Imperial Oil Limited · TSX:IMO
Imperial Oil — Investor Day (April 2023)
79 slides from Imperial Oil's investor day presentation, Apr 19, 2023
Slide 1: Form 8-K Current Report
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): April 19, 2023 IMPERIAL OIL LIMITED _______________________________________________
Slide 2: Item 7.01 Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure At 9:00 a.m. ET on April 19, 2023, Brad Corson, Imperial Oil Limited (the “company”) chairman, president and chief executive officer, and Dave Hughes, the company’s vice president, investor relations, will host the company’s 2023 Investor Day in Toronto and by webc
Slide 3: Signatures
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. IMPERIAL OIL LIMITED Date: April 19, 2023 By: /s/ Ian Laing Name: Ian Laing Title: Vice-president, genera
Slide 4: Imperial Investor Day, April 19, 2023
ess Imperial Investor Day April 19, 2023
Slide 5: Emergency evacuation route
Emergency evacuation route 16th Floor pal t Emergency Exit Stairwell Women’s Restroom gS Men’s Restroom & Fire Alarm ih Fireman’s/Service Elevator First Aid Box 42 AED Located ter pesves roan elocers Yo moni ele @ on the 27th Flr Use Pie Phone totter Securty/Fie of thee . Eetioe ten ere cars G Fire
Slide 6: Agenda
.- Agenda Opening remarks Sustainable solutions Upstream outlook Break Downstream & Chemical outlook Financial outlook Closing remarks Q&A Brad Corson Chairman, president and chief executive officer Sherri Evers Vice-president, commercial and corporate development Simon Younger Senior vice-president
Slide 7: Brad Corson
Brad Corson Chairman, president and chief executive officer ( } Imperial | 2023 Athi | a
Slide 8: Strong operations underpinned record financial results in 2022
Strong operations underpinned record financial results in 2022 Priority on safe and reliable operations, cost efficiencies, and capital discipline Strategy remains focused on: Maximizing value from existing assets Progressing value-accretive growth opportunities imperial | 2023 [Ey
Slide 9: Record shareholder returns in 2022
Record shareholder returns in 2022 Efficiently returning cash & = 28h consecutive year of growth .= 63% year-on-year growth $0.98 Dividends 48% JFMAMJJASOND y a Total shareholder = 45% share price appreciation . return $6.4B = A Share buybacks y = ~14% shares repurchased = 5% NCIB, 2 SIB's for $4B I
Slide 10: 2022 operational highlights
201 os 2 02 Best-ever lost time Best-ever second half Five consecutive quarters Highest annual production incident rate production at Kearl above 140 KBD at Cold Lake in Syncrude’s history WwW AQ, Record refinery Record distillate Completion of Sanctioned 20KBD utilization production Sarnia Products
Slide 11: Opportunities in the energy transition
Opportunities in the energy transition Meeting Canada’s energy needs in a lower carbon future Imperial’s goal for reducing greenhouse % gas intensity of operated oil sands (0) facilities by 2030 compared with 2016 Approved project to construct largest renewable diesel facility in Canada Announced co
Slide 12: Current business environment
Current business environment Supply challenges, demand growth, energy transition impacting global energy mix Global oil supply Capital constraints, energy transition driving underinvestment, challenging new supply Geopolitics play larger role as spare capacity shrinks Global oil demand Demand return
Slide 13: Delivering superior shareholder value
Investment in Delivering superior technology and shareholder innovation value The value of integration Technology solutions for Optimizing Relentless focus oncosts meeting sustainability goals existing assets Delivering value in base operations Pursue value-accretive opportunities Industry-leading b
Slide 14: Sherri Evers
Sherri Evers Vice-president, commercial Imperial | 2023 @ {
Slide 15: Canada - focused on sustainability
P@©@O@O® Canada - focused on sustainability Strong track record from a secure and reliable energy supplier Pragmatic policies with fiscal support Net zero ambition Expertise in carbon management Advanced regulatory systems Unprecedented industry collaboration Collaboration with Indigenous Peoples
Slide 16: Our climate strategy
| Our climate strategy Leveraging our expertise, integration and technologies Transformational technology solutions Continuing TCFD disclosure with third-party verified GHGs Imperial | 2023 EJ
Slide 17: Imperial climate goals
Imperial climate goals Recently announced company-wide net zero by 2050 goal i.oy / lio ce 20 0 On track tO Goal to reduce operated oil sands Company-wide goal to meet emissions GHG emissions achieve net intensity 10% intensity by zero emissions reduction goal 0% by 203 by 2050 in its operated for o
