Imperial Oil Ltd.’s $12.9-billion Kearl oil sands project operated well under capacity in the first quarter, though output from the new mining development still contributed to a 19-per-cent jump in profit.
Kearl, which started up a year ago, averaged 70,000 barrels of bitumen a day in the period, 40,0000 barrels below capacity. Imperial said it was making progress toward keeping output at maximum rates.
Meanwhile, Kearl’s expansion aimed at doubling capacity is 81 per cent completed and is ahead of its schedule, which foresees producing by late 2015, it said. Imperial owns the northeastern Alberta development in partnership with Exxon Mobil Corp.
It is one of two multibillion-dollar oil sands projects Imperial is building. The other is the Nabiye expansion phase of the Cold Lake development, which is due to start producing 40,000 barrels a day by the end of this year.
Imperial and its Canadian energy peers enjoyed a rare combination of high prices for both oil and natural gas as well as favourable currency markets in the first quarter, which helped them pump out hefty profit.
In the recent quarter, Imperial earned $946-million or $1.11 a share, up from year-earlier $798-million or 94 cents. Revenue rose 15 per cent to $9.2-billion.
The bottom line was also bolstered by a 59-per-cent decrease in capital spending at $1.2-billion.
Oil production rose 14 per cent and natural gas output climbed 1 per cent, the company said.
It realized an average price on gas sales of $6.56 per thousand cubic feet, an 87-per-cent increase from the first quarter of 2013, as frigid weather across the continent prompted a surge in heating demand and led to a massive draw on inventories.