CALGARY (CP) -- Higher crude prices, smooth-running marketing and refinery operations and higher volumes from the Syncrude oilsands project helped power Imperial Oil Ltd. [TSX:IMO] to a record high profit last year.
''Overall, improving operations, a strong price environment and record production at both Cold Lake and Syncrude contributed to record earnings and shareholder returns that well exceeded the energy equity index,'' chairman and CEO Tim Hearn said in a statement.
The positive factors for the year were offset a bit by lower than expected conventional resource volumes, pressure from the rising Canadian dollar and higher tax expenses.
The Calgary-based company earned C$3.19 billion in 2007 on revenue of C$25 billion, beating Imperial's previous record of C$3.04 billion set in 2006 on revenue of C$24.5 billion.
In the fourth quarter, Imperial Oil earned C$886 million, or 96 cents a share, which was up from C$794 million, or 83 cents a share, in the fourth quarter of 2006. Revenue in the fourth quarter was C$6.7 billion, up from C$5.5 billion a year ago.
The average analyst estimate for the fourth quarter was for a profit of 83 cents per share according to Thomson Financial.
Imperial Oil, a subsidiary of U.S. energy giant ExxonMobil, is Canada's largest integrated oil company. In addition to being active in oil and natural gas production and refining, Imperial also operates some 2,000 Esso gas stations across Canada.
BMO Capital Markets analyst Randy Ollenberger was pleasantly surprised by Imperial's earnings.
Imperial's upstream production was a bit on the ''light'' side, ''but they still managed to generate more earnings than expected out of the upstream segment by reporting lower costs,'' Ollenberger said.
Imperial's share of production from Syncrude, a partnership owned by several companies, averaged a record 76,000 barrels a day in 2007, up from 65,000 a year earlier.
Imperial is the second-largest Syncrude owner, after Canadian Oil Sands Trust [TSX:COS-UN], with a 25% stake.
Syncrude, located near Fort McMurray, Alta., has a total production capacity of 350,000 barrels of oil per day, making it the largest oilsands project in the world. However, the consortium announced this week that extreme cold had forced a temporary suspension of operations after some of the necessary instrumentation froze.
The company also saw increased production at its in-situ oilsands project at Cold Lake at 154,000 barrels of oil per day in 2007 compared with 152,000 in 2006.
In February of last year, the Alberta and federal government gave a conditional green light to the proposed Kearl oilsands project, a joint venture between Imperial and ExxonMobil Canada. The open-pit mining operation could average 300,000 barrels a day if it goes ahead.
Imperial and ExxonMobil Canada also acquired exploration rights for a 202,000-hectare section in the Beaufort Sea. Imperial's share of the spending is about C$293 million.
Imperial shares gained 21 cents to close at C$49.36 on the Toronto Stock Exchange Thursday.
Copyright 2008 The Canadian Press