Why Imperial Distinct competitive advantages that deliver long-term value Asset base Growth opportunities High quality, high performing assets A large inventory of attractive opportunities across the portfolio to support future…
Energy fundamentals Global megatrends will drive the worlds demand for energy Increasing populations Growing economies Improved living standards Advances in energy efficiency Imperial 2016 4
Energy demand Global demand to increase 25% by 2040, oil & gas remain key Energy demand, quadrillion BTUs 750 + 25% Gas demand driven by power generation 500 Renewables1 + Fastest growing major energy source Coal Oil remains largest…
Responsible development Dual challenge to meet demand, reduce environmental impact All energy sources required Climate policies to affect energy mix Investments must compete globally Technology and innovation key Imperial…
Liquids challenge Significant new production required to offset natural decline Global liquids production, mbd 120 Global decline of 4-5% per year 90 New 50 + New supplies needed from all regions 60 mbd Existing Major ongoing…
Canadas opportunity Oil sands represent large, accessible liquids resource base Access to worlds oil reserves World class resources Relative political stability Other Open to Restricted Canada private Balanced regulatory…
Global competitiveness Highest quality oil sands competitive on a global basis Breakeven Brent price, US 125 100 mining mining 75 in situ in 50 25 0 Brazil North Sea GOM West Africa Canada North America oil sands tight oil…
Oil sands Unique technical and operational requirements Production, mbd 3 Production split between in situ & mining 2 History of technology and innovation In situ Economies of scale fundamental 1 Specialized expertise Mining 0…
Business environment Several challenges, time of uncertainty and opportunity Current period of low oil prices Environmental, regulatory reviews Global competitiveness pressures Pipeline, market access uncertainties Imperial…
Scope of operations Nationwide leadership across the full value chain Kearl mining Research Syncrude mining Sarnia refinery Rail terminal Cold Lake in situ Sarnia chemical Strathcona refinery Nanticoke refinery Fuels…
Business model Deliver superior, long-term shareholder value Long-life, competitively advantaged assets Disciplined investment and cost management Value-chain integration and synergies High-impact technologies and innovation…
Company priorities Disciplined focus on performance, execution and creating value Base business fundamentals + Maximizing asset performance + Capturing cost and organizational efficiencies Progressing growth opportunities +…
Safety performance Committed to a workplace where Nobody gets hurt Total incidents per 200,000 hours worked1 1.0 0.8 0.6 5-yr 0.4 average 2015 0.2 YTD 0.0 Canadian industry Imperial 1Equivalent to 100 workers for one year…
Organizational effectiveness Definitive steps to enhance efficiency, increase effectiveness Above-field personnel1, indexed % 100 Contractors - 22% Clarify. Simplify. Focus. mindset 75 Realigning capacity with business need 50…
Integration & synergies Delivering competitive advantage in all business lines Equity crude placed in Upstream highest netback markets Oil & natural gas production Cost-advantaged feedstocks for refineries & chemical IMO / XOM…
Technology leadership Unparalleled commitment, history of research and innovation Canadas first Cyclic steam Steam-assisted Solvent assisted research stimulation gravity drainage technology patent department patent pilots IMO 1…
Upstream
Upstream portfolio Completing period of unprecedented liquids growth In situ Production, kbd Cold Lake 500 Highest liquids production since 1989 Growth portfolio Highest total production since 1995 400 Mining Kearl Syncrude 300…
Cold Lake: world-class in situ operation Best-in-class operational performance Cyclic steam 100% IMO Producing stimulation owned since 1985 1.7B 165 bbls kbd 2P reserves1 average production1 Large, high quality bitumen resource…
Continuously improving resource recovery Achieved through technology, innovation and best practices Cold Lake demonstrated recovery, % 80 2010+ 60 2000s 40 1990s 1980s 20 1970s 0 Thermal Pilots Commercialization of Megarow…
Maximizing steam utilization Achieving enhanced economic, environmental performance 2008 vs. 2015, indexed % 100 75 Recycling more than 95% of water 50 Reducing energy intensity Increasing production 25 0 Fresh water to Total…
Industry-leading reliability Achieved through continuous improvement 2012-15 average gas turbine1 reliability, % 100 99 +7 days annual Leader in equipment reliability 98 uptime Effective maintenance strategies 97 Optimizing…
Achieving lower cost per barrel Mature, lean asset continuing to see improvements Unit cash opex, US Production, kbd 2015 industry unit cash opex, C indexed % 100 180 75 120 Cold Lake 50 60 25 0 0 0 5 10 15 20 2014 2015 1H16…
