Canadian integrated energy company Imperial Oil Ltd posted a first-quarter loss on Friday, recording a $301 million non-cash charge as crude prices plunged because of excess supply and a drop in demand due to the coronavirus pandemic.
Imperial, like its peers, has slashed spending, suspended buybacks and delayed some maintenance work to conserve cash and bolster its balance sheet at a time when the virus outbreak drags the world economy into a recession.
The company moved ahead the turnaround, or scheduled shutdown, of its Kearl and Syncrude oil sands deposits to balance near-term output with poor demand, after posting an 8 per cent jump in quarterly production due a record performance at Kearl.
The turnaround is expected to cut Kearl’s second-quarter gross production to average at 150,000 barrels per day (bpd) and lower Syncrude’s output to about 45,000 bpd to 50,000 bpd.
The company’s refinery utilization and petroleum product sales fell at quarter-end and are expected to remain lower in the second quarter as well, hurt by plunging demand for refined products because of worldwide lockdowns to curb the coronavirus.
Prices for the company’s U.S. crude fell about 17 per cent to $45.78 per barrel, while prices of Canadian crude fell about 40 per cent from year-ago levels to $25.60 per barrel.
Imperial posted a loss of $188 million, or 25 cents per share, for the quarter ended March 31, compared with a profit of $293 million, or 38 cents per share, last year.
The Calgary, Alberta-based company also maintained its quarterly dividend of 22 cents per share.
The company’s peers, Cenovus Energy Inc and Husky Energy Inc, posted quarterly losses on Wednesday. Husky said it would cut its dividend by 90 per cent, while Cenovus suspended its dividend.
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