Imperial Oil Limited · TSX:IMO
Imperial Oil — Investor Day (April 2012)
63 slides from Imperial Oil's investor day presentation, Apr 4, 2012
Slide 1: Investor Day March 2012
Exhibit 99.1 INNOVATION, GROWTH, INTEGRITY InvestorDay March, 2012
Slide 2: Agenda
9:30 am Welcome John Charlton Manager, investor relations Canadian Energy Leadership Bruce March Chairman, president and chief executive officer Doubling Production by 2020 Glenn Scott Senior vice-president, resources Break Technology Leadership Bruce March NA Downstream & Chemicals Bruce March Fina
Slide 3: Cautionary statement
Cautionary statement This presentation contains forward-looking information on future production, project start-ups and future capital spending. Actual results could differ materially due to changes in project schedules, operating performance, demand for oil and gas, commercial negotiations or other
Slide 4: Canadian energy leadership
Esso imperial oil Canadian energy leadersjhip bruce March
Slide 5: Global energy demand will grow
Global energy demand will grow Demand likely to grow approximately 30% by 2040 Energy demand * other includes nuclear, hydro, geothermal, biomass, wind, solar, and biofuels • Pace of demand growth moderated by efficiency gains across the world • Mix gradually shifts with oil and natural gas remainin
Slide 6: Existing oil fields will continue to decline
Existing oil fields will continue to decline Significant new sources of supply will be required * source: International Energy Agency—2010 • By 2035, 2/3rd decline in production from oil fields producing in 2010 (IEA) • Need for new supply from many sources, including oil sands
Slide 7: Canada's oil sands – a world class resource
Canada’s oil sands – a world class resource An exceptional opportunity readily accessible to investors * source: Oil & Gas Journal
Slide 8: Canada – an attractive investment climate
Canada – an attractive investment climate Canada remains an excellent jurisdiction for business Positive attributes • Stable democracy • Resource development encouraged • Private investment welcomed Challenges remain • Regional inflation • Labor availability
Slide 9: Safety leadership
Safety leadership Nobody Gets Hurt Lost time incident rate incidents per 200k hours • Safety is a key indicator of operations excellence • Same rigor applied to environmental performance and security • Results better than industry but 2011 a disappointment
Slide 10: Environmental performance
Environmental performance Best ever Environmental Compliance Incidents performance Environmental compliance incidents • No incidents with public or environmental consequences in 2011
Slide 11: Solid financial performance
Solid financial performance Integrated strength reflected in 2011 results Net income per share (diluted basis) EAT ($ millions) 3,371 EAT ($ per share) 3.95 ROCE (%) 25.4 Gross Production* (koebpd) 297 Cash flow ($ millions) 4,489 Investments ($ millions) 4,066 * before royalties
Slide 12: Industry-leading ROCE
Industry-leading ROCE Focused on extracting maximum value from every asset • IMO competitive advantages 3 Operational excellence 3 Portfolio quality 3 Investment discipline – Technical leadership – Balance sheet strength • 2011 ROCE 60% ex assets “under construction” * source: Bloomberg
Slide 13: Superior shareholder returns
Superior shareholder returns Long term focus delivers high returns to investors • Creating shareholder value through Dividends – Growth – Share buybacks * source: Bloomberg,TMX —annualized returns to December 31, 2011
Slide 14: Added proved reserves
Added proved reserves Organic growth drives proved reserves additions • 2011 reserves are 57% higher than 2001 • 2.2 billion boe reserves added 3 Improved recovery 3 New projects • 1.1 billion boe produced over the last decade * after royalties
Slide 15: Added non-proved resource
Added non-proved Over 150 years of production coverage at current rates • Added 6.5 billion boe of resource in past decade through organic growth – 2011 resource 47% higher than 2001 • Maintained portfolio of new opportunities – Acquired 250k net acres in 2011 in Northwest Territories (shale gas), A
Slide 16: Unique competitive advantage – ExxonMobil
Unique competitive advantage – ExxonMobil Only publicly traded Canadian company with access to leading global expertise • Industry leading technology • Project management expertise • Best practices transfer • Training and development • World scale operations • Strategic alignment 3 New upstream oppo
Slide 17: Proven business model
Proven business model A focus on investment discipline, operational excellence Operational Excellence • Safety and environment • Controls integrity • Project execution • Reliability • Energy efficiency • Product quality
Slide 18: Doubling Upstream Production by 2020
[Graphic Appears Here] Doubling Upstream Production by 2020 Glenn Scott
Slide 19: A premier portfolio
A premier portfolio Development opportunities are weighted to the oil sands * after royalties
Slide 20: Investing in growth opportunities
Investing in growth opportunities Production doubles by 2020 – primarily from liquids * before royalties