Kearl: next generation oil sands mining Driving operational performance and synergies Mining without 71% IMO Producing upgrader owned since 2013 3.2B 220 bbls kbd 2P reserves1 targeted production2 Large, high-quality bitumen…
Proprietary froth treatment Producing pipeline-quality bitumen without an on-site upgrader + Diluent Kearl Bitumen Dilbit Paraffinic froth treatment Sediment & water Refinery Asphaltenes Other mines Bitumen Synthetic crude…
Achieving lower cost per barrel Cost discipline, economies of scale fundamental to success Unit cash opex, US Production, kbd indexed % 100 150 75 More than 50% reduction in unit opex 100 50 Expansion benefiting cost profile 50…
Mine performance improvement Optimization ongoing, integrating with plant performance 2014 vs. 20151, % Best-in-class 100 75 Best-in-class availability 50 Utilization improving with plant uptime 25 Enhancing ore processing 0…
Plant performance improvements Doing more with less, extracting value from plant operations Solvent additions, indexed % 2014 2015 - 60% Systematic, integrated team approach 0 25 50 75 100 Sustainable value capture Bitumen recovery…
Enhancement opportunities Activities focused on efficient capacity creep Existing scope Implementation of operational learnings to enhance capacity Incremental scope and optimize asset Equipment upgrades and utilities integration to…
Syncrude: pioneer of oil sands mining Improvement underway to capture full potential Mining with 25% IMO Producing upgrader owned since 1978 1.1Bbbls 76kbd 2P reserves1 average production1 High value, synthetic crude production…
Reliability improvement Value is driven by producing the incremental barrel Production1, kbd 80 Impact of fire & turnarounds 60 Reliability risk management 40 Planning and execution excellence Focus on upgrader performance 20…
Syncrude focus areas Improving resilience in a low price environment 2015 cash conservation, % Market US10 per barrel opex reduction capture Enhanced execution of key programs Scope and timing Work selection and fit-for-purpose…
Enhancement opportunities Leveraging existing and owner-driven oil sands expertise Reliability Utilization of expertise, competency and equipment Synergy strategies to enhance performance Identify further opportunities to leverage…
Sustainable, structural savings Driving upstream costs down with continuous improvement Continued market capture Scope, structure and technology Ongoing rate, term negotiation Innovative, efficient new work approaches Expanded…
Upstream costs per barrel Asset portfolio remains competitive at full cost Unit cash opex1, US 30 - 35% Realizing economies of scale 20 Implementing scope optimization 10 Sustainable efficiency gains 0 2014 2015 1H16 1Data as…
Leader in technological advancement Objective to improve economics, reduce environmental impact Well-to-wheels GHG emissions intensity, indexed % 125 Production Imperial breakthrough technologies Refining 100…
Watch the video on Imperials YouTube channel Imperial 2016 40
Upstream resources Large, high quality resource base with significant potential In situ Year-end 2015 resource base, billion boe1 Aspen Cold Lake Exp. 25 Growth portfolio 20 Other Mining Non-aqueous Contingent Resource extraction…
In situ growth portfolio Multiple opportunities, development planning ongoing Resource potential 5 billion barrels bitumen1,2 Top-tier quality Enabling technology SA-SAGD / other solvent technologies Potential scope Multiple phases,…
In situ technology advancements SA-SAGD provides step-change improvement opportunity Pilot results, indexed % 100 SAGD Industry 75 Economic, environmental gains SA- SAGD IMO Ability to scale efficiently 50 Technology ready to…
Aspen First potential commercial SA-SAGD project In situ with 100% IMO 1st production solvents owned 2020+ 1.2B 75K barrels bbl/d resource gross production potential1 per phase1 Environmental, economic technology advantages…
Cold Lake Expansion Development of Grand Rapids formation with SA-SAGD In situ with 100% IMO 1st production solvents owned 2020+ 550M 55K barrels bbl/d resource gross potential1 production1 Environmental assessment,…
Upstream summary Distinct competitive advantages deliver long-term value Asset Operational Growth Technology base excellence opportunities leadership + High quality + Industry leading + Large inventory + Innovation + Long-life +…
Strong cash flow, selective investments More than 8 billion net cash generated over the past 5 years Net cash, C billion 2 Strong cash generating capabilities 1 Continued structural advantages Low sustaining capital required 0…
Refining: efficient, value-driven business Integration elevates advantage in mature industry Nanticoke, Sarnia, Strathcona, Ontario Ontario Alberta 421 kbd 92 percent refining capacity 2015 utilization Well-positioned,…
