Imperial Oil Limited · TSX:IMO
Imperial Oil — Investor Day (March 2022)
76 slides from Imperial Oil's investor day presentation, Mar 10, 2022
Slide 1: Investor Day March 10, 2022
Exhibit 99.1 Investor Day March 10, 2022 Imperial | 2022 | 1
Slide 2: Agenda
Agenda Topic Speaker Time Brad Corson Opening remarks 8:00 Chairman, President and CEO Sherri Evers Environmental/Social/Governance 8:20 VP, Commercial and Corporate Development Simon Younger Upstream outlook 8:50 SVP, Upstream Break 9:30 Jon Wetmore Downstream & Chemical outlook 9:40 VP, Downstream
Slide 3: Opening remarks
Opening remarks Brad Corson Chairman, President and Chief Executive Officer Imperial | 2022 | 3
Slide 4: Reflections on the past year
Reflections on the past year Strong results and substantial progress on strategic priorities § Strong commodity prices, recovering demands î Well-positioned to benefit from recovery coming out of pandemic § Outstanding operational performance î Highest Upstream production on record î Strong Downstre
Slide 5: What you will hear today
What you will hear today Integrated business model drives shareholder value § Focus on optimizing § The power of integration Delivering existing assets Resiliency superior § Continued focus on § Relentless focus on costs through shareholder lowering break-evens and reliability the cycle value § Stre
Slide 6: Macro view
Macro view Global supply challenges and demand recovery support continued commodity price strength § Global oil supply î Underinvestment during past cycle î OPEC+ struggling to meet targets î Public company growth constrained by capital allocation and energy transition priorities î Geopolitics play
Slide 7: Fundamentals drive energy demand growth
Fundamentals drive energy demand growth Further investment required in any scenario § Economies continue to develop and grow î Increasing populations, desire for improved standard of living î Energy supply evolves to meet demand projections § Energy trends vary by sector, geography but demand growin
Slide 8: Sustainability focus
Sustainability focus Canada, and Imperial, should be supplier of choice § Multiple views of future energy requirements highlight oil and gas as being key part of mix § Canada is the most responsible producer in the world î Top ESG ratings amongst world’s largest reserve holders î Leadership in susta
Slide 9: ESG
ESG Sherri Evers Vice-president, Commercial and Corporate Development Imperial | 2022 | 9
Slide 10: Canada – Positioned to lead the energy transition
Canada – Positioned to lead the energy transition Collaborative and innovative policy landscape promotes accelerated energy solutions Progressing policy and incenting emissions reductions Advanced climate policies ü Net-zero ambition ü Expertise in carbon management ü Advanced regulatory systems ü U
Slide 11: Imperial sustainability priorities
Imperial sustainability priorities Advancing responsible energy solutions for a better tomorrow Indigenous reconciliation People Land and water Climate Strengthen collaboration and Cultivate a workplace where Further improve Develop pathways in partnerships with Indigenous everyone feels included, e
Slide 12: Accelerating our progress on ESG
Accelerating our progress on ESG Significant strides made over the last year New goal to reduce emissions intensity at oil sands operations Co-processing Accelerated pilot at Sarnia silver-level and Nanticoke Highest 2 PAR Working to annual Strathcona certification enhance Indigenous renewable Renew
Slide 13: Risk management assessment and mitigation
Risk management assessment and mitigation Robust governance and committed leadership Integration of ESG in pursuit of superior shareholder value Risk management oversight § Management committee leads integrated ESG strategy Imperial Board of Directors § Climate council established to accelerate emis
Slide 14: Indigenous reconciliation journey
Indigenous reconciliation journey Striving to create lasting relationships and shared prosperity § Committed to creating a safe space for our employees to learn, engage and better understand § Executive-led Indigenous recruitment and retention working group § Demonstrating commitment through busines
Slide 15: Our climate strategy
Our climate strategy Leveraging our expertise, integration and technologies Imperial | 2022 | 15
Slide 16: Advancing carbon solutions
Advancing carbon solutions Innovating for a lower-carbon future î Oil Sands Pathways î SA-SAGD î Boiler flue gasî Advanced fuels and lubricants î Autonomous haul systemî Biofuel blending to Net Zero Short term î Emission reduction solutions î LASERî Co-processing î Supporting renewable powerî Renewa
