second quarter 2026
Filed Jul 31, 2026Imperial announces second quarter 2026 financial and operating results
Net income and operating cash flow increased sharply on higher commodity prices and improved refining margins, but Upstream production, refinery throughput, utilization and product sales declined, and Imperial lowered 2026 refinery throughput and utilization guidance.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Net income (loss)GAAP | $2,190 million | – | +1,241 |
| Net income (loss) per common share, assuming dilutionGAAP | $4.52 per share | – | +2.66 |
| Cash flows from operating activitiesother | $2,704 million | – | – |
| Cash flows from operating activities excluding working capitalnon-GAAP | $2,522 million | – | – |
| Capital and exploration expendituresother | $531 million | – | +58 |
| Six months net income (loss)GAAP | $3,130 million | – | +893 |
| Six months net income (loss) per common share, assuming dilutionGAAP | $6.46 per share | – | +2.08 |
| Six months capital and exploration expendituresother | $1,009 million | – | +138 |
| Upstream productionother | 414,000 gross oil-equivalent barrels per day | – | – |
| Kearl production, Imperial's shareother | 182,000 barrels per day | – | – |
| Kearl total gross productionother | 257,000 barrels per day | – | – |
| Cold Lake gross bitumen productionother | 149,000 barrels per day | – | – |
| Syncrude gross production, company's shareother | 73,000 barrels per day | – | – |
| Refinery throughputother | 331,000 barrels per day | – | – |
| Refinery capacity utilizationother | 76 percent | – | – |
| Petroleum product salesother | 446,000 barrels per day | – | – |
| Chemical net incomeother | $65 million | – | – |
| West Texas Intermediateother | US$92.69 per barrel | – | – |
| Western Canada Selectother | US$77.90 per barrel | – | – |
| WTI/WCS Spreadother | US$14.79 per barrel | – | – |
| Bitumen realizationsother | $95.79 per barrel | – | – |
| Synthetic crude oil realizationsother | $141.10 per barrel | – | – |
| Average foreign exchange rateother | US$0.72 | – | – |
2026 outlook
- NoteRefinery throughput: 370,000 - 380,000 barrels per day
- NoteRefinery capacity utilization: 85% - 88% utilization
- NotePrior refinery throughput guidance: 395,000 - 405,000 barrels per day
- NotePrior refinery capacity utilization guidance: 91% - 93% utilization
- NoteThe short-term rail logistic challenge at Strathcona is targeted to be resolved by year end.
- NoteImperial anticipates repurchasing all remaining allowable shares prior to year end.
Capital returns
- $421 million returned to shareholders in the second quarter of 2026 through dividends paid.
- Declared a third quarter dividend of 87 cents per share.
- The renewed NCIB program enables the purchase of up to five percent of common shares outstanding, a maximum of 24,179,635 shares, during the 12-month period commencing June 29, 2026.
- Imperial plans to accelerate its share purchases under the NCIB program and anticipates repurchasing all remaining allowable shares prior to year end.
What drove it
- Higher commodity prices primarily drove the increase from first-quarter 2026 net income, partially offset by planned turnaround activities.
- Average bitumen realizations increased by $29.97 per barrel, primarily driven by higher marker prices, partially offset by a weaker WTI/WCS spread and higher diluent costs.
- Synthetic crude oil realizations increased by $53.25 per barrel, primarily driven by higher marker prices and an improved Synthetic/WTI spread.
- Higher Downstream margins primarily reflected improved market conditions.
- Chemical net income was $65 million, compared with $21 million in the second quarter of 2025.
- Cold Lake production included strong performance of the solvent-assisted SAGD technology at Grand Rapids.
Concerns
- Upstream production declined due to lower volumes at Kearl and Syncrude.
- Kearl production was affected by the absence of exceptional high-quality ore grade.
- Syncrude production was affected by extreme rainfall.
- Refinery throughput and capacity utilization were impacted by planned turnaround work at Strathcona and unplanned downtime.
- The company lowered 2026 refinery throughput and utilization guidance to reflect unplanned downtime and a short-term rail logistic challenge at Strathcona.
- Geopolitical events in the Middle East and increasing supply uncertainty continued to drive volatility in crude oil prices and heavy crude differentials.
What to watch
- Resolution of the short-term rail logistic challenge at Strathcona, which is targeted to be resolved by year end.
- Second-half volumes and overall performance following completion of the company's heaviest planned turnaround quarter.
