Analyst Note| Joe Gemino, CPA |
No-moat Imperial Oil reported strong fourth-quarter cash flow that exceeded our expectations and continued the firm’s upward trend. After adjusting for its working capital, Imperial generated CAD 534 million in adjusted operating cash flow, compared with using CAD 390 million in the third quarter. The higher cash flow was driven by increased upstream production volume and downstream income. Imperial reported fourth-quarter upstream production volumes of 460 thousand barrels of oil equivalent per day, up 25% sequentially. The higher production levels were driven by record volumes at the Kearl mining project after the Polaris pipeline was placed back into service.