imperial oil

IMPERIAL OIL $43.85 (Toronto symbol IMO; Shares outstanding: 847.6 million; Market cap: $37.2 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.imperialoil.ca) reported that its earnings per share jumped 20.8% in the three months ended September 30, 2012, to $1.22 from $1.01 a year earlier.

Cash flow per share rose 18.8%, to $1.52 from $1.28, while revenue gained 4.9%, to $8.3 billion from $7.9 billion.

Maintenance shutdowns and asset sales lowered production by 3.7%, to 285,000 barrels a day....

IMPERIAL OIL $42.44 (Toronto symbol IMO;Shares outstanding: 847.6 million; Market cap:$36.0 billion; TSINetwork Rating: Average;Dividend yield: 1.1%; www.imperialoil.ca) hasagreed to pay $1.55 billion to buy 50% of CelticExploration (Toronto symbol CLT). Thecompany will purchase this stake from its parentcompany, ExxonMobil Corp. (New York symbolXOM), after Exxon completes its recent deal tobuy 100% of Celtic.

Celtic owns large, undeveloped shale gasdeposits along the B.C.-Alberta border. Thesefields hold a total of 128 million barrels of oilequivalent. Of that total, 76% is natural gas and24% is natural gas liquids, such as butane. Atthe end of 2011, Imperial’s proved reservestotalled 3.2 billion barrels of oil equivalent.

Imperial Oil is a buy.

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IMPERIAL OIL LTD. $43 (Toronto symbol IMO;Conservative Growth Portfolio; Resources sector;Shares outstanding: 847.6 million; Market cap: $36.4billion; Price-to-sales ratio: 1.2; Dividend yield: 1.1%;TSI Network Rating: Average; www.imperialoil.ca)reported that its third quarter earnings jumped21.1%, to $1.0 billion, or $1.22 a share. A year earlier, it earned $859 million, or $1.01 a share.Cash flow per share rose 18.8%, to $1.52 from$1.28, while revenue gained 4.9%, to $8.3 billion from $7.9 billion.

Overall production fell 3.7%, to 285,000 barrels a day from 296,000 a year earlier, due to asset sales and maintenance shutdowns. However, earnings from oil refining and distribution (52% of the total)rose 97.1%.

The company will soon start up its 71%-owned Kearl oil sands project, which will increase its daily production by 78,100 barrels. Exxon Mobil Corp.(New York symbol XOM) owns the remaining29%. Exxon also owns 69.6% of Imperial.

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Pat McKeough responds to many personal questions about specific stocks and other investment topics from the members of his Inner Circle. Every week, his comments and recommendations on the most intriguing questions of the past week go out to all Inner Circle members. And each week, we offer you one of the highlights from these Q&A sessions. While we reserve our buy-hold-sell advice for Inner Circle members, these excerpts provide a great deal of information and analysis on stocks we’ve covered for members of Pat’s Inner Circle.

This week, an Inner Circle member asked about the wisdom of taking profits on a high-yielding stock whose shares have had a big run-up in price. Pat assesses the prospects of this gas station operator which has done an astute job of franchising its stations but also pursues a growth-by-acquisition that adds risk in a competitive industry.

Q: Hello again Pat: I bought Parkland Fuel Corp. about 18 months ago and have enjoyed the wonderful yield and am up 60% on the stock value. I am tempted to realize my capital gain. What are your thoughts on this stock?

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A: Total S.A. (ADR), $52.69, symbol TOT on New York (Shares outstanding: 2.4 billion; Market cap: $126.4 billion; www.total.com), is one of the world’s largest publicly traded integrated oil companies. Total is based in France. The company is involved in various aspects of the oil and gas industry around the world. It also has interests in refineries, chemical production and service stations. In the three months ended September 30, 2012, Total’s earnings rose 5.7%, to $1.85 per ADR from $1.75. Revenue fell 4.4%, to $62.4 billion from $65.2 billion....

A: Parkland Fuel Corp., $19.56, symbol PKI on Toronto (Shares outstanding: 67.7 million; Market cap: $1.3 billion, www.parkland.ca), operates gas stations, convenience stores and a fuel distribution business, mostly in western Canada and Ontario. The company was called Parkland Income Fund prior to its conversion to a dividend-paying corporation on December 31, 2010. Parkland owns 141 rural gas stations and convenience stores. Its brands include Fas Gas Plus, Race Trac Gas and Short Stop (convenience stores). Many stations sell propane in addition to gasoline and diesel fuel. The company also operates Esso gas stations in western Canada and Ontario under a licensing deal with Imperial Oil Ltd. (symbol IMO on Toronto)....

Suncor and Imperial Oil continue to expand their oil-sands operations. These projects are expensive to build and operate. A lack of pipeline capacity to handle the extra output could also put pressure on oil prices. However, lower prices would also boost profits at their refining operations.

SUNCOR ENERGY INC....

In next week’s Successful Investor Hotline, we’ll reveal our #1 stock pick for 2013. Don’t miss this unique opportunity to profit. ENCANA CORP., $20.16, Toronto symbol ECA, is selling its 30% stake in a proposed liquefied natural gas (LNG) terminal in Kitimat, B.C., to Chevron Corp. (New York symbol CVX). The deal includes Encana’s stake in related pipelines and gas properties in B.C. However, Encana will still ship its gas through Kitimat when the terminal is completed. Chevron is also buying a further 30% of this project from EOG Resources Canada Inc. Following these deals, Chevron will sell 10% to Apache Corp. (New York symbol APA). As a result, Chevron and Apache will each own 50%. (Chevron and Apache are recommendations of Wall Street Stock Forecaster, our newsletter that focuses on U.S. stocks.)...

IMPERIAL OIL $42.44 (Toronto symbol IMO;Shares outstanding: 847.6 million; Market cap:$36.0 billion; TSINetwork Rating: Average;Dividend yield: 1.1%; www.imperialoil.ca) hasagreed to pay $1.55 billion to buy 50% of CelticExploration (Toronto symbol CLT). Thecompany will purchase this stake from its parentcompany, ExxonMobil Corp....

iShares S&P/TSX Capped Energy Index Fund, $15.56 symbol XEG on Toronto (Shares outstanding: 59.7 million; Market cap: $928.9 million; ca.ishares.com), aims to mirror the performance of the S&P/TSX Capped Energy Index, which is made up of the largest-capitalization energy stocks on the Toronto exchange....