Imperial Oil's Q2 profit drops

Imperial Oil Ltd. saw its second-quarter profit tumble more than 80 per cent, the company said Thursday.

That means the crude producer joins a growing list of oil pumpers that experienced sharp earnings reductions, mainly due to a starkly lower price for the Texas tea.

Calgary-based Imperial made $209 million for the three months ended June 30. That translated into earnings of 25 cents a share for the period.

For the same April-to-June period one year earlier, Imperial posted a profit of $1.15 billion, or $1.28 a share.

"Sharply lower oil and natural gas prices continued to create challenging business conditions," said Bruce March, Imperial's chairman, president and chief executive officer.

For the second quarter, Imperial gained revenue of $5.3 billion, down 38 per cent from $8.6 billion one year earlier.

Imperial Oil suffered from the same problem as have many oil producers during the most recent quarter — crude prices well below last year's levels.

For example, the company, which is owned 69.6 per cent by Exxon Mobil Corp., sold oil for an average price of $59.79 US a barrel in the second three months of the fiscal year.

That level was more than 50 per cent lower compared to Imperial Oil's average selling price in the second quarter of 2008.

In addition, Imperial Oil pumped less crude because of the recession, 223,000 barrels per day compared to 246,000 for the same period last year, a drop of nine per cent.

Thus, selling less oil accounted for a tiny portion of Imperial Oil's revenue drop versus a lower price for each barrel of crude.

Imperial Oil is the latest crude pumper that has seen its results slide as a result of falling oil values.

Petro-Canada and Exxon Mobil both saw their profits plunge in earnings reports in the same week.