Slide 21: Cold Lake – a premier in-situ asset
Cold Lake – a premier in-situ asset Over 1 billion barrels produced; Nabiye expansion sanctioned • Record 160 kbd production in 2011 • New 162 kbd quarterly volume records in 3Q11 and 4Q11 • 40 kbd Nabiye expansion sanctioned • Grand Rapids development being progressed for growth in 2020+ * before r
Slide 22: Cold Lake – operations excellence
Cold Lake – operations excellence Industry-leading reliability performance * source: CanOils
Slide 23: Cold Lake – recovery enhancement
Cold Lake – recovery enhancement Technology sustains and builds in-situ production • Late lifecycle technologies in use – Liquid Addition to Steam for Enhanced Recovery (LASER) – Continuous Infill Steam Flood • New recovery technologies in pilot – Solvent Assisted (SA)-SAGD – Cyclic Solvent Process
Slide 24: Cold Lake realizations
Cold Lake realizations Cold Lake bitumen attracts a premium in the market • Low TAN bitumen • Requires less diluent than some other bitumens • Price floor support from integration with downstream * source: FirstEnergy Capital Corp., Company Disclosures, January 27, 2012
Slide 25: Cold Lake – Nabiye project
Cold Lake – Nabiye project Similar to Mahkeses and a continuation of “design one build many” concept Similar to Mahkeses and a continuation of “design one build many” concept • 40 kbd production • Facilities 3 140 kbd steam generation 3 170 MW cogeneration 3 7 pads of 24 wells each • Initial regulat
Slide 26: Cold Lake – future development
Cold Lake – future development Grand Rapids – an untapped Cold Lake formation • Cold Lake 100% IOL • SAGD resource in Grand Rapids formation (current production from deeper Clearwater zone) 3 SA-SAGD potential • Preliminary development plan 3 35 kbd SAGD facilities/phase 3 Further resource delineati
Slide 27: Kearl — main plant site
Kearl — main plant site River water intake er] External tailings area =~ Froth treatment = North/South | ; ae s ) tank farm Maintenance services 7
Slide 28: Kearl – mining & ore preparation
Kearl – mining & ore preparation
Slide 29: Kearl development plan
Kearl development plan On target to reach 345 kbd by about 2020 • 71% IOL, 29% ExxonMobil • Initial development sanctioned May 2009 3 110 kbd initially 3 Startup 4Q12 • Expansion project sanctioned Dec 2011 110 kbd initially 3 Startup 4Q15 • Full capacity achieved by 2020 after Mine train added 3 Pr
Slide 30: Kearl – a lasting unit cost advantage
Kearl – a lasting unit cost advantage One of the best undeveloped mining resources * source: Wood MacKenzie 2010 oil price
Slide 31: Kearl reliability
Kearl reliability Pre-investment to enhance system availability • Design and operability enhancements 3 Dual hydro-transport lines with peak 60 percent utilization each 3 Increased flow assurance reliability with enhanced heat tracing 3 Facility enhancements to mitigate grid power outage and re-star
Slide 32: Aspen – the next development after Kearl
Aspen – the next development after Kearl Project overview • 52 section lease 3 35 km south of Kearl • 100% Imperial Oil • High quality SAGD resource 3 SA-SAGD potential • Development plan: 3 80 kbd phased 3 End of decade production
Slide 33: Syncrude – many areas targeted for improvement
Syncrude – many areas targeted for improvement Building a foundation based on Global Managing Systems & Best Practices
Slide 34: Syncrude – many areas targeted for improvement
Syncrude – many areas targeted for improvement Improving reliability is a long term commitment
Slide 35: B.C. – unconventional shale gas
B.C. – unconventional shale gas Horn River, British Columbia 340,000 net acres with ExxonMobil • Pilot field work underway • Objective: full field business case 3 Demonstrate well productivity 3 Provide cost confidence 3 Assess well spacing • Scope 3 Central pad, 8 multi-frac wells 3 Pipeline to thi
Slide 36: Break
[Graphic Appears Here] BREAK
Slide 37: Technology Leadership
Technology Leadership Bruce March
Slide 38: Oil sands – technical leadership
Oil sands – technical leadership Over half a century of innovation and unmatched research capability • Imperial Oil and ExxonMobil – Over $1B of research annually – More than 2,000 work-years of heavy oil research – Invented and patented the two most commercially successful heavy oil in-situ recover
Slide 39: Oil sands – technical leadership
Oil sands – technical leadership 50+ years of innovation and unmatched research capability [Graphic Appears Here] • Operational in 2010 [Graphic Appears Here] • Operational in 2013
Slide 40: Oil sands – technical leadership
Oil sands – technical leadership 50+ years of innovation and unmatched research capability
Slide 41: Oil sands – technical leadership
Oil sands – technical leadership 50+ years of innovation and unmatched research capability
Slide 42: Oil sands – technical leadership
Oil sands – technical leadership 50+ years of innovation and unmatched research capability
Slide 43: Tailings technologies
Tailings technologies Tailings technology comparison of alternatives
Slide 44: COSIA
