizing value from existing assets and selectively investing in growth opportunities, including Kearl and Coal Lake [35] - The renewable diesel facility at Strathcona has been completed, with first production beginning in July, aligning with the company's strategy of advancing responsible energy solutions [21][25] - The company plans to accelerate share repurchases through its normal course issuer bid (NCIB) [8][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to complete the NCIB without leveraging the balance sheet, citing strong cash flow projections [31] - The company remains optimistic about future investment opportunities and constructive dialogue with the federal government [7] - Management highlighted the importance of technology and operational efficiency in driving future growth and maintaining competitive advantages [41][49] Other Important Information - The company announced a third quarter dividend of $0.72 per share, consistent with the second quarter dividend [12] - The turnaround at Kearl was completed safely and successfully in under nineteen days, enabling a doubling of the turnaround interval [15] Q&A Session Summary Question: Why was the decision made to accelerate the NCIB? - Management expressed confidence in completing the NCIB without leveraging the balance sheet, supported by strong cash flow and commodity prices [31] Question: What drives the investment case for Imperial despite strong year-to-date performance? - Management emphasized their strategy of responsibly increasing cash flow and delivering unmatched shareholder returns, supported by competitive advantages and ongoing improvements in operations [35] Question: What insights have been gained from deploying autonomous technology? - Management noted that the autonomous haul system has successfully reduced unit cash costs and is part of a broader technology strategy [41] Question: What is the status of the SAGD projects at Cold Lake? - Management highlighted the competitive advantage of using solvent-assisted SAGD technology and provided updates on ongoing projects and future plans [104][108] Question: How does the Trans Mountain expansion impact refined product sales? - Management explained that the expansion provided additional supply flexibility, allowing the company to meet steady demand and enhance margins [78][81]

Financial Data and Key Metrics Changes - The company reported net income of $949 million, down $184 million from 2024, primarily due to lower upstream realizations, partially offset by higher production volumes [8][9] - Cash flow from operations was nearly $1.5 billion, with $2.4 billion in cash on hand at the end of the quarter [4][10] - Capital expenditures totaled $473 million, which is $11 million higher than 2024, primarily due to project timing [11] Business Line Data and Key Metrics Changes - Upstream earnings were $664 million, down $67 million from the first quarter, primarily due to lower realizations [9] - Downstream earnings were $322 million, down $262 million from the first quarter, mainly reflecting lower margin capture [9] - Chemical business generated earnings of $21 million, down $10 million from the first quarter [10][22] Market Data and Key Metrics Changes - Upstream production averaged 427,000 oil equivalent barrels per day, up 9,000 barrels per day versus the first quarter and up 23,000 barrels per day versus 2024 [13] - Kearl production set a second quarter record averaging 275,000 barrels per day gross, up 19,000 barrels per day versus the first quarter [14] - Petroleum product sales were 480,000 barrels per day, up 25,000 barrels per day versus 2025, enabled by the Trans Mountain pipeline expansion [21] Company Strategy and Development Direction - The company is focused on returning surplus cash to shareholders and has accelerated share repurchases through its NCIB program [7][25] - Major project milestones include the completion of the renewable diesel facility at Strathcona and the start of production in July [20][23] - The company is optimistic about future investments and government support for major projects in Canada [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate market volatility and maintain safe, reliable operations [5] - The outlook for the second half of the year is strong, with expectations for higher production volumes and further progress on unit cash cost reductions [16][24] - Management emphasized the importance of technology and operational efficiency in driving future growth [41][46] Other Important Information - The company plans to maintain a disciplined approach to capital allocation, prioritizing reliable and growing dividends [90] - The renewable diesel project aligns with the company's long-term strategy of