Slide 17: GHGi reductions in operated oil sands
GHGi reductions in operated oil sands Driving emissions improvements through short, medium and long-term goals Achieved reduction in operated oil § Our long term goal is to achieve net-zero emissions in operated sands GHGi by oil sands by 2050 through collaboration with governments and other partner
Slide 18: Carbon capture and storage
Carbon capture and storage Pathways alliance critical enabler for a lower-carbon future Fort McMurray § Progressing Oils Sands Pathways to Net Zero alliance to support emission reduction Transportation line § One of few proven technologies to help decarbonize Cold energy-intensive industries Lake Jo
Slide 19: New energy solutions
New energy solutions Keeping our communities and customers moving Canadian market demand growth § Helping our customers reduce their GHG Indexed versus 2017, % emissions by working together on solutions Biofuels 200 § Demand for lower-emission fuels expected to grow rapidly 150 § Producing advanced
Slide 20: Energy solution delivers real value to shareholders
Energy solution delivers real value to shareholders Growing our business with renewable diesel Helping our customers Clean Fuel Regulation competitive reduce their GHG emissions compliance opportunity î Potential to reduce emissions by 3MT annuallyî Strategic project leverages existing facility for
Slide 21: Continuing our progress
Continuing our progress Solutions in support of a lower carbon future 2022 Expand deployment New product Anticipated first Potential initiation Evaluating potential of boiler flue gas offerings including deployment of of first phase of to leverage low- evaluation of SA-SAGD at carbon capture carbon
Slide 22: Upstream Outlook
Upstream Outlook Simon Younger Senior vice-president, Upstream Imperial | 2022 | 22
Slide 23: Upstream strategy
Upstream strategy Best-in-class producer, maximizing cash flow, positioning for a lower carbon future § Maximize value from long-life, low-decline assets § Targeting industry-leading unit cost and reliability § Select, disciplined capital investments § Lowering emissions through profitable investmen
Slide 24: 2021 Upstream performance
2021 Upstream performance Demonstrated strong operational performance and sustained improvements 2021 vs. 2019 § Successfully managed COVID to avoid disruption Production (koebd) 428 +8% § Maintained priority on safe operations 1 Cash cost ($B) 4.7 +5% § Preserved capital discipline and cost focus 1
Slide 25: Long-life, low-decline asset base
Long-life, low-decline asset base High-quality stable production base; focused on GHG-advantaged growth Production koebd 500 400 § ~4.3 billion boe of proved and probable reserves î Multi-decade production profile 300 î Low sustaining capital § 425 – 440 koebd production outlook for 2022 200 § 20% l
Slide 26: Upstream cash flow outlook
Upstream cash flow outlook Delivering value and strengthening cash flow from operating activities Average annual cash from operating activities at $US 60 WTI $B 4 § Cash flow outlook strengthened vs prior outlook by 15% (ex. market factors) î Progressing cost improvements – 9% reduction î Increased
Slide 27: Upstream investment outlook
Upstream investment outlook Investing for value through select volume growth and GHG intensity reduction 1 Average annual capital expenditures § Capital plan reduced from prior outlook $B § Sustaining capital moderates from 2022 î 5-year average of ~$5 per barrel § Key sustaining projects include: 1
Slide 28: Industry-leading digital approach
Industry-leading digital approach Accelerating value with a rapidly growing digital portfolio >$1B/yr Digital investment principles • Capital-efficient • Fast payback • Agile development Near-term focus and wins Future potential § >30 successful initiatives $750M/yr § Optimizing production § Improvi
Slide 29: Advanced analytics and work process optimization
Advanced analytics and work process optimization Converting data to dollars Enhanced mine planning Well downtime tracker Surveillance and failure analysis (10-15 kbd) (~1 kbd ) (>$40M/yr) Kearl Recovery Heat Map Integrating field work processes to Leveraging minimize analytics in Grade % well downti
Slide 30: Kearl 2021 performance
Kearl 2021 performance Demonstrated strength of Kearl asset Production kbd § Record production in 2021 250 î Exceeded prior record by 40 kbd î Realized full benefit of supplemental crushers (+24 kbd) î Achieved turnaround interval extension (+7 kbd) 200 2020 Supplemental Turnaround Grade & 2021 Crus
Slide 31: Kearl journey
