Imperial Investor Day November 7, 2018 Imperial 2018 1
Opening Remarks Rich Kruger Chairman, President and Chief Executive Officer Imperial 2018 2
Q3 recap Results consistent with expectations for strong second half performance 393,000 boepd 749 million Upstream production Net income 388,000 bpd 1.2 billion Refinery throughput Cash from operations 516,000 bpd 573…
Global energy outlook Energy demand to increase 25% by 2040, oil and gas to remain key Energy is required to power economic growth and improve standards of living Demand increases driven by population growth and rising incomes…
Global liquids outlook Oil to remain the world's largest energy source well into the future Demand mbd 120 Growth driven by transportation, chemicals 100 New Global resources sufficient to meet demand Production 80 Required New…
Canadas opportunity Highest quality oil sands expected to be competitive on a global basis Breakeven Brent price US/bbl 125 3rd largest liquid reserves globally 100 mining Track record of innovation, responsible development 75…
Imperials operations High quality, integrated, balanced, coast-to-coast asset portfolio Kearl mining F&L marketing Distribution network Syncrude mining Strathcona refinery Sarnia refinery Cold Lake in situ Sarnia chemical…
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…
Portfolio enhancement Focusing on highest value assets and competitive core competencies Acquired Startup of Startup of Cold Commissioned Startup of Rebranding Husky Rebranding 200+ Installing interest in first phase Lake Nabiye…
Upstream assets Increasing concentration in long-life, high quality oil sands assets Production Kearl koebd Mining - PFT 71% interest 400 Total 300 Syncrude Kearl Mining - upgrader 25% interest 200 Syncrude 100 Cold Lake…
Risk management Comprehensive management of full spectrum of enterprise risks Strategic Reputational Safety Systematic approach in all areas Fundamental line management responsibility Enterprise Financial and Health and…
Corporate responsibility Commitment to strong environmental, social and governance principles Taskforce on Climate-related Financial Disclosures guidelines Reducing GHG intensity of existing and future operations 2.4 billion…
Safety and operational integrity Organization-wide priority to protect people, assets and the environment Total Recordable Incident Rate Average number of spills 0.5 25 0.4 20 5-yr average 0.3 2017 15 Upstream Downstream & other…
Integration Delivering value, competitive advantage and resiliency across the business cycle Equity crude placed in Upstream highest netback markets Oil & natural gas production Cost-advantaged feedstocks for refineries &…
Technology and innovation Unparalleled commitment and achievement throughout 138-year history Canadas first Cyclic steam Steam-assisted gravity Solvent-assisted research department stimulation patent drainage patent technology…
Imperials winning formula Increase cash flow, deliver industry-leading returns throughout the cycle Deliver industry Leverage technology, Continue to achieve Be the most Aggressively capture leading performance integration and…
Upstream at a glance Large, long-life predominantly oil sands portfolio 6.5 Norman Wells Syncrude mining with upgrader Kearl mining without upgrader billion boe Cold Lake in situ 2P reserves 400 Unconventional…
Upstream overview 30+ year proved reserve life, nearly 17B cash generated over last 10 years Production Annual cash from operations koebd B 3 400 300 2 200 1 100 0 0 2011-14 2015-17 2018e 2011-14 2015-17 Q318 YTD US/bbl…
Syncrude Oil sands mining pioneer Mining with 25% IMO Producing upgrader owned since 1978 0.7B bbls 60 kbd 2P reserves 2018 production outlook High value synthetic crude oil Improve reliability by eliminating major events…
Syncrude reliability High-potential asset with priority on eliminating one-time events Production kbd Production challenged 90 Significant volume loss events Target production Upgrader performance 60 Reliability improvement…
Syncrude collaboration Leverage owner strengths to accelerate performance improvement Owner company expertise Provision of business services Collaborative production forums Regional logistics and infrastructure Commercial…
