Cenovus provides risk management program update

Imperial Oil Limited (TSE: IMO, NYSE American: IMO) today declared a quarterly dividend of 44 cents per share on the outstanding common shares of the company, payable on April 1, 2023, to shareholders of record at the close of business on March 3, 2023.

This first quarter 2023 dividend compares with the fourth quarter 2022 dividend of 44 cents per share.

• Quarterly net income of $1,727 million and cash flow from operating activities of $2,797 million
• Upstream production of 441,000 gross oil-equivalent barrels per day during fourth quarter, driven by continued strength at Kearl and Cold Lake, and higher production at Syncrude
• Maintained strong refining capacity utilization, achieving best ever quarterly utilization of 101 percent
• Returned more than $2.1 billion to shareholders in the fourth quarter, including successful completion of substantial issuer bid
• Declared first quarter dividend of 44 cents per share
• Approved $720 million project to construct largest renewable diesel facility in Canada
• Announcing company-wide goal to achieve net zero (Scope 1 and 2) by 2050 in operated assets

Imperial (TSE: IMO) (NYSE American: IMO) :

Imperial reported estimated net income in the fourth quarter of $1,727 million and cash flow from operating activities of $2,797 million, compared to net income of $2,031 million and cash flow from operating activities of $3,089 million in the third quarter of 2022. Fourth quarter results reflected strong operating performance across all business segments and robust diesel crack spreads, which were offset by lower upstream realizations. Full-year estimated net income was $7,340 million with cash flow from operating activities of $10,482 million.

"Our financial results this past year are the strongest in company history, driven by record operating performance across our assets," said Brad Corson, chairman, president and chief executive officer. "Throughout 2022 our operations remained focused on ensuring a stable supply of energy products to Canadian and global markets, supporting continued economic growth and capturing significant value for our shareholders."

Upstream production in the fourth quarter averaged 441,000 gross oil-equivalent barrels per day, bringing full-year production to 416,000 gross oil-equivalent barrels per day. At Kearl, quarterly total gross production averaged 284,000 barrels per day, in-line with the asset's previous record quarterly production set in the fourth quarter of 2020. Kearl's second half production was the highest in the asset's history, fully recovering from early 2022 cold weather impacts, bringing full-year production to 242,000 total gross barrels per day. At Cold Lake, quarterly gross production averaged 141,000 barrels per day with annual production of 144,000 barrels per day, the highest full-year production since 2018. At Syncrude, quarterly production increased to 87,000 gross barrels per day following the completion of its planned turnaround in the third quarter of 2022, with full-year production of 77,000 barrels per day representing the highest annual production in Syncrude history.

In the Downstream, throughput in the fourth quarter averaged 433,000 barrels per day with capacity utilization of 101 percent, the highest quarterly utilization in company history, as Imperial continues to maximize production to meet Canadian demand. Full-year throughput averaged 418,000 barrels per day with capacity utilization of 98 percent, the highest full-year utilization in company history. Fourth quarter petroleum product sales averaged 487,000 barrels per day, with annual petroleum product sales averaging 475,000 barrels per day.

During the quarter, Imperial returned $2,145 million to shareholders, through dividend payments, accelerated completion of the company's annual normal course issuer bid program and successful completion of the company's $1.5 billion substantial issuer bid program in December. Throughout 2022, the company returned over $7 billion to its shareholders. "Imperial continued delivering on its long-standing commitment by returning record cash to shareholders in 2022 through our reliable and growing dividend and industry-leading share repurchase programs," said Corson.

In January, Imperial announced it will further help Canada achieve its net zero goals by approving a $720 million renewable diesel project located at the company's Strathcona Refinery near Edmonton. The project will be the largest of its kind in Canada, designed to produce more than one billion litres of renewable diesel annually primarily from locally sourced feedstocks and could help reduce greenhouse gas emissions by about 3 million metric tons per year, as determined in accordance with Canada's Clean Fuel Regulations. Site preparation and initial construction work is underway with renewable diesel production expected to start in early 2025, subject to regulatory approvals.

As part of the company's efforts to provide solutions that lower the greenhouse gas emissions intensity of our operations and provide lower life-cycle emissions products to our customers, Imperial is implementing a company-wide goal to achieve net zero emissions (Scope 1 and 2) by 2050 in its operated assets through collaboration with government and industry partners. Successful technology development and supportive fiscal and regulatory frameworks will be needed to achieve this goal. This work builds on Imperial's previously announced net-zero goal for operated oil sands as part of the Pathways Alliance initiative, as well as the company's 2030 emission intensity reduction goal for operated oil sands. The company plans to achieve its net zero goal by applying oil sands recovery technologies that use less steam, implementing carbon capture and storage and implementing efficiency projects including the use of lower carbon fuels at its operations.

"We continue to make progress on advancing lower-carbon solutions that support our journey to net zero, including our strategic growth investment in the Strathcona Renewable Diesel project," said Corson. "This project will create jobs for the local economy, help our customers reduce their emissions and further enhance Imperial's low-carbon product offering."

Fourth quarter highlights

• Net income of $1,727 million or $2.86 per share on a diluted basis, up from $813 million or $1.18 per share in the fourth quarter of 2021.

• Cash flows from operating activities of $2,797 million, up from $1,632 million in the same period of 2021. Cash flows from operating activities excluding working capital ¹ of $2,452 million, up from $1,648 million in the same period of 2021.