Kearl journey Stable, reliable operations enabling acceleration of optimization phase kbd $US/bbl 300 40 § Targeting 280 kbd in 2024, earlier than prior outlook î Accelerated turnaround strategy î Debottlenecking, reliability, and maintenance improvements 200 î Enhanced mine planning and improved re
Slide 32: Technology in support of Kearl volume growth
Technology in support of Kearl volume growth Reliability and secondary recovery initiatives Advanced wear materials Coarse tailings bitumen recovery Flotation tailings bitumen recovery Hydrotransport Primary Separation Cell (PSC) Ore Screen Flotation Tailings Column Cells To Fines Treatment Coarse S
Slide 33: Autonomous haul update
Autonomous haul update Fleet conversion improving profitability and safety § On track to convert 55 trucks (~70%) by end of Q3 § Record AHS movement in 2021 î Tripled vs. 2020, >30% total material 1 § Unit cash cost savings ~$US 1/bbl § Autonomous platform enabling optimization across broader mine m
Slide 34: Kearl boiler flue gas emissions reduction technology
Kearl boiler flue gas emissions reduction technology Successful first deployment, expanding to five additional boilers § Innovative technology recovers waste heat from the boiler’s exhaust to pre-heat process water Cold Warm Process Process Water Water § Successful startup of first unit May 2021 wit
Slide 35: Cold Lake 2021 performance
Cold Lake 2021 performance Performance exceeding expectations and sustainable into the future Production performance kbd § Increased production 8 kbd vs. 2020 150 î Water balance strategy and equipment reliability (~5 kbd) î Infill drilling and optimization (~3 kbd) î Strongest reliability in past 5
Slide 36: Cold Lake strategy
Cold Lake strategy Maximize asset value and cash flow through transformational GHG strategy Transition to lower emission technology § Strategy to sustain volumes through resilient kbd Lower emissions production Base Base infills investments, delivering competitive returns and 200 GHG transformation
Slide 37: Key Cold Lake volume sustainment investments
Key Cold Lake volume sustainment investments Progressing capital-efficient projects to sustain strong production performance Niche rig drilling program Leming field redevelopment § Successful first deployment, >20 redrills and sidetracks to date§ SAGD technology to redevelop low-recovery, high-quali
Slide 38: Strategy underpinned by advanced in situ technologies
Strategy underpinned by advanced in situ technologies Research and development supporting long term profitable GHG reduction Non-Condensable Gas, NCG Cyclic Solvent Process, CSP Enhanced Late-Life Process, ELP § Non-thermal late life process § Reduce water use and GHGi by ~25% § Non–thermal cyclic p
Slide 39: Cold Lake carbon capture and storage (CCS) opportunity
Cold Lake carbon capture and storage (CCS) opportunity Efficient emissions reduction, supporting Cold Lake strategy transformation Mahihkan Plant at Cold LakeLake § Pursuing CCS emissions reduction opportunity that captures efficiencies with Cold Lake operations § Evaluating capture of CO from combi
Slide 40: Syncrude strategy
Syncrude strategy Capturing value of transition to owner-operator model Production kbd § Successful partner engagement and collaboration delivered transformational step in asset strategy 90 î Transitioned from Syncrude to Suncor as operator 2021 § Synergies of $300M gross through regional efficienci
Slide 41: Future resource optionality
Future resource optionality Portfolio of growth opportunities with net-zero potential Aspen – rendering of central plant In situ GHG intensity t CO e/m3 2 0.5 § Large inventory of in situ opportunities î Aspen, Corner, Clarke Creek, Clyden § Strategic approach to future development î Maintain option
Slide 42: Upstream summary
Upstream summary Best-in-class producer, maximizing value, positioning for a lower carbon future § Maximizing value from existing assets § Sustaining efficiencies; targeting industry leading unit cost and reliability § Investing for value through select volume growth and GHG intensity reduction § In
Slide 43: Break
Break Imperial | 2022 | 43
Slide 44: Downstream and Chemical Outlook
Downstream and Chemical Outlook Jon Wetmore Vice-president, Downstream Imperial | 2022 | 44
Slide 45: Downstream and Chemical strategy
Downstream and Chemical strategy Increasing profitability across the value chain § Deliver industry leading performance in safety, reliability, and operations integrity § Strategically invest in logistics to expand market reach, reduce costs and improve supply reliability § Enhance world-class Esso
Slide 46: Canadian margin environment
