Imperial Oil Limited · TSX:IMO
Imperial Oil — Investor Day (April 2014)
81 slides from Imperial Oil's investor day presentation, Apr 14, 2014
Slide 1: Investor Days April 1-2, 2014
Exhibit 99.1 Investor Days April 1—2 , 2014
Slide 2: Agenda
Agenda 9:30 a.m. Welcome John Charlton, Manager, Investor Relations Executive Summary Global Energy Outlook Rich Kruger, Chairman, President and CEO Corporate Overview Downstream & Chemical Paul Masschelin, Senior Vice-President, Finance BREAK (10 minutes) Upstream Rich Kruger Future Opportunities P
Slide 3: Cautionary statement
Cautionary statement Statements of future events or conditions in these materials, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Actual future results, including demand growth and energy source mix; production growth and mix; project plan
Slide 4: Executive summary
Executive summary | Imperial | Investor Days | 2014
Slide 5: Business overview
Business overview Participation in all aspects of the value chain Sarnia refinery Syncrude Kearl mining mining Strathcona refinery Cold Lake cyclic steam Nanticoke refinery Research Sarnia Fuels & Lubes marketing chemicals | Imperial | Investor Days | 2014
Slide 6: Competitive assessment
Competitive assessment Industry leadership across all business lines Cold Lake Best-in-class operating performance; continued growth potential Syncrude High-value production; improvement actions ongoing Kearl Next generation mining technologies; ramp-up to capacity continuing Refining Advantaged fee
Slide 7: Business environment
Business environment Favourable investment climate, but not without challenges • Large, accessible upstream resources • Mature, competitive downstream markets • Political stability, competitive fiscal regime • Market access limitations, uncertainties • Tight labour market, regional cost pressures •
Slide 8: Organizational priorities
Organizational priorities Manage risks, maximize value and achieve profitable growth • Focus on base business fundamentals Safety…Operational Integrity…Reliability…Profitability • Implement asset-specific improvement plans • Ensure quality execution on growth projects • Engage externally on key indu
Slide 9: Global energy outlook
Global energy outlook
Slide 10: A worldwide view to 2040
A worldwide view to 2040 billion more people on the planet 130 percent larger global economy about 35 percent greater demand for energy non-OECD countries lead the growth in demand about 60 percent of demand supplied by oil and natural gas natural gas to surpass coal as the second-largest fuel sourc
Slide 11: Demand for all energy sources to increase
Demand for all energy sources to increase Global energy demand Quadrillion BTUs 2040 2010 Oil Gas Coal Nuclear Other Source: ExxonMobil 2014 Outlook for Energy; other includes biomass/waste, hydro and other renewables
Slide 12: Oil sands production to continue to grow
Oil sands production to continue to grow North American liquids mbd Demand Canadian Oil Sands Net Imports Biofuels Other Petroleum Crude & Condensate Source: ExxonMobil 2014 Outlook for Energy
Slide 13: Corporate overview
Corporate overview
Slide 14: Business model
Business model Deliver superior, long-term shareholder value Long-life, competitively advantaged assets Disciplined investment and cost management Integration and synergies High-impact technologies and innovation Operational excellence and responsible growth ExxonMobil relationship
Slide 15: Imperial-ExxonMobil relationship
Imperial—ExxonMobil relationship competitive advantage nefits to Imperial Personnel development Operational best practices Technology sharing Scale-related synergies ercial transactions On terms competitive to those with unrelated parties cision making Five of seven board members are independent
Slide 16: Enterprise risk management
Enterprise risk management Comprehensive systems to manage business risks
Slide 17: Personnel safety
Personnel safety Safety is first in all we do Workforce safety Incidents per 200,000 hours worked Goal “Nobody Gets Hurt” 0.5 Industry Imperial
Slide 18: Financial performance