advancing responsible energy solutions [20] Q&A Session Summary Question: Why was the decision made to accelerate the NCIB? - Management expressed confidence in completing the NCIB without leveraging the balance sheet, supported by strong cash flow and commodity prices [29][30] Question: What drives the investment case for Imperial despite strong year-to-date performance? - Management highlighted their strategy of responsibly increasing cash flow and delivering unmatched shareholder returns, supported by competitive advantages and technology [32][35] Question: Insights on the autonomous fleet technology? - Management noted the success of the autonomous haul system, which has reduced unit cash costs and is part of a broader technology strategy [40][42] Question: Status of the SAGD projects at Cold Lake? - Management discussed the competitive advantage of using solvent-assisted SAGD technology and the timeline for upcoming projects [100][105] Question: CapEx spending lower than expected, what drove that? - Management indicated that the lower spending was due to timing effects, with no change to the full-year guidance [67][69]

Core Viewpoint - Imperial Oil reported quarterly earnings of $1.34 per share, exceeding the Zacks Consensus Estimate of $1.22 per share, but down from $1.54 per share a year ago, indicating a +9.84% earnings surprise [1] Group 1: Earnings Performance - The company has surpassed consensus EPS estimates for the last four quarters [2] - Imperial Oil's revenues for the quarter ended June 2025 were $8.12 billion, missing the Zacks Consensus Estimate by 23.02%, and down from $9.78 billion year-over-year [2] - The company has not beaten consensus revenue estimates in the last four quarters [2] Group 2: Stock Performance - Imperial Oil shares have increased approximately 35.5% since the beginning of the year, compared to the S&P 500's gain of 7.8% [3] - The stock's immediate price movement will depend on management's commentary during the earnings call [3] Group 3: Future Outlook - The current consensus EPS estimate for the upcoming quarter is $1.24 on revenues of $10.2 billion, and for the current fiscal year, it is $5.57 on revenues of $37.93 billion [7] - The Zacks Industry Rank for Oil and Gas - Integrated - Canadian is in the top 40% of over 250 Zacks industries, indicating a favorable outlook [8] Group 4: Competitor Insights - Suncor Energy, a competitor in the same industry, is expected to report quarterly earnings of $0.50 per share, reflecting a year-over-year decline of -46.2% [9] - Suncor Energy's anticipated revenues are $7.65 billion, down 19.7% from the previous year [10]

[Q2 2025 Financial and Operating Results](index=1&type=section&id=Imperial%20announces%20second%20quarter%202025%20financial%20and%20operating%20results) Imperial announces its second quarter 2025 financial and operating results, highlighting key performance metrics and strategic advancements [Financial and Operating Highlights](index=1&type=section&id=Financial%20and%20Operating%20Highlights) Imperial reported a net income of $949 million in Q2 2025, a decrease from Q2 2024, despite achieving record upstream production and advancing strategic projects Q2 2025 Key Financial Metrics | Metric | Q2 2025 (million CAD) | Q2 2024 (million CAD) | Change (million CAD) | Six Months 2025 (million CAD) | Six Months 2024 (million CAD) | Change (million CAD) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | $949 | $1,133 | ($184) | $2,237 | $2,328 | ($91) | | Diluted EPS (CAD) | $1.86 | $2.11 | ($0.25) | $4.38 | $4.34 | +$0.04 | | Cash Flow from Operations | $1,465 | $1,629 | ($164) | $2,992 | $2,705 | +$287 | | Capital & Exploration Expenditures | $473 | $462 | +$11 | $871 | $958 | ($87) | - Upstream production reached **427,000 gross oil-equivalent barrels per day**, marking the highest second-quarter output in over 30 years[3](index=3&type=chunk)[6](index=6&type=chunk) - Kearl achieved its highest-ever second-quarter total gross production, averaging **275,000 barrels per day** (**195,000 barrels Imperial's share**)[3](index=3&type=chunk)[6](index=6&type=chunk)[12](index=12&type=chunk) - The company completed construction and commissioning of Canada's largest renewable diesel facility at the Strathcona refinery, with first production in July[6](index=6&type=chunk)[7](index=7&type=chunk)[12](index=12&type=chunk) [Shareholder Returns and Business Environment](index=2&type=section&id=Shareholder%20Returns%20and%20Business%20Environment) Imperial renewed its share repurchase program and returned $367 million to shareholders amidst lower crude prices but improved refining margins - The company renewed its share repurchase program (NCIB) to buy back up to **5%** of outstanding common shares