Canadian margin environment Structurally advantaged margins, resilient through the pandemic Average monthly gasoline crack Average monthly diesel crack $US/bbl $US/bbl 80 80 Avg. Canadian diesel crack Avg. Canadian gasoline crack Avg. US gasoline crack Avg. US diesel crack 40 40 0 0 2010 2011 2012 2
Slide 47: Canadian fuel demand update
Canadian fuel demand update Demand continuing to recover Canadian industry demand (~% of normal*) § Canadian economic activity increasing § Omicron impacting near-term, potential for continued volatility § Gasoline, diesel demand expected to recover to 90 - 95% 90 - 95% 70 - 75% pre-COVID levels Q4
Slide 48: Canadian refining
Canadian refining Canada’s largest refiner with access to global technology and expertise Refinery throughput and utilization kbd § Structurally advantaged refining business 400 100% î Largest domestic refiner, strategically located assets î Fully integrated Chemical plant for optimized molecule upl
Slide 49: Fuel, lubricant and asphalt marketing
Fuel, lubricant and asphalt marketing Industry leading brands and product offering creates customer pull § Retail branded wholesale model provides structural advantages î Industry leading site count with ~2,400 sites across Canada î Capital efficient growth î Strategic partnerships with best-in-clas
Slide 50: Developing a lower-carbon product offering
Developing a lower-carbon product offering Broad portfolio of products helping customers meet their sustainability goals § 75% of existing gasoline and diesel sales contain renewable content î Continuing to grow blending and distribution capability § Growing portfolio of advanced fuels that improve
Slide 51: Innovation delivers shareholder value
Innovation delivers shareholder value Further enhancing Imperial’s Downstream offer with innovative solutions and technologies Advanced recycling Vegetable oil co-processing Collaborative product trials Battery energy storage î Transforming plastic waste into î Vegetable oil co-processed with î Iden
Slide 52: Downstream investments
Downstream investments Strategic investments in low-capital, high-return business 1 Annual capital expenditure forecast $M 600 § Selective investing in refinery slate, production efficiency and resiliency 300 § Support and enhance strategic logistics 0 î Market opportunities, access, reliability 202
Slide 53: Sarnia products pipeline (SPPL) update
Sarnia products pipeline (SPPL) update Proactive investment in efficient and reliable logistics § Project details: î ~$470M final investment, ~$400M spent through year-end 2021 î 63 km pipeline, restores capacity into key Toronto market î On track to be in service 2Q22 § SPPL creates structural valu
Slide 54: Strathcona renewable diesel project update
Strathcona renewable diesel project update Building Canada’s largest renewable diesel (RD) facility § Grassroots facility î ~$500M capital investment, globally competitive scale î Total investment, including 3P capital investments, exceeds $1B î 20 kbd of premium RD from locally grown feedstocks and
Slide 55: Strathcona renewable diesel value proposition
Strathcona renewable diesel value proposition Capturing competitive value for shareholders § Canadian Clean Fuel Regulations supporting low-carbon investments î RD is an efficient pathway for hard to decarbonize sectors î Canadian RD currently supplied by costly long-haul imports î Grassroots assets
Slide 56: Downstream profitability
Downstream profitability Resilient business model, focused on increasing profitability 1 Cash operating costs and refinery throughput $B kbd 3 400 § Resilient, reliable performance across the cycle 2 § Fully integrated, flexible business model 300 1 § Further structural cost reductions achieved in 2
Slide 57: Chemical site integration advantage
Chemical site integration advantage Advantaged location and integration, positioned to compete in a high-growth market Annual net income Feedstock HDPE injection molding price history % $M US ¢/lb 100 450 Other Other 120 Marcellus Mid-west Marcellus ethane 300 Ethane ethane 90 50 150 60 Refinery Ref
Slide 58: Imperial Chemical produces high-value products
Imperial Chemical produces high-value products Meeting customer demands with consistent, high-quality, differentiated products Product trials Customer-focused product development $M NPV 50 § High-density polyethylene (HDPE) for rotational and injection molding applications 25 § End product uses are
Slide 59: Imperial's Downstream and Chemical advantage
Imperial’s Downstream and Chemical advantage Sustainably advantaged assets, brands and products § Canadian domestic fuel markets benefit from advantaged margins § Strategically located, highly-integrated assets with low sustaining capital requirements § Portfolio of superior brands and products fost