Financial performance Results demonstrate the strength of our business model Net income $/share 2013 Downstream & Other Earnings—$ billions 2.8 Upstream Earnings—$ per share1 3.32 ROCE—% 12.9 3 Gross production2—koebd 295 Refining throughput—kbd 426 Cash flow—$ billions 3.3 1 Investments—$ billions
Slide 19: Business segment profitability
Business segment profitability High performing upstream and downstream businesses 2013 Upstream profitability 2013 Downstream profitability $/oeb $/bbl 20 20 15 15 10 10 0 0 IMO SU CVE HSE SU IMO CVE HSE Source: Barclays Research
Slide 20: Industry-leading return on capital employed
Industry-leading return on capital employed Maximizing investment value and life-cycle performance 2013 5-year average % % 20 20 15 15 10 10 0 0 IMO SU HSE CNQ CVE IMO CVE HSE CNQ SU Source: company publications
Slide 21: Unmatched shareholder distributions
Unmatched shareholder distributions $13 billion returned to shareholders in last 10 years 2004-2013 Distributions $ billions Share reductions 10 Dividends 5 IMO HSE SU CNQ CVE
Slide 22: Long-life, high-quality proved reserves
Long-life, high-quality proved reserves 3.6 billion oil-equivalent barrels, concentrated in world-class assets YE 2013 proved reserves billion oeb1 Other Syncrude Cold Lake Kearl Year-end 2012 1after royalties
Slide 23: Large resource base
Large resource base 18 billion oil-equivalent barrels, up 10% in 2013 YE 2013 resource base billion oeb1 Other Gas 15 Growth Contingent opportunities Resource Mining Liquids Progressing Probable In situ Proved Committed 2 3 4 1after royalties
Slide 24: Significant growth investments
Significant growth investments Spending $40+ billion this decade concentrated on upstream projects Average annual capex $ billions 5 4 3 2 1 2000-2009 2010-2014 2015-2020 Includes Upstream, Downstream, Chemical & Corporate
Slide 25: Production positioned to double
Production positioned to double 200 kbd of additional liquids capacity in funded projects Production outlook koebd1 New Opportunities Not yet Oil Sands—mining funded Oil Sands—in situ 400 Conventional Under construction Ramping up Existing 2013 2016 2020+ 1before royalties
Slide 26: Large cap growth comparison
Large cap growth comparison “We estimate Imperial will exhibit the strongest per share growth in the peer group over the next several years, driven in large part by its expansions at Kearl.”—Peters & Co. Estimated cash flow per share growth—% 20 IMO 15 CNQ HSE Median: 7% SU CVE -5 Median: 12% 0 5 10
Slide 27: Downstream & Chemical overview
Downstream & Chemical overview
Slide 28: Integration & synergies
Integration & synergies Delivering competitive advantage across the full value chain Production Refining Chemical Crude oil and natural gas Petroleum products Commodities and specialties
Slide 29: Downstream & Chemical strategies
Downstream & Chemical strategies Maximizing the value of every molecule Consistently deliver best-in-class performance Provide valued and high-quality products and services Lead industry in operating efficiency and effectiveness Selectively invest for advantaged returns
Slide 30: Refining & Chemical
Refining & Chemical Canada’s largest refiner, integrated chemical facility Strathcona, Sarnia, Nanticoke Capacity: 421 kbd Sarnia Chemicals 2013 sales: 940 KT Efficient, well-positioned assets Integrated, advantaged feedstocks Leveraging global best practices
Slide 31: Strong cash flow with selective investments
Strong cash flow with selective investments More than $6 billion of net cash generated over the last 5 years Downstream & Chemical net cash Downstream & Chemical capex $ billions % of depreciation 150 2 100 1 50 0 0 2009 2010 2011 2012 2013 2004-2008 2009-2013
Slide 32: Maximizing refining value
Maximizing refining value Lowering costs through advantaged feeds and energy efficiencies Mid-continent crude Indexed energy intensity % of throughput % 100 100 Industry Imperial 75 95 50 90 25 85 0 80 2010 2012 2014 2002 2012 Source: Solomon data, indexed
Slide 33: Leveraging ExxonMobil global best practices