Kearl Next generation oil sands mining Mining without 71% IMO Producing upgrader owned since 2013 3.3B bbls 200 kbd 2P reserves 2018 production outlook Large, high quality resource Improving performance Near-term production…
Kearl performance Focused on improving reliability, cost structure and realizations Production and unit cost kbd US/bbl 300 40 Leveraging full organizational capability 200 Growing cash generation capacity 20 Averaging 5/bbl CAD…
Kearl performance indicators Targeting best-in-class in all areas of operation Haul truck utilization, % Solvent loss, indexed 100 100 50 50 0 0 2013-14 2015-16 2017-18 2013 2018 Plant bitumen recovery, % Logistics…
Delivering on 200 kbd Actions previously completed to deliver on commitment of 200 kbd annual average Improved ore preparation performance Crusher and dump hoppers Ore conveyor drive chains Crusher teeth and bearings Mine…
Increasing to 240 kbd Investing to increase production from 200 to 240 kbd in 2020 Adding supplemental crushing capacity Offset equipment downtime Create surge bin conveyor redundancy Installing slurry piping interconnections…
Opportunities for 280 kbd Series of targeted debottlenecking and redundancy improvements Resource optimization Primary separation cell upgrades Secondary bitumen recovery enhancements Froth treatment interconnects Diluent and…
Productivity and digital initiatives Leveraging technology to drive improvements and enhance performance Asset improvement teams Bangalore Technology Centre Digital foundation Drones for mine connecting equipment, planning and…
Autonomous haul trucks Ongoing pilot to increase mine safety and productivity GPS Partnering with Caterpillar and Finning Fleet of seven trucks in productive service Testing for unique oil sands conditions 3D sensing Cost…
Maximizing Kearl value Significantly improving financial and operating performance Currently delivering 200 kbd Supplemental crusher to deliver 240 kbd Opportunities for 280 kbd Leveraging capabilities of entire organization…
Cold Lake Large scale in situ operation Cyclic steam 100% IMO Producing stimulation owned since 1985 1.5B bbls 150 kbd 2P reserves 2018 production outlook Drilling program resumed in 2018 Continued application of new…
Cold Lake performance Focus on life-cycle optimization and cash generation Production kbd 200 Continued strong operating performance 150 Maximizing life-cycle return and recovery Optimizing steam distribution 100 Fully utilizing…
Cold Lake performance indicators 40+ years of continuous improvement Drilling costs Fresh water use Power related volume loss 100 100 100 Indexed 50 50 50 0 0 0 2015 2018 2008 2017 2014 2017 Bitumen recovery, % 80…
Cold Lake recovery Ongoing enhancement through technology and innovation Recovery method, % of production 100 Resource life supports technology testing Recovery technology evolving 50 Driving digital solutions Economic and…
Maximizing Cold Lake value Strengthening performance and offsetting natural decline Production kbd Annual base decline of approximately 5% Solvents Drilling and wellwork mitigate decline Technology enables growth Potential for…
Norman Wells Operations restarted after two-year pipeline shutdown Precautionary shutdown in late 2016 Replacement of 2 km pipeline section Restart of production in October 2018 Ramp back to 10 kbd in 2019 Optimize remaining…
Unconventional optionality Liquids rich opportunity, paced development approach Significant liquids rich acreage holdings Competitive with US unconventional Fully leveraging ExxonMobil/XTO expertise Initial Duvernay development…
Pricing fundamentals Taking a closer look at bitumen realizations 2017 2018 YTD US/bbl US/bbl WTI North American light benchmark 51/bbl 67/bbl Quality/differential between light and heavy crudes Transportation from production to…
Equity crude value Placing crude in markets that maximize general interest value 400 koebd Total Production 25 koebd 75 kbd 300 kbd Bitumen (400 kbd Dilbit) Natural Gas Syncrude synthetic and assorted liquids (Strathcona…
Market access Edmonton rail terminal provides unique competitive advantage Terminal Utilization kbd Two rail service providers 240 Ramp-up agreements in place 200 Capacity 160 Unmatched access to railcar fleet 120 Customer…