- Execution of accelerated NCIB purchases and the plan to complete the program prior to year end.
- Progress toward definitive agreements and regulatory approvals for the proposed Pathways Project under the trilateral MOU.
Balance sheet and cash flow
- Cash flows from operating activities were $2,704 million, compared with $1,465 million in the second quarter of 2025 and $756 million in the first quarter of 2026.
- Cash flows from operating activities excluding working capital were $2,522 million, compared with $1,413 million in the second quarter of 2025 and $1,239 million in the first quarter of 2026.
- Capital and exploration expenditures totaled $531 million, compared with $473 million in the second quarter of 2025.
- Free cash flow was referenced as a non-GAAP financial measure, but no numerical free cash flow amount was reported in the provided text.
Analysis
Imperial reported second-quarter net income of $2,190 million, compared with $949 million in the second quarter of 2025 and $940 million in the first quarter of 2026. Diluted net income per common share was $4.52, compared with $1.86 a year earlier. The company attributed the sequential income increase primarily to higher commodity prices, partly offset by planned turnaround activity. Cash flows from operating activities were $2,704 million, while cash flows from operating activities excluding working capital were $2,522 million.
Commodity pricing and realization data support the stronger financial result. West Texas Intermediate was US$92.69 per barrel and Western Canada Select was US$77.90 per barrel, versus US$63.69 and US$53.66, respectively, in the second quarter of 2025. Bitumen realizations were $95.79 per barrel and synthetic crude oil realizations were $141.10 per barrel. Higher Downstream margins also reflected improved market conditions, while Chemical net income increased to $65 million from $21 million.
Operating volumes were weaker year over year. Upstream production averaged 414,000 gross oil-equivalent barrels per day, compared with 427,000 gross oil-equivalent barrels per day. Kearl total gross production was 257,000 barrels per day, compared with 275,000 barrels per day, as exceptional high-quality ore grade was absent. Syncrude production attributable to Imperial was 73,000 barrels per day, compared with 77,000 barrels per day, with extreme rainfall cited as the principal pressure. Cold Lake production increased to 149,000 barrels per day from 145,000 barrels per day.
Downstream operations absorbed substantial turnaround and downtime effects. Refinery throughput was 331,000 barrels per day and capacity utilization was 76 percent, compared with 376,000 barrels per day and 87 percent in the prior-year quarter. Petroleum product sales were 446,000 barrels per day, compared with 480,000 barrels per day. Imperial cited turnaround impacts of about $190 million within Downstream other factors, partly offset by favourable product mix effects of about $140 million.
Capital allocation remained shareholder-focused. The company paid $421 million of dividends during the quarter, declared a third-quarter dividend of 87 cents per share, and renewed an NCIB that permits purchases of up to five percent of outstanding common shares, or a maximum of 24,179,635 shares. Management plans to accelerate purchases with a target to complete the program prior to year end. The principal guide change was a reduction in 2026 refinery throughput guidance to 370,000 - 380,000 barrels per day and refinery utilization guidance to 85% - 88% utilization, reflecting unplanned downtime and a short-term rail logistic challenge at Strathcona.
Management, verbatim
Imperial's advantaged integrated business model delivered strong financial results across all operating segments, Upstream, Downstream and Chemical, while completing significant planned turnaround activity,
John Whelan, chairman, president and chief executive officer
Having safely completed our heaviest planned turnaround quarter, we anticipate strong volumes and overall performance in the second half of 2026 across our integrated business, supporting robust free cash flow generation,
John Whelan, chairman, president and chief executive officer
Consistent with my confidence in that outlook, I am pleased to announce our plan to accelerate our NCIB share repurchases with a target of completing the program prior to year end.
John Whelan, chairman, president and chief executive officer
Not in the filing
stated, not guessed- Period-end date.
- Total revenue.
- Segment revenue for Upstream, Downstream and Chemical.
- Upstream and Downstream segment net income or loss.
- Gross profit and gross margin.
- Operating income or loss and operating margin.
- Non-GAAP net income and non-GAAP EPS.
- Free cash flow numerical amount and reconciliation.
- Cash balance, debt balance and net debt.
- Share repurchases completed during the quarter, including shares and dollar value.
- Forward guidance for revenue, gross margin, operating expenses and tax rate.
- Percentage year-over-year and quarter-over-quarter changes for reported financial and operating metrics.
- Previous-release outlook needed to compare reported results with prior guidance.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.