Imperial Oil Limited · TSX:IMO
Imperial Oil — Investor Day (November 2017)
35 slides from Imperial Oil's investor day presentation, Nov 1, 2017
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): November 1, 2017 IMPERIAL OIL LIMITED (Exact name of registrant as specified in its
Slide 2: Item 7.01 Regulation FD Disclosure
Item 7.01 Regulation FD Disclosure On November 1, 2017, Rich Kruger, the Company’s chairman, president and chief executive officer, and Dave Hughes, the Company’s investor relations manager, hosted a call to update investors on the Company’s business strategy, operations and major projects (the “Pre
Slide 3: Exhibit 99.1
~> 7 Imperial Exhibit 99.1
Slide 4: Cautionary statement
Cautionary statement Statements of future events or conditions in this report, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Actual future financial and operating results, including demand growth and energy source mix; production growth a
Slide 5: Global energy outlook
Global energy outlook Demand expected to increase 25% by 2040, oil and gas to remain key Liquids production, mbd 120 * +5% annual base decline 60 80% of 2040 demand from new supplies > Existing Supplies needed from multiple sources 0 Requires major ongoing investment 2015 2040 Source: International
Slide 6: Canada's opportunity
Canada’s opportunity Uniquely positioned to meet demand, requires global competitiveness Oil reserves, billion barrels 300 » Stable, trade-driven economy 200 » World scale resources 100 » High regulatory standards 0 o » Technology key to growth Source: 2017 BP Statistical Review Imperial | 2017 | 4
Slide 7: Imperial's winning formula
Imperial’s winning formula Increase cash flow, deliver industry-leading returns throughout the cycle <all Deliver industry leading performance in reliability, safety and operations integrity Leverage technology, integration and ExxonMobil to differentiate versus competition Continue to achieve impro
Slide 8: Enhancing our portfolio
Enhancing our portfolio Focusing on highest value assets and core competencies Acquired Startup of Startup of Cold Commissioned Startup of | Rebranding Husky Rebranding 200+ interest in first phase Lake Nabiye Edmonton rail secondphase truck transport _retail sites under Celtic assets at Kearl expan
Slide 9: Scope of operations
Scope of operations Nationwide leadership across the full value chain wat py ee cater F&L marketing Kearl mining Distribution network | Syncrude mining Cold Lake in situ Rail terminal - Renteake refi inery Imperial | 2017 | 7
Slide 10: Upstream assets
Upstream assets Large, long-life predominantly oil sands portfolio Kearl Os Mining - PFT 71% interest Syncrude Mining - upgrader 25% interest Cold Lake In situ- CSS 100% interest 1Gross production, IMO share Production, koebd' i Kear! 500 Syncrude Ml Cold Lake = ® Total production ot . Seer Seo? . 4
Slide 11: Cold Lake
Cold Lake Industry-leading in situ operation with continued growth potential Production, kbd" 200 160 » History of strong performance i » Recent growth with Nabiye start-up “ » 160 kbd near-term average A » <$12/bbl US cash opex, % energy 2014 2015 2016 YTD17 MM Base production Ml Growth 1Gross prod
Slide 12: Cold Lake enhancement
Cold Lake enhancement Initiatives to further drive performance and offset natural decline Drilling program Wellbore utilization Optimize distribution to Maximize use of existing Add wells to sustain and highest value areas wellbores grow production + LASER application + Enhanced surveillance + Drill
Slide 13: Kearl
Kearl Large, long-life mining operation focused on improving reliability Production, kbd" 200 160 » Producing below design capacity 420 + PFT technology operating as planned + Challenges associated with ore prep 80 » Progressing improvement plan “ + Meet or exceed 220 kbd‘ annual average 0 + Targeti
Slide 14: 2017 reliability improvements
2017 reliability improvements Actions completed to achieve annual production of 200 kbd Flow system Improved ore prep performance + Crushers and dump hoppers + Ore conveyor drive chains + Crusher teeth and bearings Enhanced piping durability + Primary separation cells + Hydro-transport lines + Froth
Slide 15: Ongoing reliability improvements
Ongoing reliability improvements Identified opportunities to increase annual production to 240 kbd Add supplemental crushing capacity + Offset equipment downtime + Create surge bin conveyor redundancy Front-end redundancy Install slurry piping interconnections + Minimize maintenance impacts + Abilit
Slide 16: Syncrude
Syncrude High-potential asset with priority on eliminating one-time events Production, kbd" 90 . . » Unplanned downtime reduction + Rigorous inspection, maintenance plans + “Bad actor” performance improvement - » Leverage collective capabilities + Operational and administrative synergies + Best prac
Slide 17: Production, koebd
Production, koebd' 400 350 300 250 200 a7; 2017e 1Gross production, IMO share 2018e Eliminate one-tim e events at Syncrude Imperial | 2017 | 15
Slide 18: Upstream resources
Upstream resources Large, high quality resource base offers significant potential In situ SA-SAGD, CSP, other technologies Mining Non-aqueous extraction Unconventional Liquids-rich natural gas assets A Year-end 2016 resource base, billion boe’ 16 12 30+ year proved reserve life? 8 Probable 4 Proved