and plans to accelerate purchases to complete the program before the end of the year[6](index=6&type=chunk)[8](index=8&type=chunk)[12](index=12&type=chunk) - Returned **$367 million** to shareholders in Q2 2025 through dividend payments and declared a Q3 dividend of **$0.72 per share**[7](index=7&type=chunk)[12](index=12&type=chunk) - The Q2 2025 business environment saw decreased crude oil prices from Q1, a narrower Canadian WTI/WCS spread, and improved refining margins due to strong seasonal demand[13](index=13&type=chunk) [Segment Performance Analysis (Q2 2025 vs Q2 2024)](index=4&type=section&id=Segment%20Performance%20Analysis%20%28Q2%202025%20vs%20Q2%202024%29) Upstream net income declined due to lower prices, Downstream improved from better margins, and Chemicals significantly dropped from weaker polyethylene margins Net Income by Segment (Q2, million CAD) | Segment | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Upstream | $664 | $799 | ($135) | | Downstream | $322 | $294 | +$28 | | Chemical | $21 | $65 | ($44) | | Corporate and other | ($58) | ($25) | ($33) | | **Total Net Income** | **$949** | **$1,133** | **($184)** | [Upstream](index=4&type=section&id=Upstream_Q2) Upstream net income decreased to $664 million due to lower commodity prices, partially offset by higher production volumes from Kearl and Syncrude Average Realizations (CAD per barrel) | Product | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Bitumen | $65.82 | $83.02 | | Synthetic crude oil | $87.85 | $111.56 | Gross Production (thousand barrels per day) | Asset | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Kearl (Imperial's share) | 195 | 181 | | Cold Lake | 145 | 147 | | Syncrude | 77 | 66 | - Higher production at Kearl was driven by mine productivity and improved reliability, while higher Syncrude production was due to the timing of its annual coker turnaround[21](index=21&type=chunk)[22](index=22&type=chunk) [Downstream](index=5&type=section&id=Downstream_Q2) Downstream net income rose to $322 million, driven by improved margins and increased petroleum product sales, despite slightly lower refinery throughput Downstream Operations | Metric | Q2 2025 (kbbl/d) | Q2 2024 (kbbl/d) | | :--- | :--- | :--- | | Refinery throughput | 376 | 387 | | Refinery capacity utilization (%) | 87% | 89% | | Petroleum product sales | 480 | 470 | - Higher margins were the primary driver of increased net income, reflecting improved market conditions[23](index=23&type=chunk) - Increased petroleum product sales were enabled by the Trans Mountain pipeline expansion[25](index=25&type=chunk) [Chemicals](index=6&type=section&id=Chemicals_Q2) Chemicals net income sharply declined to $21 million, primarily due to significantly lower polyethylene margins - Chemical net income was **$21 million** in Q2 2025, compared to **$65 million** in Q2 2024[12](index=12&type=chunk)[62](index=62&type=chunk) - The decline in chemical earnings was primarily driven by lower polyethylene margins[12](index=12&type=chunk)[26](index=26&type=chunk) [Liquidity and Capital Resources (Q2 2025)](index=6&type=section&id=Liquidity%20and%20Capital%20Resources%20%28Q2%202025%29) Q2 2025 saw operating cash flow decrease to $1,465 million due to lower earnings, with $371 million used in financing activities, primarily for dividends Cash Flow Summary (Q2, million CAD) | Activity | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Operating activities | 1,465 | 1,629 | | Investing activities | (472) | (456) | | Financing activities | (371) | (329) | | **Increase in cash** | **622** | **844** | - Dividends paid in the quarter totaled **$367 million**, or **$0.72 per share**, up from **$321 million**, or **$0.60 per share**, in Q2 2024[30](index=30&type=chunk) - The company did not repurchase any shares during the second quarter of 2025 or 2024[30](index=30&type=chunk) [Year-to-Date Performance Analysis (Six Months 2025 vs 2024)](index=7&type=section&id=Year-to-Date%20Performance%20Analysis%20%28Six%20Months%202025%20vs%202024%29) Year-to-date net income slightly decreased to $2,237 million, with Upstream earnings increasing, while Downstream and Chemicals declined Net Income by Segment (Six Months, million CAD) | Segment | 6M 2025 | 6M 2024 | Change | | :--- | :--- | :--- | :--- | | Upstream | $1,395 | $1,357 | +$38 | | Downstream | $906 | $925 | ($19) | | Chemical | $52 | $122 | ($70) | | Corporate and other | ($116) | ($76) | ($40) | | **Total Net Income** | **$2,237** | **$2,328** | **($91)** | [Upstream](index=7&type=section&id=Upstream_6M) Upstream net income increased to $1,395 million year-to-date, driven by higher volumes and favorable foreign exchange, despite lower commodity prices Gross Production (Six Months, thousand barrels