COSIA An industry group formed to improve oil sands environmental performance • 12 oil sands producers working together on environmental issues – Tailings, water, land, and greenhouse gas emissions – Accelerate the pace and scope of environmental innovation • Build on the successes achieved by earli
Slide 45: North American Downstream & Chemicals Businesses
[Graphic Appears Here] North American Downstream & Chemicals Businesses Bruce March
Slide 46: North American shale gas
North American shale gas Upstream developments are driving downstream & chemical opportunities • Natural gas prices to remain low – Arbitrage opportunities for LNG, NGVs • Ethane supply growth 3 Advantaged feedstock for ethylene producers
Slide 47: North American tight oil
North American tight oil Upstream developments are driving downstream opportunities • Growing supply of mid-continent tight oil – Volatile WTI-Brent differentials – High utilization of complex refining but not deep resid conversion – Supports export of gasoline and diesel • With pipelines, Canadian
Slide 48: Kearl transportation
Kearl transportation Upstream / downstream integration provides value uplift for Kearl • Research support to determine Kearl refining parameters • Plan to sell KID* volumes to equity refineries and 3rd parties • Current pipeline network can handle KID volumes • Additional takeaway capacity required
Slide 49: Financial Performance & Discipline
Financial Performance & Discipline Paul Masschelin
Slide 50: Solid financial performance
Solid financial performance Integrated strength reflected in 2011 results Net income per share (diluted basis) $/share EAT ($ millions) 3,371 EAT ($ per share) 3.95 ROCE (%) 25.4 Gross Production* (koebpd) 297 Cash flow ($ millions) 4,489 Investments ($ millions) 4,066 * before royalties
Slide 51: Upstream business results
Upstream business results Operational excellence in base business while advancing future growth EAT ($ millions) 2,457 ROCE (%) 22 Gross Production* (koebpd) 297 Liquids Production* (kbd) 255 Oil sands production* (kbd) 232 Investments ($ millions) 3,880 Strategy: double production by 2020 * before
Slide 52: Downstream business results
Downstream business results Strong results in a challenging market EAT ($ millions) 884 ROCE (%) 29 Refinery throughput (kbd) 430 Net petroleum product sales (kbd) 447 Investments ($ millions) 166 Strategy: leverage existing asset base, generate cash
Slide 53: Chemical business results
Chemical business results Anchored by a world class polyethylene plant with advantaged feedstock EAT ($ millions) 122 ROCE (%) 59 Petrochemical sales (kT) 1,016 Strategy: optimize feedstock advantage (e.g. refinery & Marcellus ethane supply)
Slide 54: Operations excellence – operating costs
Operations excellence – operating costs Cold Lake continues to have very competitive operating costs SAGD & CSS Operating Costs* C$/bbl • > 25 years of commercial operation and >1B bbls produced • Costs remain competitive with technology advances * source: FirstEnergy Capital Corp., Company Disclosu
Slide 55: Significant operating events
significant operating events Higher than average maintenance planned for the 2nd quarter of 2012 Syncrude 3 Coker 8-3 Strathcona refinery 3 FCC*/Alkylation; 40 days Sarnia refinery 3 FCC*; 50 days Cold Lake 3 Mahkeses Cogen * Fluidized-bed Catalytic Cracker
Slide 56: Uninterrupted dividends since 1891
Uninterrupted dividends since 1891 Per share dividend payments have increased every year for last 17 years Annual paid dividends per share* $/share $5.7 billion returned to shareholders • Dividends per share have increased 50% since 2006 * payments during calendar year from 1995-2011 adjusted for 3:
Slide 57: Financial strength enables growth
Financial strength enables growth Spending plans of $35 – 40 billion this decade on upstream growth Capital and exploration expense $ billions • AAA balance sheet supports – Business cycle resilience – Pursuit of opportunities
Slide 58: A history of share buybacks
A history of share buybacks 51% of shares bought back from 1995 to 2009 Shares Outstanding* billions $15.5 billion returned to shareholders * shares outstanding as of Dec. 31 and adjusted for 3:1 share splits in 1998 and 2006
Slide 59: Sustained financial discipline
Sustained financial discipline Balance sheet remains strong throughout growth cycle Debt to capital %
Slide 60: The Competitive Advantage
The Competitive Advantage Bruce March
Slide 61: Imperial Oil – the competitive advantage
Imperial Oil – the competitive advantage An investor in Imperial acquires an unmatched set of qualities • Track record maximizing shareholder value • Premier portfolio of assets • High growth trajectory 3 Double production by 2020 • Technology leader & superior operator • Exemplary financial strengt
Slide 62: For more information
For more information www.imperialoil.ca For more detailed investor information, or to receive annual and interim reports, please contact: John A. Charlton Manager, Investor Relations Imperial Oil Limited 237 Fourth Avenue SW Calgary, Alberta T2P 3M9 Email: john.a.charlton@esso.ca Phone: (403) 237-45
Slide 63: Imperial Oil Esso
Imperial Oil Esso