Slide 18: Imperial net zero by 2050
Imperial net zero by 2050 Robust planning and emission reduction roadmaps identified Supportive policy environment Technological advancements Investment in innovation Indigenous partnerships Low Cl production ccs Lower Cl fuels Future advancements Company-wide goal to achieve net zero emissions by 2
Slide 19: Leveraging our strengths
Leveraging our strengths Evaluating low carbon solutions businesses that capitalize on core capabilities & Hydro Large Oil refining and sales %Y & - Renewable Be fuels : = & Lithium @ Hydrogen Nuclear @ Qwir = LOW CARBON SOLUTIONS £ @evce Solar Fae) un Low Imperial capabilities fit’ High ‘Assessed o
Slide 20: Advancing carbon solutions
Advancing carbon solutions Innovating for a lower-carbon future Ongoing Kearl Boiler Autonomous Cold Lake Flue Gas Haul Trucks LASER Supporting Renewable Power Co-processing EBRT & CSP Low-carbon H, Sustainable Advanced Aviation Fuel Recycling | ©) @ Evaluating Advanced Bitumen Fuel Cells Direct Air
Slide 21: Transformational collaboration
Transformational collaboration Enabling sustainable solutions in support of lower-carbon future RD product trial at Kear! e — <2) Progressing pilot project at historic Leduc field e oe) Engaged in cross-industry development discussions for SAF —e—_—___— {é) EV charging service option for Esso and Mo
Slide 22: Pathways to Net Zero Alliance
Pathways to Net Zero Alliance Unprecedented collaboration, resources and progress Pathways Alliance key milestones achieved October 2021 October 2022 Q1 2023 Pathways interim Pore space Commercial negotiation alignment funding agreement evaluation awarded Drilled 2 evaluation wells | | | | l | June
Slide 23: Pathways phase 1
Pathways phase 1 Effective fiscal policies and regulatory framework required for continued phase 1 progress Pathways foundational project schedule with effective fiscal policies and requlatory framework in place 2024 2027 Capital commitment First hub injection to procure pipe (Imperial & others) 202
Slide 24: Continued momentum
Continued momentum Sustainable solutions in support of lower carbon future Canada remains positioned to lead as a sustainable, secure and reliable global energy supplier Imperial on track to meet 2023 climate goal Plans identified to achieve 2030 goals and net zero emissions by 2050, requiring: Supp
Slide 25: Upstream outlook
/ / j / Upstream outlook Simon Younger Senior vice-president, upst
Slide 26: Upstream strategy
Upstream strategy Best-in-class producer, maximizing cash flow, positioning for a lower carbon future Maximize value from long-life, low-decline assets Targeting industry-leading unit cash cost and reliability Select, disciplined capital investments Lowering emissions through profitable investments
Slide 27: 2022 Upstream performance
2022 Upstream performance Continued strong operational performance and foundation for future success Kearl Recovered from extreme cold weather, record performance in 2H Continued Autonomous Haul ramp-up, converting entire mine to autonomous operating zone (65 trucks converted by year end) Second Boi
Slide 28: Kearl winterization strategy
Kearl winterization strategy Maintaining reliability through extreme winter conditions Comprehensive response to 2022 extreme cold weather Analysis and learnings used to enhance winter operating procedures Early maintenance to ensure reliability and availability of resources during winter months Str
Slide 29: Long-life, low-decline asset base
Long-life, low-decline asset base High-quality stable production base; focused on GHG-advantaged growth Production koebd 500 Multi-decade production profile 400 Low sustaining capital 300 ~3.8 billion boe of proved and probable reserves 508 410 - 430 koebd production outlook for 2023 50 17% low cost
Slide 30: Upstream cash flow outlook
Upstream cash flow outlook Delivering value and strengthening cash flow from operating activities Average annual cash from operating activities $B ‘ Strong cash flow in 2022 i Outlook for robust cash flows across a range of price cases 4 Pipeline of highly accretive investments A Focused on industry
Slide 31: Upstream investment outlook
Upstream investment outlook Investing for value through select volume growth and GHG intensity reduction Average annual capital expenditures’ SB 15 ' See supplemental information for definition 2022 2023 Sustaining mGrowth/GHG @ Prior outlook 2024-2027 Sustaining capital moderates from 2022 5-year a
Slide 32: Industry-leading digital initiatives
Industry-leading digital initiatives Accelerating value with a continually expanding digital portfolio Digital investment principles: « Capital-efficient » Fast payback » Agile development >$1.1B Near-term focus and wins > 40 successful initiatives Optimizing production and GHGi Improving reliabilit
