Latest news with #ImperialOil
National Post
3 days ago
- Business
- National Post
Oil and gas leaders hear Carney's 'partnerships' pitch to make Canada an energy superpower
Prime Minister Mark Carney sat down with oil and gas executives in Calgary Sunday to discuss partnerships and to get their input for his plans to make Canada an energy superpower. Article content Article content Carney, in his first visit to Calgary since being sworn in as prime minister, held a closed-door roundtable with more than two dozen members of the energy sector. Article content Attendees included Tourmaline Oil CEO Michael Rose, Pathways Alliance President Kendall Dilling, ATCO CEO Nancy Southern, Imperial Oil President John Whelan and Jon McKenzie, president of Cenovus Energy. Article content Article content 'Thank you for convening on a Sunday morning and also for what you've all been doing to help build our country…build our economy, build a future,' Carney said. Article content 'I'd like to thank a number of you who wrote directly to me a month or so ago and I felt it would be best to get together and discuss it in much more detail than through an exchange of letters given the importance of the issues.' Thirty-eight CEOs of Canadian energy companies signed a letter congratulating Carney on his April 28 election win and pitching policy measures they say would help the prime minister make good on his promise to build the fastest-growing economy in the G7. Article content That would include scrapping the federal emissions gap on oil and gas producers and repealing industrial carbon pricing to help bolster the industry. Article content The CEOs want an overhaul of the Impact Assessment Act, which sets out the process for assessing major projects, and of the Oil Tanker Moratorium Act, which bans oil tankers carrying more than 12,500 metric tons of crude from stopping along parts of British Columbia's coastline. Article content Article content Carney campaigned on expediting reviews of major energy infrastructure projects. He promised before the election to move forward with a 'one project, one review' approach by recognizing assessments conducted by the provinces and territories. Article content The federal government unveiled its proposed emissions cap regulations late last year. They would compel upstream oil and gas operations to reduce emissions to 35 per cent below where they were in 2019 by sometime between 2030 and 2032. Article content 'Partnership is a theme for our discussion this morning,' Carney said, accompanied by Energy Minister Tim Hodgson, Dominic LeBlanc, the minister responsible for Canada and U.S. trade and Emergency Management Minister Eleanor Olszewski. Article content 'It's a critical time for our country. The world's certainly more divided and dangerous, and the imperative of making Canada an energy superpower in all respects has never been greater. We will do everything we can at the federal government level to support those partnerships.'
CBC
3 days ago
- Business
- CBC
Carney discusses "partnerships" with oil and gas executives in Calgary
Prime Minister Mark Carney sat down with oil and gas executives in Calgary Sunday to discuss partnerships and to get their input for his plans to make Canada an energy superpower. Carney, in his first visit to Calgary since being sworn in as prime minister, held a closed door roundtable with more than two dozen members of the energy sector. Attendees included Tourmaline Oil CEO Michael Rose, Pathways Alliance President Kendall Dilling, ATCO CEO Nancy Southern, Imperial Oil President John Whelan and Jon McKenzie, president of Cenovus Energy. Reporters were only allowed to hear a few comments from the prime minister before being asked to leave the room at the Harry Hays building. "Thank you for convening on a Sunday morning and also for what you've all been doing to help build our our economy, build a future," Carney said. "I'd like to thank a number of you who wrote directly to me a month or so ago and I felt it would be best to get together and discuss it in much more detail than through an exchange of letters given the importance of the issues." Thirty-eight CEOs of Canadian energy companies signed a letter congratulating Carney on his April 28 election win and pitching policy measures they say would help the prime minister make good on his promise to build the fastest-growing economy in the G7. That would include scrapping the federal emissions gap on oil and gas producers and repealing industrial carbon pricing to help bolster the industry. The CEOs want an overhaul of the Impact Assessment Act, which sets out the process for assessing major projects, and of the Oil Tanker Moratorium Act, which bans oil tankers carrying more than 12,500 metric tons of crude from stopping along parts of British Columbia's coastline. Carney campaigned on expediting reviews of major energy infrastructure projects. He promised before the election to move forward with a "one project, one review" approach by recognizing assessments conducted by the provinces and territories. The federal government unveiled its proposed emissions cap regulations late last year. They would compel upstream oil and gas operations to reduce emissions to 35 per cent below where they were in 2019 by sometime between 2030 and 2032. "Partnership is a theme for our discussion this morning," Carney said, accompanied by Energy Minister Tim Hodgson, Dominic LeBlanc, the minister responsible for Canada and U.S. trade and Emergency Management Minister Eleanor Olszewski. "It's a critical time for our country. The world's certainly more divided and dangerous and the imperative of making Canada an energy superpower in all respects has never been greater. We will do everything we can at the federal government level to support those partnerships." Alberta Premier Danielle Smith was asked on her weekend radio show if she was concerned that the federal throne speech didn't include a mention of pipelines. "He may not have said the words 'oil and gas' and he may not have said the word 'pipeline,' but conventional energy means oil and gas, and the only way to get it to market efficiently is through pipelines," said Smith, who says she's hoping for a one-on-one with Carney at Monday's First Ministers conference in Saskatoon. Smith also praised Carney for being more willing to engage with the premiers on issues of national importance than his predecessor Justin Trudeau. She was coy when asked about consequences if Carney doesn't deliver, saying she prefers to be optimistic. Carney also took a moment on Sunday to thank the Department of National Defence, the provinces of Manitoba, Saskatchewan and Alberta, and volunteers involved in fighting extensive wildfires and co-ordinating large-scale evacuations.