per day) | Asset | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Kearl (Imperial's share) | 189 | 189 | | Cold Lake | 150 | 144 | | Syncrude | 75 | 70 | - Key drivers for higher year-to-date income were higher volumes, primarily from Grand Rapids solvent-assisted SAGD, and favorable foreign exchange impacts[34](index=34&type=chunk)[37](index=37&type=chunk) [Downstream](index=8&type=section&id=Downstream_6M) Downstream net income slightly decreased to $906 million year-to-date, as improved margins were offset by unfavorable wholesale volumes and lower throughput Downstream Operations (Six Months) | Metric | 6M 2025 (kbbl/d) | 6M 2024 (kbbl/d) | | :--- | :--- | :--- | | Refinery throughput | 387 | 397 | | Refinery capacity utilization (%) | 89% | 92% | | Petroleum product sales | 468 | 460 | - The earnings decrease was primarily due to unfavorable wholesale volume impacts of about **$70 million**[39](index=39&type=chunk) [Chemicals](index=8&type=section&id=Chemicals_6M) Chemicals net income significantly declined to $52 million year-to-date, primarily due to weaker industry polyethylene margins - Chemical net income was **$52 million** for the first six months of 2025, down from **$122 million** in 2024, primarily due to weaker polyethylene margins[41](index=41&type=chunk)[62](index=62&type=chunk) [Liquidity and Capital Resources (Six Months 2025)](index=10&type=section&id=Liquidity%20and%20Capital%20Resources%20%28Six%20Months%202025%29) Year-to-date operating cash flow increased to $2,992 million, driven by lower deferred tax and working capital impacts, while financing cash use rose due to higher dividends Cash Flow Summary (Six Months, million CAD) | Activity | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Operating activities | 2,992 | 2,705 | | Investing activities | (849) | (937) | | Financing activities | (736) | (612) | | **Increase in cash** | **1,407** | **1,156** | - Dividends paid in the first six months totaled **$674 million**, or **$1.32 per share**, up from **$599 million**, or **$1.10 per share**, in the same period of 2024[46](index=46&type=chunk) [Forward-Looking Statements](index=11&type=section&id=Forward-looking%20statements) This section outlines forward-looking statements on future plans and projections, subject to various risks and uncertainties that could cause actual results to differ materially - Forward-looking statements include plans to accelerate the NCIB share repurchase program, commitment to returning surplus cash to shareholders, and expected performance from the Strathcona renewable diesel and Leming SAGD projects[48](index=48&type=chunk) - Actual results could differ materially due to factors like changes in supply and demand for oil, regulatory events, competition, operational difficulties, and currency exchange rates[50](index=50&type=chunk)[51](index=51&type=chunk) [Financial Statements and Operating Data (Attachments)](index=13&type=section&id=Financial%20Statements%20and%20Operating%20Data%20%28Attachments%29) This section provides detailed unaudited financial and operating data, including consolidated statements, segmented results, operating statistics, and non-GAAP reconciliations [Consolidated Financial Statements](index=13&type=section&id=Consolidated%20Financial%20Statements) This section presents the Consolidated Statement of Income and Cash Flows, detailing revenues, expenses, net income, and cash movements from core activities Consolidated Income Statement Summary (Q2, million CAD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues and other income | 11,232 | 13,383 | | Total expenses | 9,988 | 11,894 | | Income before income taxes | 1,244 | 1,489 | | Net income | 949 | 1,133 | Consolidated Cash Flow Summary (Six Months, million CAD) | Item | 6M 2025 | 6M 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | 2,992 | 2,705 | | Cash flows from investing activities | (849) | (937) | | Cash flows from financing activities | (736) | (612) | [Segmented Data and Operating Statistics](index=15&type=section&id=Segmented%20Data%20and%20Operating%20Statistics) This section provides detailed segmented financial data and operating statistics, including production volumes, price realizations, and refinery metrics - Attachment III provides a comprehensive breakdown of revenues, purchases, production costs, and capital expenditures for each business segment (Upstream, Downstream, Chemical)[62](index=62&type=chunk) - Attachment IV details key operating metrics, including gross and net crude oil and natural gas production, refinery throughput and utilization, and sales volumes for various petroleum products[64](index=64&type=chunk) [Non-GAAP Financial Measures Reconciliation](index=18&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) This