Imperial Oil Ltd

Canada, Alberta and five major oil sands producers signed a trilateral Memorandum of Understanding in July 2026 linking expanded production capacity to historic investment in carbon capture and new export infrastructure. Canadian Natural Resources, Suncor Energy, Cenovus Energy, Imperial Oil and ConocoPhillips Canada committed to developing the Pathways Carbon Capture and Storage project, a shared infrastructure initiative targeting approximately 6 million tonnes of CO2 capture annually by 2035, rising to 16 million tonnes per year by 2045. The MOU represents conditional commitments rather than executed projects, with definitive binding agreements targeted for 15 November 2026 that will determine whether fiscal terms make expansion economically viable. Alberta currently produces approximately four million barrels per day, and the provincial government has stated its aspiration to double that figure within a decade, though growth remains contingent on CCS cost allocation, carbon pricing treatment and available subsidies. Final investment decisions on Pathways are not expected until late 2027 or early 2028, and construction could commence as early as September 2027, contingent on all approvals.

Imperial Oil reported second quarter 2026 earnings that exceeded expectations while keeping its quarterly dividend unchanged. The company also lowered its refinery throughput guidance and noted recent operational headwinds. The stock has returned 44.75% year to date, closing at CA$177.04, with a one-year total shareholder return of 54.95%. A popular narrative model suggests a fair value of CA$153.19, implying the stock is overvalued, though its price-to-earnings ratio of 20.6x is slightly below the Canadian Oil and Gas industry average of 21.1x.

Cenovus Energy's integrated business model, combining upstream oil sands production with downstream refining, helps protect profitability as crude prices soften. With WTI settling at $68.69 per barrel on July 2, well below previous war-premium highs above $100, the company leverages its pipeline and transportation network to move crude into premium markets and adjusts refining operations to maximize higher-value product margins. This integrated approach partially offsets the impact of lower crude prices on its upstream segment. Shares of Cenovus have jumped 75.5% over the past year, outperforming the industry's 54.2% gain, and the stock trades at a trailing 12-month EV/EBITDA of 6.16X, below the industry average of 6.49X. Cenovus and Imperial Oil each carry a Zacks Rank #1 (Strong Buy), while Canadian Natural Resources holds a Zacks Rank #3 (Hold).

Imperial Oil has received Toronto Stock Exchange approval for a normal course issuer bid allowing it to repurchase up to 5% of its outstanding common shares. The company may buy back up to 24.17 million shares over the next year, based on 483.59 million shares outstanding as of June 15, with purchases from majority shareholder ExxonMobil reducing that upper limit. The one-year program begins June 29 and runs until June 28, 2027, or until the maximum shares are acquired. The buyback reflects the company's strong balance sheet, cash flows, and focus on tax-efficient shareholder returns.

Imperial Oil Limited has received final acceptance from the Toronto Stock Exchange for a new normal course issuer bid to repurchase up to five percent of its outstanding common shares, or a maximum of 24,179,635 shares, over the next 12 months. The program begins June 29, 2026, and will end when the maximum is reached or on June 28, 2027. Majority shareholder ExxonMobil, which holds approximately 69.6 percent, intends to participate to maintain its proportionate ownership, as it has in prior years. Under the previous program, Imperial repurchased the maximum 25,452,248 shares at a total cost of about $3,180 million and an average cost of $124.93 per share. The company says the buyback reflects its strong balance sheet, low capital requirements, and priority to return cash to shareholders.