Leveraging ExxonMobil global best practices Unique technical, operational and commercial support networks Systematic approach to achieve operational excellence: Personnel safety Energy efficiency Facility reliability Manufacturing optimization Strathcona Nanticoke Sarnia Chemical
Slide 34: Strong Chemical performance
Strong Chemical performance Top-tier polyethylene producer, low-cost feedstock, specialty customers Feedstock Indexed volume & unit margin % % Cost 200 Ethane High Margin Propane 150 Volume Marcellus ethane Ethane 50 100 Refinery Refinery off gas off gas 50 Low 0 0 2009-2013 2014+ 2009 2010 2011 201
Slide 35: Fuels & Lubricants marketing
Fuels & Lubricants marketing World-class brands, extensive distribution system 1,700 sites; 470 company-owned Marketing brands: 2013 sales: 454 kbd Concentrated in premium markets High capability distributor network Profitable partnerships
Slide 36: Marketing excellence
Marketing excellence Leading market share in all product segments Market Market share position Wholesale fuels 24% #1 Retail1 18% #2 Aviation 35% #1 Marine 30% #1 Asphalt 35% #1 Lubricants 27% #1 1Source: Q4 2013 Kent Market Share All others estimated based on Statistics Canada data and company info
Slide 37: Retail value proposition
Retail value proposition Profitably fulfilling customer needs, industry-leading performance Retail margin Esso rank Retail measure vs. industry Site contribution #1 Non-fuel margin #1 Non-fuel Net site cash cost #1 Fuel Non-fuel Fuel Source: 2012 MJErvin Benchmarking. Participants: Imperial, Chevron
Slide 38: Be Imperial
Be Imperial
Slide 39: Upstream overview
Upstream overview
Slide 40: Upstream strategies
Upstream strategies Operational excellence and profitable growth • Maximize value of existing production • Invest in projects that deliver superior results • Enhance resource value through high-impact technologies • Pursue the highest quality exploration opportunities
Slide 41: Cold Lake: a world-class in situ operation
Cold Lake: a world-class in situ operation Industry-leading performance, further growth potential 100% Imperial, 1st production in 1985 4,500 wells, 150 kbd1 production 1.7B bbls 2P, 3.3B bbls contingent1 Large, high quality resource base Highly efficient operation Significant long-term growth poten
Slide 42: Industry-leading reliability
Industry-leading reliability Achieved through comprehensive, systematic approach 2013 reliability % of capacity IMO Cold Lake CVE Foster Creek CVE Christina Lake SU Firebag CNQ Primrose HSE Tucker Lake 0 20 40 60 80 100 Source: Peters & Co. Limited
Slide 43: Competitive cost structure
Competitive cost structure Achieved through operational integrity, life-cycle cost discipline 2013 cash operating costs $/bbl HSE Tucker CVE Foster Creek SU Thermal IMO Cold Lake CVE Christina Lake CNQ Thermal 0 5 10 15 20 25 Source: FirstEnergy Capital Corp.
Slide 44: Increasing resource recovery
Increasing resource recovery Achieved through technology, innovation and operational best practices Cold Lake demonstrated recovery % 2010+ 2000’s 1990’s 1980’s 20 1970’s Thermal Pilots Commercialization Megarow Limited entry Liquid addition First horizontal of cyclic steam steaming perforations to
Slide 45: Nabiye project status
Nabiye project status Target start-up remains year-end 2014 • Funded in 2012 for $2 billion - 280 million bbls, 40 kbd production1 - 7 pads of 24 wells each - 140 kbd steam generation - 170 MW cogeneration • “Design one, build multiple” replicates Mahkeses
Slide 46: Cold Lake production forecast
Cold Lake production forecast Long-life plateau, significant growth potential kbd1 300 200 100 2013 2018 2023 2028 2033 1before royalties
Slide 47: Syncrude: a pioneer in oil sands mining
Syncrude: a pioneer in oil sands mining Strategic asset with improvement potential 25% Imperial, 1st production in 1978 Synthetic crude, 70 kbd production1 1.2B bbls 2P, 1.6B bbls contingent1 High-value production Competitive performance Intense improvement focus 1 IMO share, before royalties
Slide 48: Competitive performance
Competitive performance Targeted efforts to improve 3-year average capacity utilization % 100 80 60 40 20 Shell Syncrude Suncor CNRL Capacity 255 kbd 350 kbd 350 kbd 115 kbd Source: FirstEnergy Capital Corp.