section explains and reconciles non-GAAP financial measures like 'Free cash flow' and 'Cash operating costs' to their comparable GAAP figures for transparency Free Cash Flow Reconciliation (Q2, million CAD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Cash flows from operating activities | 1,465 | 1,629 | | Additions to property, plant and equipment | (471) | (461) | | Proceeds from asset sales | 2 | 3 | | Other investing activities | (3) | 2 | | **Free cash flow** | **993** | **1,173** | Cash Operating Costs Reconciliation (Q2, million CAD) | Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total expenses | 9,988 | 11,894 | | Less: Purchases, taxes, D&D, etc. | (8,073) | (9,983) | | **Cash operating costs** | **1,915** | **1,911** |

Core Insights - Imperial Oil (IMO) is expected to report quarterly earnings of $1.22 per share, a decline of 20.8% year-over-year, with revenues projected at $10.54 billion, reflecting a 7.8% increase compared to the previous year [1] Earnings Estimates - The consensus EPS estimate has been revised 1.4% higher over the last 30 days, indicating a collective reevaluation by analysts [2] - Revisions to earnings estimates are crucial indicators for predicting investor actions regarding the stock, with empirical research showing a strong correlation between earnings estimate trends and short-term stock price performance [3] Key Metrics Projections - Analysts estimate 'Gross Oil - Equivalent Production' to reach 416 thousand barrels, up from 404 thousand barrels year-over-year [5] - 'Gross Natural Gas Production' is forecasted at 29.59 thousand cubic feet, slightly down from 30.00 thousand cubic feet in the same quarter last year [5] - 'Gross Total Crude Oil Production' is projected at 410 thousand barrels, compared to 399 thousand barrels in the same quarter of the previous year [6] - 'Net Crude Oil and NGL Production per day - Kearl' is expected to be 173 thousand barrels, up from 167 thousand barrels year-over-year [7] - 'Net Crude Oil and NGL Production per day - Cold Lake' is estimated at 109 thousand barrels, consistent with the previous year's figure [8] - 'Gross Crude Oil and NGL Production per day - Syncrude' is projected at 79 thousand barrels, an increase from 66 thousand barrels year-over-year [9] - 'Total Refinery Throughput' is estimated at 393 thousand barrels, up from 387 thousand barrels in the same quarter last year [10] - 'Net Petroleum Products Sales' is expected to be 458 thousand barrels, down from 470 thousand barrels in the same quarter last year [11] Stock Performance - Over the past month, shares of Imperial Oil have returned +4.1%, outperforming the Zacks S&P 500 composite's +2.7% change [12] - Currently, Imperial Oil holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [12]

Core Viewpoint - Analysts forecast a quarterly earnings per share (EPS) of $1.22 for Imperial Oil, indicating a year-over-year decline of 20.8%, while revenues are expected to reach $10.54 billion, reflecting a 7.8% increase compared to the same quarter last year [1]. Earnings Estimates - The consensus EPS estimate has been revised upward by 1.4% over the past 30 days, indicating a collective reassessment by analysts [2]. - Changes in earnings estimates are crucial for predicting investor reactions, as empirical research shows a strong correlation between earnings estimate revisions and short-term stock performance [3]. Key Metrics Projections - Gross Oil - Equivalent Production is projected to reach 416 thousand barrels, up from 404 thousand barrels in the same quarter last year [5]. - Gross Natural Gas Production is estimated at 29.59 thousand cubic feet, slightly down from 30.00 thousand cubic feet year-over-year [5]. - Gross Total Crude Oil Production is expected to be 410 thousand barrels, compared to 399 thousand barrels in the previous year [6]. - Net Crude Oil and NGL Production per day from Kearl is anticipated at 173 thousand barrels, up from 167 thousand barrels year-over-year [7]. - Net Crude Oil and NGL Production per day from Cold Lake is expected to remain stable at 109 thousand barrels, unchanged from the previous year [7]. - Gross Crude Oil and NGL Production per day from Syncrude is projected to reach 79 thousand barrels, an increase from 66 thousand barrels year-over-year [8]. - Total Refinery throughput is forecasted at 393 thousand barrels, up from 387 thousand barrels in the same quarter last year [9]. Stock Performance - Over the past month, shares of Imperial Oil have returned +6.8%, outperforming the Zacks S&P 500 composite's +3.6% change [11]. - Currently, Imperial Oil holds a Zacks Rank 3 (Hold), suggesting its performance may align with the overall market in the near future [11].