Yahoo
3 days ago
- Business
- Yahoo
Carney discusses "partnerships" with oil and gas executives in Calgary
CALGARY — Prime Minister Mark Carney sat down with oil and gas executives in Calgary Sunday to discuss partnerships and to get their input for his plans to make Canada an energy superpower. Carney, in his first visit to Calgary since being sworn in as prime minister, held a closed door roundtable with more than two dozen members of the energy sector. Attendees included Tourmaline Oil CEO Michael Rose, Pathways Alliance President Kendall Dilling, ATCO CEO Nancy Southern, Imperial Oil President John Whelan and Jon McKenzie, president of Cenovus Energy. Reporters were only allowed to hear a few comments from the prime minister before being asked to leave the room at the Harry Hays building. "Thank you for convening on a Sunday morning and also for what you've all been doing to help build our our economy, build a future," Carney said. "I'd like to thank a number of you who wrote directly to me a month or so ago and I felt it would be best to get together and discuss it in much more detail than through an exchange of letters given the importance of the issues." Thirty-eight CEOs of Canadian energy companies signed a letter congratulating Carney on his April 28 election win and pitching policy measures they say would help the prime minister make good on his promise to build the fastest-growing economy in the G7. That would include scrapping the federal emissions gap on oil and gas producers and repealing industrial carbon pricing to help bolster the industry. The CEOs want an overhaul of the Impact Assessment Act, which sets out the process for assessing major projects, and of the Oil Tanker Moratorium Act, which bans oil tankers carrying more than 12,500 metric tons of crude from stopping along parts of British Columbia's coastline. Carney campaigned on expediting reviews of major energy infrastructure projects. He promised before the election to move forward with a "one project, one review" approach by recognizing assessments conducted by the provinces and territories. The federal government unveiled its proposed emissions cap regulations late last year. They would compel upstream oil and gas operations to reduce emissions to 35 per cent below where they were in 2019 by sometime between 2030 and 2032. "Partnership is a theme for our discussion this morning," Carney said, accompanied by Energy Minister Tim Hodgson, Dominic LeBlanc, the minister responsible for Canada and U.S. trade and Emergency Management Minister Eleanor Olszewski. "It's a critical time for our country. The world's certainly more divided and dangerous and the imperative of making Canada an energy superpower in all respects has never been greater. We will do everything we can at the federal government level to support those partnerships." Alberta Premier Danielle Smith was asked on her weekend radio show if she was concerned that the federal throne speech didn't include a mention of pipelines. "He may not have said the words 'oil and gas' and he may not have said the word 'pipeline,' but conventional energy means oil and gas, and the only way to get it to market efficiently is through pipelines," said Smith, who says she's hoping for a one-on-one with Carney at Monday's First Ministers conference in Saskatoon. Smith also praised Carney for being more willing to engage with the premiers on issues of national importance than his predecessor Justin Trudeau. She was coy when asked about consequences if Carney doesn't deliver, saying she prefers to be optimistic. Carney also took a moment on Sunday to thank the Department of National Defence, the provinces of Manitoba, Saskatchewan and Alberta, and volunteers involved in fighting extensive wildfires and co-ordinating large-scale evacuations. "The good news is those are proceeding well at this stage but of course it's not over until it's over and we're at the start of the forest fire season across the country," he said. "So we'll stay committed to doing everything that we can with partners." _With files from Rob Drinkwater in Edmonton This report by The Canadian Press was first published June 1, 2025. Bill Graveland, The Canadian Press
Yahoo
28-05-2025
- Business
- Yahoo
Imperial Oil Limited's (TSE:IMO) Intrinsic Value Is Potentially 95% Above Its Share Price
Imperial Oil's estimated fair value is CA$195 based on 2 Stage Free Cash Flow to Equity Imperial Oil is estimated to be 49% undervalued based on current share price of CA$99.97 Our fair value estimate is 95% higher than Imperial Oil's analyst price target of CA$100 In this article we are going to estimate the intrinsic value of Imperial Oil Limited (TSE:IMO) by taking the expected future cash flows and discounting them to today's value. The Discounted Cash Flow (DCF) model is the tool we will apply to do this. Believe it or not, it's not too difficult to follow, as you'll see from our example! We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (CA$, Millions) CA$4.07b CA$3.63b CA$4.25b CA$3.99b CA$3.95b CA$3.96b CA$4.00b CA$4.05b CA$4.12b CA$4.20b Growth Rate Estimate Source Analyst x9 Analyst x9 Analyst x5 Analyst x4 Analyst x3 Est @ 0.20% Est @ 0.89% Est @ 1.37% Est @ 1.71% Est @ 1.94% Present Value (CA$, Millions) Discounted @ 6.0% CA$3.8k CA$3.2k CA$3.6k CA$3.2k CA$3.0k CA$2.8k CA$2.7k CA$2.6k CA$2.4k CA$2.4k ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CA$30b After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.5%. We discount the terminal cash flows to today's value at a cost of equity of 6.0%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = CA$4.2b× (1 + 2.5%) ÷ (6.0%– 2.5%) = CA$124b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$124b÷ ( 1 + 6.0%)10= CA$70b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$99b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of CA$100.0, the company appears quite undervalued at a 49% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Imperial Oil as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.0%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Imperial Oil Strength Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Earnings growth over the past year underperformed the Oil and Gas industry. Dividend is low compared to the top 25% of dividend payers in the Oil and Gas market. Opportunity Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to decline for the next 3 years. Valuation is only one side of the coin in terms of building your investment thesis, and it ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value higher than the current share price? For Imperial Oil, there are three additional aspects you should look at: Risks: As an example, we've found 1 warning sign for Imperial Oil that you need to consider before investing here. Future Earnings: How does IMO's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every Canadian stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Globe and Mail
16-05-2025
- Business
- Globe and Mail
Here's Why Hold Strategy is Apt for Imperial Oil Stock Now
Imperial Oil Limited IMO has experienced a notable 3.3% increase in its share price over the past year, outperforming the broader oil and energy sector, which saw a decline of 7.2%. The company has also outpaced its competitors within the Canadian Oil and Gas Exploration and Production sub-industry, with Cenovus Energy Inc. CVE and Canadian Natural Resources Limited CNQ reporting declines of 32.5% and 19.8%, respectively, during the same time. Such relative strength naturally leads investors to ask: Is this a signal to buy now, or does patience offer a better entry point? 1-Year Price Comparison To answer this, it is important to understand the broader context behind Imperial's momentum. Headquartered in Calgary, IMO is more than just a prominent Canadian oil company, it is a key industry player with a diverse portfolio spanning oil and gas production, refining, marketing and chemical manufacturing. As Canada's largest supplier of jet fuel and a top producer of asphalt, IMO holds a commanding presence in the market. Crucially, this strength is amplified by its deep strategic ties to ExxonMobil XOM, which holds a 69.6% ownership stake, providing IMO with access to global expertise, resources and technology. Basically, the company makes revenues by exploring and extracting oil and gas, refining them into products like gasoline and diesel, and distributing these to its customer base. But what exactly has driven its performance over the past year? Let us explore the key factors driving its success and evaluate whether this momentum can be maintained in the future. Key Factors Boosting Imperial's Market Position Integrated Business Model Mitigates Downside Risks: Unlike pure-play upstream producers, Imperial benefits from vertical integration, combining oil production (Upstream) with refining and marketing (Downstream). In the first quarter of 2025, Downstream earnings surged to C$584 million, up C$228 million from the fourth quarter of 2024, due to strong margin capture, offsetting softer Upstream volumes. This diversification provides resilience against oil price swings, as refining margins often improve when crude prices dip. Shareholder-Friendly Capital Allocation: Imperial has a proven track record of returning capital to its shareholders through dividends and share buybacks. In first-quarter 2025, the company paid C$307 million in dividends and announced plans to renew its Normal Course Issuer Bid, signaling confidence in future cash flows. Historically, Imperial has accelerated buybacks in the second half of the year, providing potential upside for investors. The company's disciplined capital allocation, balancing growth investments (e.g., renewable diesel, Leming SAGD) with shareholder returns, enhances its appeal as a reliable income and growth stock. Strategic Projects With a Renewable Edge: Imperial is advancing key growth projects, including the Leming SAGD development at Cold Lake (expected to add 9,000 barrels per day at peak production) and the Strathcona renewable diesel facility, set to start in mid-2025. The renewable diesel project positions IMO as a leader in Canada's low-carbon fuel transition, aligning with regulatory demands and consumer trends. Additionally, the Enhanced Bitumen Recovery Technology pilot at Aspen could unlock long-term, low-emission production growth. These initiatives demonstrate Imperial's commitment to both traditional energy leadership and sustainable innovation. Efficiency-Driven Cost Reductions: Imperial has made strong progress in cutting costs and improving efficiency, especially at its Cold Lake and Kearl sites. At Cold Lake, the company has lowered its cash costs by more than C$3 per barrel in the first quarter