Slide 60: Financial Outlook
Financial Outlook Dan Lyons Chief Financial Officer Imperial | 2022 | 60
Slide 61: Advantaged financial profile
Advantaged financial profile Resilient business model with upside leverage 10-year cash flow from operating activities § Integrated, balanced business model î Growing production, long-life low decline assets î Advantaged downstream, leading fuels marketer Downstream, î Integrated chemical business U
Slide 62: Record-setting performance in 2021
Record-setting performance in 2021 Delivered continued cash flow growth Annual cash flow from operating activities § Strong integrated performance across all business lines $B 6 î Record cash flow from operating activities î Record Upstream production î Record Chemical earnings î Continued Downstrea
Slide 63: Cash operating costs
Cash operating costs Significant cost efficiencies achieved and maintained 1 Annual cash operating costs § Sustainable cost reductions across all business lines $B î Over $1B in cost efficiencies 8 § Progressing additional cost reduction opportunities î Continued focus on energy efficiency § Cost-ef
Slide 64: Capital expenditure forecast
Capital expenditure forecast Low sustaining capital requirement with select growth opportunities 1 Annual capital expenditure forecast § 2022 target of $1.4B, down $0.2B from previous plan $B 2 2 § Sustaining capital averages ~$1B over period î Predominantly Upstream î Kearl in-pit tailings drives h
Slide 65: Re-affirming capital allocation priorities
Re-affirming capital allocation priorities Remain committed to returning surplus cash to shareholders Dividend per share (paid basis) $ § Reliable and growing dividend 1.50 î Dividend increased by 55% since beginning of 2021 § Low sustaining capital requirements 0.75 § Select, high-return capital-ef
Slide 66: Record cash returned to shareholders in 2021
Record cash returned to shareholders in 2021 Robust free cash flow outlook 1,2 Annual cash distributions Free cash flow profile $B $B 6 6 4 4 2 2 0 0 $50 $60 $70 $80 2016-20 Avg 2021 $US WTI Dividend Buyback Prior outlook 1 Non-GAAP financial measure – see supplemental information for definition and
Slide 67: Corporate guidance summary
Corporate guidance summary 1 2022 Annual Guidance 2022 Turnaround Schedule Total Capex $B 1.4 Upstream (full-year opex and production impacts, before royalties) 1Q/2Q: Syncrude Hydrotreater, 3 kbd, $14M opex Upstream Production kboed 425 - 440 2Q: Kearl K1 plant, 10 kbd, $70M opex (IOL share) Kearl
Slide 68: Closing remarks
Closing remarks Brad Corson Chairman, President and Chief Executive Officer Imperial | 2022 | 68
Slide 69: The Imperial advantage
The Imperial advantage Growing shareholder value Integration and synergies Resilience High-quality, through long-life cycle assets Maximizing shareholder value Industry leading Shareholder balance returns sheet Technology leadership I Imp mperi erial al | | 2 20 02 22 2 | | 69 69
Slide 70: Our winning strategy
Our winning strategy § Disciplined focus on existing assets î Efficiency, reliability, capital efficient investment Discipline and focus î Industry leading cost structure î Driving value in mature, competitive downstream business Share price performance § Progress towards ESG targets in evolving env
Slide 71: Q & A
Q & A Imperial | 2022 | 71
Slide 72: For more information
For more information: Dave Hughes Vice President, Investor Relations +1 587.476.4743 dave.a.hughes@exxonmobil.com imperialoil.ca twitter.com/ImperialOil linkedin.com/company/Imperial-Oil youtube.com/ImperialOil facebook.com/ImperialOilLimited Imperial | 2022 | 72
Slide 73: Cautionary statement
Cautionary statement Statements of future events or conditions in this report, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, s
Slide 74: Cautionary statement
Cautionary statement In these materials, certain natural gas volumes have been converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf to one bbl is based
Slide 75: Supplemental Information
Supplemental Information Debt-to-capital ratio Debt, defined as the sum of “Notes and loans payable” and “Long-term debt”, divided by capital, defined as the sum of debt and “Total shareholders’ equity”. Capital and exploration expenditures Capital and exploration expenditures (or capital expenditur
Slide 76: Supplemental Information
Supplemental Information Cash operating costs (Cash costs) Cash operating costs is a non-GAAP financial measure that consists of total expenses, less costs that are non-cash in nature, including, Purchases of crude oil and products, Federal excise taxes and fuel charge, Depreciation and depletion, N