Slide 49: Focused on increasing production
Focused on increasing production Priority is to improve reliability of existing facilities Syncrude production kbd1 Operating procedures Equipment monitoring 40 • Facility maintenance 20 • Coker feed stability Sustaining projects 2009-2013 2017 2020 Average 1IMO share
Slide 50: Executing sustaining projects
Executing sustaining projects Projects being delivered on schedule, on budget Average capex per year $ millions1 Aurora North Mine Relocation Aurora North Tailings Management $0.9 billion2 | Complete $0.8 billion2 | Complete 300 200 100 2006-2010 2011-2015 2016-2020 Mildred Lake Mine Replacement Cen
Slide 51: Driving organizational effectiveness
Driving organizational effectiveness Delivering cost reductions, building capabilities Syncrude workforce employees 6000 Strengthening leadership structure Enhancing asset team accountability 5000 Increasing workforce training Expanding best practice networks Leveraging IMO/XOM support 4000 2010 201
Slide 52: Kearl: the next generation oil sands mine
Kearl: the next generation oil sands mine Establishing new performance standards 71% Imperial, 2013 initial start-up 220 kbd gross funded capacity1 3.6B bbls 2P, 1.0B bbls contingent1 Large, high-quality resource Proprietary froth treatment Environmental improvements Competitive cost structure 1Gros
Slide 53: Initial development update
Initial development update All three trains operational, ramping up to capacity Kearl bitumen production kbd, gross1 80 60 40 20 2Q13 3Q13 4Q13 1Q14 Est. 1100%, before royalties
Slide 54: Kearl production successfully marketed
Kearl production successfully marketed 19 refineries have processed to-date First processed in Imperial and ExxonMobil refineries Sales to third parties began in 4Q13 No operational issues Market demand continues to be strong
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Slide 56: High resource quality
High resource quality A life-cycle unit cost advantage Athabasca undeveloped mining resources ore grade, % bitumen Increasing Mining 12.0 Efficiency Kearl 11.5 11.0 Increasing Processing Efficiency 10.5 10.0 9.5 12 11 10 9 8 7 Source: Regulatory applications Total volume to bitumen in place ratio
Slide 57: Proprietary froth treatment
Proprietary froth treatment Producing pipeline-quality crude without an on-site upgrader Sediment and water Existing mines Synthetic crude Bitumen “Naphthenic” froth treatment Onsite Refinery upgrader Sediment and water Bitumen Kearl Dilbit “Paraffinic” Diluent froth treatment Refinery Asphaltenes
Slide 58: Improved environmental performance
Improved environmental performance Wells-to-wheels GHGs about the same as average crude refined in U.S. % Production Refining Distribution Combustion California Mining synthetic Venezuela Kearl Average barrel Mexico Heavy crude oil Boscan Dilbit refined in U.S. Maya Source: IHS CERA, “Comparing GHG
Slide 59: Efficient cost structure
Efficient cost structure Sustain production at capacity, drive efficiencies Unit cash operating costs $/bbl1 Expected 30 range Initial Initial + Expansion Full Capacity 1before royalties
Slide 60: Kearl Expansion Project
Kearl Expansion Project
Slide 61: Kearl Expansion Project video
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Slide 62: Kearl expansion project status
Kearl expansion project status On schedule and on budget for start-up in 2015 Relative progress % complete 100% Same design as KID 80% Initial (KID) Same major contractors Expansion (KEP) 20% 60% Full-size modules in Edmonton 40% Lessons learned from start-up 20% Improved performance 13 25 Months si
Slide 63: 40+ year asset life
40+ year asset life Expansion potential to 345 kbd Kearl development plan kbd1 Expansion/Debottleneck – evaluating 125 kbd Expansion Project – under construction 110 kbd Initial Development—producing 110 kbd 2013 2050 1gross, before royalties
Slide 64: Market access strategy