Near-term production outlook Growth through capitally efficient projects and reliability improvements Production koebd Sustained production at Cold Lake Ramp-up of Norman Wells Improved reliability at Syncrude Supplemental…
Business Development Theresa Redburn Senior Vice President, Commercial and Corporate Development Imperial 2018 44
Research and development Continuous long-term investment in technology and innovation 138 years of unparalleled commitment IMO Upstream & Downstream research centres 1 billion Calgary - oil sands technologies, environmental…
Imperial Research priorities Focused on oil sands and product research Advanced recovery technology Enhanced recovery technology development Lower costs Improve performance Reliability and 150-200 Environmental million…
In situ technologies Developing full suite of technology applications to match resource base Pressure Higher CSS CSP Asset characteristics drive technology LASER Depth of resource Quality of resource SA- Stage of development…
Advanced in situ recovery Technology drives economic and environmental performance improvement Cyclic Technologies Cyclic Solvent Liquid Addition to Steam to Enhance Recovery Process (LASER) (CSP) Up to 10% solvent, 90% steam 100%…
In situ growth portfolio Large inventory of top tier development opportunities Kearl Accessible via variety of technologies Aspen Syncrude Fort McMurray Multiple phases, 50-75 kbd potential per phase Corner Chard Design One,…
Resource inventory Progressing multiple development opportunities Level of Definition Regulatory Status Commercial Project Name Resource Concept Development Application Scheme Full Assessment Select Plan Submission Approval…
Aspen phase 1 First commercial SA-SAGD development 75 kbd bitumen production Project to develop 1.2 billion barrels 2.6B initial development Central processing facility with cogen Five initial well pads, 67 well pairs…
Aspen Technology key to delivering both economic and environmental benefits Pilot results, indexed Relative GHG intensity 100 In situ industry average Industry 50 Imperial SA- SAGD SAGD 0 Capital intensity Cumulative SOR…
Why Aspen, why now Large, long-life high quality investment opportunity Annual free cash flow 1st 10-year Average SA-SAGD technology with economic and environmental benefits billion Brent, /bbl 1.0 100 Lower carbon intensity vs.…
Growth opportunities Suite of attractive oil sands investment opportunities Near term projects Under evaluation K/bbl K/bbl 40 40 Capital intensity 30 30 Aspen Phase 1 20 Aspen 20 Aspen Cold Lake Phase 1 Expansion Phase…
Downstream and Chemical Overview Dan Lyons Senior Vice President, Finance and Administration Imperial 2018 55
Downstream at a glance Well positioned, high performing and integrated 400 kbd Refining capacity Marketing Logistics Refining 500 kbd Product sales Strategically Strong Quality products positioned refineries logistics…
Downstream overview Optimized throughput, growing sales, generated nearly 8 billion in cash since 2014 Refinery throughput and sales Annual cash from operations kbd B 600 2.0 500 1.5 400 300 1.0 200 0.5 100 0 0.0 2009-13…
Refining performance Global best practices and targeted investment increase reliability and profitability Utilization, % Regretted loss, % 100 Increasing utilization 90 Two thirds reduction in regretted losses Top-tier Solomon…
Industry product and feedstock pricing Widening differentials increase refining profitability Crude Pricing US/bbl 90 80 Brent 70 Product pricing largely Brent based 60 50 Refineries benefit from discounted crude 40 MSW 30…
Refining feedstocks Well positioned to capture differentials Heavy crude refined kbd 100 Heavy crude differentials Increased crude slate flexibility 50 Captured more than 200M pretax benefit Q318 YTD 0 2014-17 Q318 YTD Light…
Sales and market position Market leader in product sales actively capturing new business 2018 YTD Sales KBD Market Share Mogas 254 29% Unmatched scale Diesel 126 22% Integrated across the value chain Jet 41 27% Asphalt 23 29%…
Sales strategy Leverage scale, integration and brand to pursue profitable sales growth The brand advantage Build strategic relationships Grow ratable sales Capture brand value Optimize integrated profit Spot Term…
