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Imperial Oil profit climbs on higher refining margins

Bruce March, president and CEO of Imperial Oil, addresses the company's annual meeting in Calgary, Thursday, April 28, 2011.

Jeff McIntosh/THE CANADIAN PRESS

Imperial Oil Ltd. says higher margins at its refineries were the main reason for a 21 per cent jump in its third-quarter profit, handily beating analysts' expectations.

The Calgary-based integrated energy company says its net income during the three-month period rose to $1.04-billion or $1.22 per diluted share, compared to $859-million or $1.01 a share for the same period last year.

Imperial says the increase was primarily due to higher margins at its refineries.

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Total revenues came in at $8.3-billion for the quarter compared to $7.9-billion year over year.

Imperial's results beat expectations by a wide margin. Analysts polled by Thomson Reuters were expecting the company to earn $1.09 per fully reported share and post revenues of about $7.4-billion.

Imperial is majority owned by Houston-based energy heavyweight ExxonMobil Corp.

Construction on Imperial's $10.9-billion Kearl project is on track to start up by the end of this year.

Last year, Imperial's board of directors approved an $8.9-billion expansion that will begin producing 110,000 barrels per day by late 2015.

When the Calgary-based firm announced in 2009 that it would build the Kearl mine, it expected three phases of roughly the same size. Later, it decided to instead build the mine in two phases, with smaller projects along the way to boost output in increments.

Imperial and its parent are in the early stages of weighing a liquefied natural gas export terminal on Canada's West Coast in order to get a better price for the gas it produces in province's northeast.

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The acreage Imperial has in the Horn River Basin contains dry gas, which can fetch a price several times higher in Asia than it could in North America, which is awash in supplies.

ExxonMobil recently announced a deal to buy Calgary-based natural gas producer Celtic Exploration Ltd. for $3.1-billion. Imperial Oil isn't part of the deal, but is evaluating the opportunity to take on a 50 per cent stake in the future.

Imperial has vast steam-driven oilsands operations at Cold Lake, a 25 per cent stake in the Syncrude Canada oilsands mine, a handful of refineries across Canada and a chain of Esso-branded fuel stations.

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