Slide 33: Digital tools in operations
Field surveillance \ platform, enhanced sensors, enabling production a optimization i Full sites laser scanned, connected data at our fingertips Analytics and software to optimize production & uptime Leveraging analytics and Al to make better decisions Schedule optimization and digitally enabled tec
Slide 34: Kearl performance
Kearl performance Building on a decade of improvement Production and unit cash costs’ kbd $US/bbI 300 Extreme cold a weather Recovered from extreme cold weather in 30 1H ‘22 with strong performance in 2H a Highest single day production 360 kbd on Dec. 29 20 Best-ever 2H production, 278 kbd 400 2u Co
Slide 35: Kearl journey
Kearl journey Optimization phase continuing kbd 300 ces bled rag aa =! On track to deliver 280 kbd in 2024 Reliability and maintenance improvements : 5 - Improved recovery through digital and crusher enhancements 242 200 Evaluating opportunities to increase to 300 kbd in future 2022 Reliability Reco
Slide 36: Autonomous haul update
Autonomous haul update First fully autonomous oil sands mining operator May 2022 converted full mine pit to autonomous operating zone Step change safety improvement Continuously raising the bar on daily mine material movement records 65 haul trucks converted to date, with remaining trucks expected t
Slide 37: Cold Lake performance
Cold Lake performance Performance exceeding expectations and sustainable into the future Production performance kbd 150 Highest annual production since 2018 Strong performance from new Mahihkan infills (~8 kbd) Continued optimization and reliability enhancements (~ 2kbd) Continued innovative compact
Slide 38: Cold Lake strategy
Cold Lake strategy Maximize asset value and cash flow through transformational GHG strategy Transition to lower emission profile kbd @Base @LASER @GRP1 @LemingSAGD mFutureSA-SAGD mCSP 150 100 50 o 2020 2023 2026 2030 Next generation technology GHGi' j In-Situ industry GHGi average css LASER SAGD SA-
Slide 39: Key Cold Lake volume sustainment investments
Key Cold Lake volume sustainment investments Progressing capital-efficient, economically attractive projects to sustain strong production Grand Rapids Phase 1 Leming SAGD Future SA-SAGD 15 kbd advantaged production 9 kbd advantaged production at peak 50 kbd advantaged production by 2030 40% GHGi red
Slide 40: Cold Lake carbon capture and storage (CCS)
Cold Lake carbon capture and storage (CCS) Efficient emissions reduction, supporting Cold Lake strategy transformation @ Imperial Kearl Pursuing CCS emissions reduction opportunity that captures efficiencies with Cold Lake operations Fort McMurray Geographically and geologically advantaged to be an
Slide 41: Syncrude update
Syncrude update Building momentum following operator transition Production kbd 80 © Capturing value through owner-operator model $300M in efficiencies achieved to date, evaluating further synergies * Increased asset utilization through improved reliability and interconnect pipeline Best-ever total p
Slide 42: Future resource optionality
Future resource optionality Portfolio of growth opportunities with net zero potential EBRT Overview Large inventory of in situ opportunities Aspen, Corner, Clarke Creek, Clyden Strategic approach to future development Maintain optionality while evaluating next generation in situ technologies Promisi
Slide 43: Upstream summary
Upstream summary Best-in-class producer, maximizing value, positioning for a lower carbon future Maximizing value from existing assets Robust cash flow across a range of price outlooks, resilient at low prices Investing for value through select volume growth and GHG intensity reduction Industry-lead
Slide 44: Break
ess Imperial ee O oD) _— ‘aa
Slide 45: Downstream and Chemical outlook
Downstream and Chemical outlook Jon Wetmore Vice-president, downstream
Slide 46: Downstream and Chemical strategy
Downstream and Chemical strategy Increasing profitability across the value chain Deliver industry-leading performance in safety, reliability and operations integrity Strategically invest in logistics to expand market reach, reduce costs and improve supply reliability Enhance world-class Esso and Mob
Slide 47: Structurally advantaged Canadian margin environment
Structurally advantaged Canadian margin environment Robust margins throughout the commodity cycle Average gasoline crack $US/bbI 80 60 Advantaged logistics 40 O 2022 Avg 2012-2021 Avg 1 US Gasoline Crack CDN Gasoline Crack Proximity to crude Average diesel crack $US/bbI 80 60 40 Import parity market
Slide 48: Canadian fuel demand update