year over year, due to the large part to the success of the Grand Rapids solvent-assisted SAGD (steam-assisted gravity drainage) project. Looking ahead, Imperial plans to reduce costs even further, targeting C$13 per barrel at Cold Lake and C$18 at Kearl. One of the key steps toward this goal is optimizing maintenance schedules. At Kearl, for example, the company has doubled the time between major maintenance shutdowns from every two years to every four. This not only improves efficiency but also helps keep costs down. These efforts show that Imperial is well-positioned to remain profitable, even when oil prices are unpredictable. Strategic Infrastructure Positioning: Imperial benefits from its strategically located assets and integrated infrastructure across Canada. The company owns and operates key pipelines, storage facilities and transportation networks that provide reliable access to markets. This vertical integration helps mitigate midstream bottlenecks that often plague energy producers in Canada. With increasing global demand for reliable energy suppliers, Imperial's established infrastructure provides a durable competitive advantage. Headwinds That Could Weigh on Imperial's Outlook Oil Price and Margin Volatility: Despite strong operational execution, Imperial remains highly sensitive to fluctuations in crude oil prices and refining margins. In first-quarter 2025, the company reported that WTI crude oil prices averaged C$71.42 per barrel, down from C$76.86 in first-quarter 2024. While refining margins have improved year over year, they remain volatile and subject to macroeconomic uncertainty. Additional risks include trade tensions, such as potential U.S.-Canada tariffs. A significant decline in oil prices or a weakening of refining crack spreads could pressure Imperial's earnings and cash flow, potentially affecting its capacity to maintain share buybacks and sustain dividend growth. Operational Risks and Weather-Related Disruptions: Imperial's first-quarter production was impacted by extreme cold weather in February, with Kearl's output falling to 256,000 barrels per day (down by 21,000 barrels year over year). While the company has improved cold-weather protocols, such events highlight the vulnerability of its operations to unforeseen disruptions. Unplanned downtime at Syncrude and maintenance-related throughput reductions in the Downstream segment (refinery utilization at 91% compared with 94% year over year) further highlight operational risks. Lower Bitumen Prices Pressure Upstream Realizations: Imperial experienced weaker realizations in its oil sands operations due to falling bitumen prices, impacting upstream margins. The narrowing of the WTI-WCS spread also added pressure. Unless Canadian heavy oil differentials improve, the company's upstream earnings could remain under pressure, reducing the segment's contribution to total profitability. Heavy Reliance on Commodity Price Environment: Despite downstream strength, Imperial's earnings remain sensitive to commodity prices. Upstream profitability was significantly impacted by lower crude realizations in the first quarter. While downstream margins were strong, any reversal in refining economics or crude spreads could materially affect future performance, highlighting exposure to macro volatility. Limited Exposure to LNG Growth: Unlike some Canadian peers who are investing in Liquefied Natural Gas ('LNG') export projects, Imperial remains focused almost exclusively on oil and refined products. This means the company may miss out on the growing global demand for natural gas as a transition fuel. The lack of LNG exposure could become a relative performance drag as global energy markets evolve. Final Verdict on IMO Stock Imperial benefits from a strong integrated business model, combining upstream production with downstream refining and marketing, which helps reduce the impact of oil price volatility. The company continues to deliver strong shareholder returns through dividends and share buybacks, while advancing key growth and renewable energy projects like the Strathcona renewable diesel facility. Cost reduction efforts and operational efficiency improvements, particularly at Cold Lake and Kearl, position Imperial for long-term profitability. However, the company remains vulnerable to commodity price swings, with first-quarter 2025 upstream margins pressured by lower bitumen prices and WTI-WCS spreads. Additionally, operational risks like weather disruptions and limited exposure to LNG growth may hinder its ability to compete with more diversified peers in the evolving energy landscape. Given this mix of strengths and potential challenges, investors should wait for a more opportune entry point instead of adding this Zacks Rank #3 (Hold) stock to their portfolios. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Zacks Names #1 Semiconductor Stock It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom. With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028. See This Stock Now for Free >> Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Exxon Mobil Corporation (XOM): Free Stock Analysis Report Imperial Oil Limited (IMO): Free Stock Analysis Report Cenovus Energy Inc (CVE): Free Stock Analysis Report Canadian Natural Resources Limited (CNQ): Free Stock Analysis Report This article originally published on Zacks Investment Research (