Market access strategy Ensure take-away capacity for all equity crude Optimize use of existing systems to maximize value Participate in multiple new pipeline opportunities Use rail options to bridge and provide contingency Mitigate any future surplus via portfolio optimizations
Slide 65: Industry transportation costs
Industry transportation costs Significant value in minimizing transportation costs Alberta to U.S. Gulf Coast $/bbl, indicative 25 20 15 10 5 Committed Walk-up Efficient Inefficient pipeline pipeline rail rail
Slide 66: Pipeline projects
Pipeline projects Production and refining requirements covered Commitments to new capacity kbd Currently transporting 400 kbd from Alberta 300 • Secured 390 kbd of additional capacity 200—Base Keystone - Gulf Coast Access - Keystone XL - Trans Mountain - Energy East 2014 2016 2018
Slide 67: Rail projects
Rail projects Capability to bridge gaps due to apportionment and pipeline timing Edmonton rail loading terminal - Joint venture with Kinder Morgan - Strategically located - 100-250 kbd unit train capacity - In service early 2015 Additional facilities - 20 kbd Strathcona Cold Lake loading - 30 kbd Na
Slide 68: Future opportunities
Future opportunities
Slide 69: Research & technology
Research & technology World-class facilities, unmatched commitment IMO $1 billion Houston Calgary Upstream Upstream annually XOM Paulsboro Sarnia Downstream Downstream
Slide 70: Oil sands research
Oil sands research A history of success, new technologies being advanced In situ In situ Mining SA-SAGD CSP NAE Solvent-assisted Cyclic solvent Non-aqueous SAGD process extraction Deliver performance improvements and long-term value
Slide 71: 300+ kbd new in situ potential
300+ kbd new in situ potential Development planning activities ongoing Resource potential 300,000 net acres 4.7 billion barrels1,2 Top-tier quality Enabling technology SAGD / SA-SAGD Potential scope 9+ phases 35-45 kbd per phase Regulatory process First application in 2013 IMO share, before royaltie
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Slide 73: Aspen project
Aspen project 1.1 billion barrels potential, regulatory application submitted Three phases, 45 kbd each “Design one, build multiple” SAGD/SA-SAGD technology Regulatory filing: December 2013 Progressing technical definition Resource potential consists of 0.4 billion bbls 2P Reserves and 0.7 billion b
Slide 74: Unconventional gas opportunities
Unconventional gas opportunities Large acreage position, development optionality rce potential 540,000 net acres ~20 TCF potential1,2 Liquids-rich Montney/Duvernay elopment options Large-scale export project Drilling for North American market Evaluate existing acreage Assess potential LNG gross, bef
Slide 75: LNG
LNG Early stages of evaluating the competitiveness of an export project Government engagement Celtic acquisition Scoping facility February 2013 size & cost Fiscal and Resource Pipeline Liquefaction Shipping Regas Market Regulatory Evaluating pipeline options Site evaluation ongoing Export license Cu
Slide 76: Final comments
Final comments
Slide 77: Long-term potential
Long-term potential Opportunities to produce 1 million barrels per day by 2030+ Production outlook kboed1 1000 600 400 200 2013 2020+ 2030+ 1before royalties 77 | Imperial | Investor Days | 2014
Slide 78: Factors impacting pace of further growth
Factors impacting pace of further growth Project Competitiveness Technology Market Advancements Conditions Regulatory Financial Environment Considerations
Slide 79: Business model
Business model Deliver superior, long-term shareholder value Long-life, competitively advantaged assets Disciplined investment and cost management Integration and synergies High-impact technologies and innovation Operational excellence and responsible growth ExxonMobil relationship
Slide 80: For more information
For more information www.imperialoil.ca Twitter /ImperialOil YouTube /ImperialOil LinkedIn /Imperial-Oil 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, A
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