Canadian fuel demand update Robust liquid fuel demand for decades © Significant gasoline demand through 2035 Advantaged refining, logistics and branding allows for growth in gasoline market share through 2035 Continued advantage in coast-to-coast ethanol distribution Strong EV growth expected FLO pa
Slide 49: Canadian refining
Canadian refining Canada’s largest refiner with access to global technology Refinery throughput and utilization © Structurally advantaged refining business ia Largest domestic refiner, strategically located assets 450 100% Fully integrated Chemical plant for optimized molecule uplift Sy Low overall
Slide 50: Fuel, lubricant and asphalt marketing
Fuel, lubricant and asphalt marketing Industry-leading brands and product offering creates customer pull Retail branded wholesale model provides structural advantages Industry-leading site count with ~2,400 sites across Canada Targeting capital efficient market share growth Strategic partnerships wi
Slide 51: Strathcona renewable diesel project
Strathcona renewable diesel project Building Canada’s largest renewable diesel (RD) facility Scope 20 kbd renewable diesel production at Imperial Strathcona Refinery ~3 MT annual CO2 reduction in transportation sector compared to conventional fuels" Status Final Investment Decision approved $720M pr
Slide 52: Strathcona renewable diesel project economics
Strathcona renewable diesel project Advantaged project is value accretive Increasing demand for renewable diesel in Canada Layered Canadian and British Columbia regulations! create demand for lower carbon intensity (Cl) transportation Fuels Growing demand for renewable diesel as drop in fuel to supp
Slide 53: Innovation delivers shareholder value
Innovation delivers shareholder value Further enhancing Imperial’s advantage with innovative solutions and technologies Advanced recycling Transforming plastic waste into valuable products at scale Evaluating potential opportunity at Sarnia site Leveraging ExxonMobil technology and expertise Targeti
Slide 54: Downstream investments
Downstream investments Strategic investments in low-capital, high-return business Average annual capital expenditures’ $M 600 Increase in growth spend due to Strathcona RD project 400 at Continuing selective investing in refinery slate, production efficiency and resiliency 0 2022 2023 2024-2027 : Fa
Slide 55: Downstream profitability
Downstream profitability Resilient business model, focused on increasing profitability Annual net income $B 4 om Resilient, reliable performance across the cycle © Expanding geographic reach enabling record refinery utilization and profitability in 2022 w © Fully integrated, flexible business model
Slide 56: Advantaged chemicals business
Advantaged chemicals business Positioned for income generation throughout the commodity cycle Annual net income $M 2 400 Integration with refinery and upstream 300 Proximity 6 to feeds and market 100 Premium Products y to meet specific customer needs 0) 2012 2013 2014 2015 2016 2017 2018 2019 2020 2
Slide 57: Chemicals — integration and proximity
Chemicals — integration and proximity Advantaged integration, located near customers and feedstock Fully integrated, flexible business model Integration provides leading cost structure and profitability advantages Heavy integration with Sarnia and Nanticoke refineries “Day Marcellus Supplier of spec
Slide 58: Chemicals - premium products
Chemicals - premium products Meeting customer needs with consistent, high-quality, differentiated products Produce high-density polyethylene (HDPE) for rotational and injection molding applications End product uses are mostly durables, not single-use plastics Intimate customer relationships Resins d
Slide 59: Imperial's Downstream and Chemical advantage
Imperial’s Downstream and Chemical advantage —— Sustainably advantaged assets, brands and products Canadian domestic fuel markets benefit from advantaged margins Strategically located, highly-integrated assets with low sustaining capital requirements Portfolio of superior brands and products fosteri
Slide 60: Financial outlook
/ / j / Financial outlook Dan Lyons Chief financial officer
Slide 61: Financial profile
Financial profile Resilient business model with upside leverage 10- h flow fi rating activiti See ee Cree a eee © Integrated, advantaged business model Upstream: low-cost growth, long-life low decline assets Downstream: advantaged margins and logistics hemicals: integration, proximil remium ucts Ber
Slide 62: 2022 results summary
2022 results summary Achieved record performance while strengthening core businesses Annual cash flows from operating activities $B - - 12 Strongest year in company history Highest ever Downstream utilization Highest ever second half Kearl production Record earnings and cash flow Record cash distrib