Summary of Global Oil and Gas Valuation Report Industry Overview - The report focuses on the **Global Oil and Gas** industry, providing insights into major companies and market dynamics as of **July 18, 2025** [1][2]. Key Companies Mentioned - **India**: Bharat Petroleum, Hindustan Petroleum, Indian Oil, ONGC, Reliance Industries - **Europe**: BP, BW LPG, Ceres Power, ENI, Fuchs Petrolub, Galp, Industrie De Nora, ITM Power, MOL, Motor Oil - **North America**: Aemetis, Antero Resources, APA Corp, Chevron, ExxonMobil, Halliburton, Suncor Energy, Valero Energy - **China**: CNOOC, Petrochina, Sinopec - **Saudi Arabia**: Saudi Aramco - **Others**: Companies from South Africa, Thailand, South Korea, Japan, Australia, and Latin America are also included [2]. Core Insights and Arguments - **Valuation Metrics**: The report provides various valuation metrics such as **EV/DACF**, **FCF Yield**, and **P/E Ratios** for major oil companies, indicating their financial health and market performance [9]. - **Performance Ratings**: Companies are rated based on their performance, with **Chevron** and **ExxonMobil** receiving "Buy" ratings, while **Equinor** is rated as "Sell" [9]. - **Growth Projections**: The report includes **CAGR** estimates for 2024-2027, indicating expected growth rates for different companies, with **Cenovus Energy** projected to have a **78%** upside potential [9]. - **Market Trends**: The report highlights trends in the oil and gas sector, including shifts towards renewable energy and the impact of geopolitical factors on oil prices [6]. Important but Overlooked Content - **Analyst Conflicts of Interest**: The report discloses potential conflicts of interest due to UBS's business relationships with covered companies, which may affect the objectivity of the analysis [4][5]. - **Macro Assumptions**: The report includes macroeconomic assumptions that underpin the valuations, sourced from reputable databases like Bloomberg and Reuters [6]. - **Definitions and Metrics**: Key financial metrics and definitions are provided to ensure clarity in the analysis, such as the **Nelson Complexity Index** for refining capacity [8]. Conclusion - The **Global Oil and Gas Valuation Report** provides a comprehensive analysis of the industry, highlighting key players, financial metrics, and growth projections while also addressing potential conflicts of interest and macroeconomic assumptions that could influence investment decisions [1][2][4][5][9].

Investment Rating - The report provides a "Neutral" rating for BP and Eni, while it assigns a "Buy" rating to Chevron, ExxonMobil, Shell, TotalEnergies, GALP, OMV, and Cenovus Energy, indicating a positive outlook for these companies [10]. Core Insights - The report highlights that the global oil and gas sector is expected to experience a compound annual growth rate (CAGR) of 6.5% from 2024 to 2027, driven by increasing demand and recovering prices [10]. - The Brent front month price is projected to stabilize around $65.99 per barrel in 2025, while WTI is expected to be at $62.13 per barrel, reflecting a recovery from previous lows [7]. - Refining margins are anticipated to fluctuate, with European composite margins expected to average around $5.00 per barrel in 2025, indicating a challenging environment for refiners [7]. Summary by Sections Company Ratings and Projections - BP: Current price at 393.0, target price 400, with a 2% upside and a Neutral rating [10] - Chevron: Current price at 148.19, target price 177, with a 19% upside and a Buy rating [10] - ExxonMobil: Current price at 113.19, target price 130, with a 15% upside and a Buy rating [10] - Shell: Current price at 2,698, target price 2,900, with a 7% upside and a Buy rating [10] - TotalEnergies: Current price at 54.90, target price 60.0, with a 9% upside and a Buy rating [10] - Eni: Current price at 14.26, target price 13.0, with a -9% downside and a Neutral rating [10] - Cenovus Energy: Current price at 14.64, target price 25, with a 71% upside and a Buy rating [10] Market Assumptions - The report outlines macro assumptions for commodity prices, with Brent and WTI prices expected to stabilize in 2025 [7]. - The report also discusses refining margins, indicating a challenging environment for refiners with European margins projected at $5.00 per barrel [7]. Performance Metrics - The report includes performance metrics such as EV/DACF, FCF yield, and P/E ratios for major oil companies, providing a comprehensive view of their financial health and market positioning [10].