Aviation Market leader in growing segment Jet sales kbd 50 Increased sales into Canadas major airports 40 Over 50% of Ontario market 30 Recently entered Vancouver market 20 Attractive integrated earnings 10 0 2014-17 Q318…
Asphalt Leveraging integration to grow earnings Asphalt sales kbd 25 Growing North American demand 20 Leveraging logistics to produce year round 15 Utilizing advantaged Cold Lake blend 10 Growth projects at Strathcona and…
Retail Captured 1 position in Q3 2018 Retail sales volumes Superior Products kbd Synergy gasoline 180 Synergy Diesel Efficient 160 140 Convenience 120 Nearly 2,200 locations 100 Speedpass+ app 80 Loyalty 60 PC Optimum points…
Marine fuels Well positioned for IMO 2020 sulphur specification change Heavy differentials to increase Diesel/jet prices to strengthen Shippers and refiners adapting Integration reduces impacts Imperial 2018 66
Downstream summary Positioned for industry leading financial performance High performing refineries Advantaged feedstocks Scale, integration and logistics Growing high value sales Brand advantage Strong sustained cash…
Chemical at a glance High value products, well positioned, integrated assets 800 Integrated Sarnia Chemical Site Specialty customer products kt Sales Polyethylene 1.3 Billion Cash generated since 2014 Advantaged…
Chemical overview Superior products and strong cash generation Chemical product sales Annual cash from operations kt M 1,000 300 250 750 200 500 150 100 250 50 0 0 2009-13 2014-17 2018e 2009-13 2014-17 Q318 YTD Sales…
Integrated petrochemical site Advantaged location and industry leading integration Feedstock, % 100 Spot Propane Fully integrated with Sarnia refinery Marcellus Ethane Mid-west Flexibility in feedstock optimization Ethane…
Premium products Polyethylene for rotational and injection molding drives profitability Key end uses Injection molding (pails, containers, crates) Rotational molding (storage tanks, toys) Superior customer experience Consistent…
Value chain Integrated across the value chain Integration advantage Crude Optimization Manufacturing Logistics Commercial B2B Chemical Branded Retail Leverage opportunities from crude to customer Financial resilience across…
Delivering Value Rich Kruger Chairman, President and Chief Executive Officer Imperial 2018 73
Cash flow Delivering value and resiliency through integration, 33 billion from operations over last 10 years Cash from operating activities 5-year average, % B 5 4 Upstream Downstream & Chemical 3 10-year average, % 2 1…
Financial strength Strong balance sheet, optionality and access to financial markets June 30, 2018 debt to capital, % 50 Maintain strong balance sheet 25 Pay reliable and growing dividend Invest in high value projects Return…
Dividends Priority to pay a reliable and growing dividend Dividend per share 0.80 100+ years of consecutive payment 0.60 24 years of consecutive growth 0.40 8.7% 5-yr compounded growth rate 0.20 Increased to 0.19/sh payable…
Share buybacks Proven history of returning surplus cash and preserving value Shares outstanding, million 2,000 Repurchased 50% of shares since 1995 1995 1,500 Reinstated current program in 2017 1,000 Purchases of 2.2B since 2017…
Shareholder distributions Nearly 9 billion returned to shareholders over the last 10 years Total distributions 2008-2018 1H, billion Average payout ratio 2008-2018 1H, % SU IMO IMO SU HSE HSE CNQ CVE CVE CNQ 0 5 10 15 20 0…
Capital expenditures Five-year capital expenditure plan consistent with previous communications Capital expenditures B 3 5-year capex average at 2.1-2.2 billion/year 80% upstream, 20% downstream/other 2 Sustaining capital remains…
Financial strength Resiliency and flexibility under a wide range of prices 2018 2022 annual average B WTI, /bbl 8 Ability to meet highest priorities 6 80 Growth Surplus Significant cash flow leverage 4 Cash 60 2 Growth 40…
Why Imperial Distinct competitive advantages that deliver long-term shareholder value Asset base Growth opportunities High quality, long-life assets Large inventory of opportunities across the portfolio to support future upstream…
For more information: Dave Hughes Manager, Investor Relations +1 587.476.4743 dave.a.hughesexxonmobil.com imperialoil.ca twitter.com/ImperialOil linkedin.com/company/imperial-oil youtube.com/ImperialOil Imperial 2018 83
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