Slide 19: In situ growth
In situ growth Technology key to meeting economic and environmental objectives Pilot results, indexed 100 50 Projects under regulatory review SAGD rcp + Aspen: 2 phases, 75 kbd each 0 Capital intensity Cumulative SOR + Cold Lake Expansion: 1 phase, 55 kbd GHG intensity, indexed’ gy industry 100 I Im
Slide 20: Unconventional growth
Unconventional growth Completed asset evaluations and acquisitions of contiguous acreage Celtic aeauisition Yoho acreage anil Trilogy ee acquisition Resource assessment: seismic evaluation, exploratory drilling, subsurface analysis Montney Basin » Duvernay and Montney optionality Edmonton Duvernay B
Slide 21: Leveraging operational excellence and integration to capture market value
Leveraging operational excellence and integration to capture market value Strathcona refinery Capacity 191 kbd Sarnia refinery Capacity 119 kbd Nanticoke refinery Capacity 113 kbd Fuels marketing Leading marketer in all products O GGG Volumes’, kbd 500 Petroleum product sales 250 0 2007 2012 2017 $8
Slide 22: Refining performance
Refining performance Relentless pursuit of reliability and profitability Utilization, % Regretted loss, % 100 10 » Global best practices + Equipment strategies + Maintenance planning 5 + Turnaround execution » Enhancing profitability + Disciplined cost management 0 + Optimized economic sparing + Int
Slide 23: Competitive ranking
Competitive ranking Leading refining performance in North America, top-tier in Canada Performance —_ Energy Non-energy Total Net cash quartiles efficiency cash opex cost margin " ~ | «| & ans ae ~|@ | @ e Ath ¥K& Imperial refineries @ Canadian industry ex. Imperial Source: 2016 Solomon survey, inclu
Slide 24: Strathcona refinery cogeneration
Strathcona refinery cogeneration Improve energy efficiency, reduce GHGs and lower operating costs Supports energy efficiency objectives + Similar facilities in use at other operations + Sarnia refinery / Cold Lake / Kearl / Syncrude + Significant net GHG emissions reduction $250 million project adva
Slide 25: Downstream synergies
Downstream synergies Value captured through integrated manufacturing and marketing plans Fuels and lubricants Premium customer offering + Quality brands and loyalty programs + Coast to coast supply and customer support + Global leadership in product R&D Superior position in core markets + Uniquely s
Slide 26: Fuels marketing
Fuels marketing Aggressively capturing new business and meeting customer needs Strategic nationwide accounts + Introduction of Synergy fuels + Conversion of Husky truck + Leverage supply chain strength nationwide transport network to Esso brand to expand into new markets + Conversion of former Lobla
Slide 27: Chemical
Chemical Highly profitable business, leader in North American polyethylene Specialty customers and products Operational excellence + Facility integrated with Sarnia refinery + Proximity to major customers Enhancing profitability + Investment in new gas cracker furnace + 90% cost advantaged feedstock
Slide 28: Financial performance
Financial performance Demonstrating value of integration throughout the business cycle Cash from operating activities, $ billion Five-year average’, % 5 4 6) 2 2012 2013 2014 2015 2016 YTD17 1 For the five year period ended December 31, 2016 Imperial | 2017 | 26
Slide 29: Financial strength
Financial strength Strong balance sheet, optionality and priority access to financial markets 2Q17 debt to capital, % 50 » Leverage XOM relationship 7 » Borrow on most attractive terms » Maintain capital structure flexibility 0 CNQ CVE SU - HSE IMO BBB+ _ BBB A- BBB+ AAt Ratings" . *Based on S&P Glo
Slide 30: Dividends
Dividends Committed to paying shareholders a reliable and growing dividend Annual dividend Quarterly average per share’, C$ WTI, US$/bbI 0.75 125 100 ‘ _ » 100+ years of consecutive payment ; 75 50 23 years of consecutive growth 0.25 25 ~ 6.5% 10-yr compounded growth rate hl ——EEeere oe 0 1997 2007
Slide 31: Share buybacks
Share buybacks History of returning cash to shareholders and preserving value Shares outstanding, millions‘ 2,000 4,500 » Repurchased 50% of shares since 1995 4,000 » Expanded buyback program June 2017 + Increased NCIB to 3% shares outstanding 500 » Returned ~$375M year-to-date 1995 3Q17 ‘Adjusted f
Slide 32: Financial resilience
Financial resilience Strength provides flexibility under a range of oil prices 2017-21 annual average, C$ billion § 4 . . » Ability to meet highest priorities 3 5 $50 & Significant cash flow leverage 1 Sustaining » Flexibility for new opportunities 0 Dividend' Dividend Cash flow and capex from opera
Slide 33: Why Imperial?
Why Imperial? Distinct competitive advantages that deliver long-term value Growth opportunities Large inventory of opportunities to support future upstream growth Sy Asset base High quality, long-life assets across the portfolio Operational excellence Technical, operational and financial risk manage
Slide 34: Question period
Slide 35: For more information
is Imperial For more information: Dave Hughes Manager, Investor Relations +1 587.476.4743 [email protected] imperialoil.ca ry] twitter.com/ImperialOil (1) linkedin.com/company/ImperialOil youtube.com/ImperialOil