Refining ranking Strong performance in North America, top-tier in Canada 1st Quartile 2nd Quartile IMO refineries Canadian industry 3rd Quartile excluding IMO 4th Quartile Non-energy Process unit Energy cash opex utilization…
Continuous improvement Global leadership, ongoing competitive focus 2015 refinery utilization, % 100 90 Improvement vs. 2010 80 70 IMO Canada* North America Global Source: BP Statistical Review of World Energy 2016,…
Downstream enhancements Evaluating further value creation Cogeneration Strathcona Earliest FID 2017 Capture gas-power spread More efficient steam Leverage carbon tax credits Diluent Recovery Unit Strathcona Timing to be…
Optimizing value Competitive advantage through scale, skill and integration Currently shipping 400 kbd by pipeline Crude sold to 35+ refineries worldwide Real-time midstream optimization Imperial 2016 54
Rail terminal Strategic asset provides options to reach high value markets Edmonton, Location Start-up April Alberta advantage 2015 Joint 210K venture bbl/d with Kinder gross Morgan capacity Equity crude flow assurance…
Fuels & Lubes: marketing excellence Delivering valued products to customers nationwide Wholesale Commercial Industrial 1,700 + 478 BW kbd retail sites1 2015 sales Focused on premium markets High capability distributor…
Retail conversion Sale of remaining 497 company-owned sites Company-owned, Branded wholesaler agent-operated owned and operated Pre-sale: 30% of sites Pre-sale: 70% of sites Post-sale: 0% of sites Post-sale: 100% of sites Imperial…
Continuous development Committed to enhance retail offering and grow value Existing, successful Fuel technology partnerships development Long-term supply Customer experience agreements enhancements Commitment to grow…
Chemical: unique, commodity business One of Canadas leading producers of chemical products Sarnia, Refinery Location Ontario integration advantage 945 287 kt million 2015 sales 2015 record earnings Top-tier asset, specialty…
Leadership in polyethylene Innovation in injection and rotational molding since 1983 Outstanding resin quality Expert technical knowledge Solutions for complex designs Imperial 2016 60
Gas cracker furnace project Improves energy efficiency, increases high value production Cutting-edge Capacity Feed-in technology creep July 2016 7% 5M capacity annual cost increase savings Improved energy efficiency Reduced…
Downstream and Chemical summary Distinct competitive advantages deliver long-term value Asset Operational Value chain Technology base excellence integration leadership + Location advantage + History & expertise + Customer focus +…
Corporate Imperial 2016 64
Financial performance Demonstrating value of integration through the business cycle Cash flow from operating activities, C billion Five-year average, % 5 4 3 Upstream Downstream & other 2 1 0 2011 2012 2013 2014 2015 Imperial 2016…
Capital efficiency Maximizing investment value and life cycle performance Return on capital employed, % 25 10-year average 3-year average 15 5 IMO HSE SU CNQ CVE -5 Source: company publications Imperial 2016 66
Financial strength Strong balance sheet, priority access to financial markets 2Q16 debt to capital, % 40 30 Leverage XOM relationship 20 Borrow on most attractive terms 10 Optimize use of floating rate debt 0 Maintain capital…
Shareholder distributions Over 10 billion returned to shareholders in the last 10 years 2006-15 average payout ratio1, % 2006-15 total distributions, C billion IMO SU HSE IMO CVE HSE SU CNQ CNQ CVE 0 5 10 15 20 25 30 35 0 3 6 9…
Share buybacks Proven history of returning cash and preserving value Million1 2,000 1995 1,500 Repurchased 50% of shares 1,000 Non-dilutive equity strategy 2015 Priority on shareholder interests 500 0 Shares outstanding…
Dividends Priority to pay a reliable and growing dividend Dividend per share1, C 0.60 100+ years of consecutive payment 0.40 21 years of consecutive growth 5.5% 10-yr compounded growth rate 0.20 Increase to 0.15/sh payable 2Q16…
Capital expenditures Recently completed growth, evaluating future opportunities Annual average, C billion 6 5 Kearl, Nabiye projects complete + Added nearly 200 kbd capacity 4 3 Sustaining capex under C1B annually + Down 30+% from…
Financial resilience Strength provides flexibility under a range of oil prices 2016-20 annual average, C billion 4 55 3 Ability to meet highest priorities 2 45 Significant cash flow leverage Growth Options to pursue growth 1…
Why Imperial Distinct competitive advantages that deliver long-term value Asset base Growth opportunities High quality, high performing assets A large inventory of attractive opportunities across the portfolio to support future…
For more information: imperialoil.ca Twitter YouTube LinkedIn For more detailed investor information, or to receive annual and interim reports, please contact: Meredith C. Milne Manager, Investor Relations T: +1 (587) 476-4743 E:…
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