Slide 63: Cash operating costs
Cash operating costs Energy prices drove increased operating costs Annual cash operating costs! $B 2 © Key drivers of increased operating costs 50% increase in energy cost with rising commodity prices 5% average inflationary pressure on non-energy costs © Laser-focused on lowering unit cash operatin
Slide 64: Capital expenditure forecast
Capital expenditure forecast Low sustaining capital, attractive growth investments Annual capital expenditure’ forecast $B 2 o 4 I. u 2022 2023 2024 2025 2026 2027 @ Sustaining § Growth/GHG ‘Prior outlook ' See supplemental information for definition Sustaining capital represents anticipated spendin
Slide 65: Capital allocation priorities
Capital allocation priorities Committed to returning surplus cash to shareholders Dividend per share (paid basis) and shares outstanding $ Millions of shares 2.00 1,000 1.00 750 m= | 2017 2018 2019 2020 2021 2022 fmm Dividend paid © Shares outstanding Shareholder payout, 5 year average % of cash flo
Slide 66: Free cash flow
Free cash flow Financial discipline and capital efficient volume growth support free cash flow outlook Annual cash distributions Free cash flow’? profile $B $B 8 8 6 6 4 4 | | J il 0 _ ool 2016-20 Avg 2021 2022 $60 $70 $80 $90 $100 mDividend m™ Buyback $US WTI | Non-GAAP financial measure — see supp
Slide 67: Corporate guidance
Corporate guidance 2023 Annual Guidance! 2023 Turnaround Schedule Total Capex $B Upstream Production kboed Kearl kbd (gross) Cold Lake kbd Syncrude kbd Refinery throughput kbd Refinery utilization % "Production is mperiol stare, belie royalties except Kear! whic is. 100% grass bask: 17 410-430 265 -
Slide 68: Brad Corson
Brad Corson Chairman, president & chief executive Imperial | 2023 a
Slide 69: A disciplined strategy
A disciplined strategy Maximizing shareholder value Continue to focus on existing asset base Optimization and debottlenecking, getting the most out of our existing assets Value accretive opportunistic growth Disciplined financial management Target industry-leading cost structure Remain robust throug
Slide 70: Confidence in the future
Confidence in the future High quality, long life, low decline upstream assets Continued growth through focus on optimization, debottlenecking Advantaged downstream assets Integrated across value chain Low cost, high return growth Progressing value accretive projects, maintaining optionality Driving
Slide 71: Q&A
ess Imperial QsA
Slide 72: For more information
ess Imperial For more information: Dave Hughes Vice-president, investor relations +1 587.476.4743 [email protected] imperialoil.ca twitter.com/ImperialOil linkedin.com/company/Imperial-Oil youtube.com/ImperialOil facebook.com/ImperialOilLimited ©0600
Slide 73: Cautionary statement
g Cautionary statement Forward statements: ‘Statements of future events or conditions in this report, including projections, goals, expectations, estimates, business plans and descriptions of strategic and emission reduction goals are forward-looking statements, Similarly, emission-reduction pathway
Slide 74: Cautionary statement
o Cautionary statement These factors include global, regional ar local changes in supply and demand for oil, natural gas, petroleum and petrochemical products, feedstocks and other market factors, economic conditions or seasonal fluctuations and resulting demand, price, differentia! and margin impac
Slide 75: Cautionary statement
6g Cautionary statement In these materials, certain natural gas volumes have been converted ta barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation, A BOE conversion ratio of 6 Mcfto one bbl js bas
Slide 76: Supplemental information
oB Supplemental information Debt-to-capital ratio Debt, defined as the sum of “Notes and loans payable” and “Long-term debt”, divided by capital, defined as the sum of debt and "Total shareholders! equity" Capital and exploration expenditures Capital and exploration expenditures (or capital expendit
Slide 77: Supplemental information
Bg Supplemental information Cash operating costs (Cash costs) Cash operating costs is a non-GAAP financial measure that consists of total expenses, less Purchases of crude oil and products, Federal excise taxes and fuel charge, Financing and costs that are-non-cash in nature, including Depreciation
Slide 78: Supplemental information
6B Supplemental information Unit cash operating costs (Unit cash costs) Unit cash operating costs is a non-GAAP ratio, Unit cash operating costs (unit cash costs) is calculated by dividing cash operating costs by total gross oil-equivalent production, and is calculated for the Upstream segment, as w
Slide 79: fe i oD a. £
fe 0 i oD a. £