Unpredictable Costs Add to Imperial’s Risk

Article Excerpt

IMPERIAL OIL LTD. $39 (Toronto symbol IMO; Conservative Growth Portfolio, Resources sector; SI Rating: Average) gets about 80% of its oil production from its oil sands projects, mostly its 100%-owned Cold Lake facility. Imperial also owns 25% of the Syncrude Canada Ltd. oil sands project, which recently had to cut production due to problems with some new equipment. The company is currently working on its new Kearl Lake oil sands project, which could begin production in 2010. While oil sands developments have great long-term potential, they often cost much more than originally planned. That adds to Imperial’s risk, particularly if oil prices move down. Imperial Oil is a hold. hold…

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