• Capital and exploration expenditures totaled $488 million, up from $441 million in the fourth quarter of 2021.

• The company returned $2,145 million to shareholders in the fourth quarter of 2022, including $211 million in dividends paid and $1,934 million in share repurchases, through its normal course issuer bid and completion of the $1,500 million substantial issuer bid program in December.

• Production averaged 441,000 gross oil-equivalent barrels per day, compared to 445,000 gross oil-equivalent barrels per day in the same period of 2021. Adjusting for the sale of XTO Energy Canada, which closed in the third quarter of 2022, production increased by 11,000 gross oil-equivalent barrels per day compared to the same period in 2021.

• Total gross bitumen production at Kearl averaged 284,000 barrels per day (201,000 barrels Imperial's share), in-line with the asset's previous record quarterly production set in the fourth quarter of 2020 and up from 270,000 barrels per day (191,000 barrels Imperial's share) in the fourth quarter of 2021.

• Gross bitumen production at Cold Lake averaged 141,000 barrels per day, compared to 142,000 barrels per day in the fourth quarter of 2021.

• The company's share of gross production from Syncrude averaged 87,000 barrels per day, up from 79,000 barrels per day in the fourth quarter of 2021.

• Refinery throughput averaged 433,000 barrels per day, up from 416,000 barrels per day in the fourth quarter of 2021. Capacity utilization reached 101 percent, the highest quarterly utilization in company history, up from 97 percent in the fourth quarter of 2021, as the company continues to maximize production to meet Canadian demand.

• Petroleum product sales were 487,000 barrels per day, compared to 496,000 barrels per day in the fourth quarter of 2021.

• Chemical net income of $41 million in the quarter, compared to $64 million in the fourth quarter of 2021. Lower income was primarily driven by lower polyethylene margins.

• Approved $720 million project to construct largest renewable diesel facility in Canada. The project, located at Imperial's Strathcona Refinery near Edmonton, is designed to produce more than one billion litres of renewable diesel annually, primarily from locally sourced feedstocks and could help reduce greenhouse gas emissions by about 3 million metric tonnes per year, as determined in accordance with Canada's Clean Fuel Regulations. Site preparation and initial construction work is underway with renewable diesel production expected to start in early 2025, subject to regulatory approvals.

• Announcing company-wide goal to achieve net zero (Scope 1 and 2) by 2050 in operated assets, through collaboration with government and industry partners. This builds on Imperial's previously announced net zero goal for operated oil sands as part of the Pathways Alliance initiative, as well as the company's 2030 emission intensity reduction goal for its operated oil sands.

• The Pathways Alliance entered into a Carbon Sequestration Evaluation Agreement with the Government of Alberta, enabling the Alliance to immediately start a detailed evaluation of its proposed geological storage hub, which would be one of the world's largest carbon capture and storage projects.

Recent business environment

During the COVID-19 pandemic, industry investment to maintain and increase production capacity was restrained to preserve capital, resulting in underinvestment and supply tightness as demand for petroleum and petrochemical products recovered. Across late 2021 and the first half of 2022, this dynamic, along with supply chain constraints, and a continuation of demand recovery, led to a steady increase in oil and natural gas prices and refining margins.

Demand for petroleum and petrochemical products has grown in 2022, with the company's financial results benefiting from stronger prices and margins. Commodity and product prices are expected to remain volatile given the current global economic uncertainty and geopolitical events affecting supply and demand.

The general rate of inflation in Canada and many other countries experienced a brief decline in the initial stage of the COVID-19 pandemic, before starting to increase steadily in 2021 due to imbalanced recoveries between supply and demand in the global economy. The underlying factors include, but are not limited to, supply chain disruptions, shipping bottlenecks, labour constraints, and side effects from monetary and fiscal expansions. Prices for services and materials continue to respond to the fast changing dynamics involving economic growth, overall inflation, commodity markets, and industry activities. The company closely monitors market trends and works to mitigate both operating and capital cost impacts in all price environments through efficient project management practices, and general productivity improvements.

Operating results
Fourth quarter 2022 vs. fourth quarter 2021

Upstream
Net income (loss) factor analysis
millions of Canadian dollars

Price – Lower bitumen realizations were primarily driven by the widening WTI/WCS spread. Average bitumen realizations decreased by $5.68 per barrel generally in line with WCS, and synthetic crude oil realizations increased by $22.68 per barrel.

Volumes – Higher volumes were the result of improved plant performance at Kearl and lower unplanned downtime at Syncrude, partially offset by the absence of XTO Energy Canada production following the divestment in the third quarter of 2022.

Royalty – Higher royalties primarily driven by improved commodity prices.

Other – Favourable foreign exchange impacts of about $160 million, partially offset by higher operating expenses of about $70 million, resulting primarily from higher energy prices.

Marker prices and average realizations

Production

Higher production at Kearl was primarily driven by improved plant performance and the absence of extreme cold weather in December 2021.

Downstream
Net income (loss) factor analysis
millions of Canadian dollars

Margins – Higher margins primarily reflect improved market conditions.

Other – Improved volumes of about $60 million, favourable foreign exchange impacts of about $60 million, absence of the prior year unfavourable out-of-period inventory adjustment of $60 million, partially offset by higher operating expenses of about $50 million.

Refinery utilization and petroleum product sales

Improved refinery throughput in the fourth quarter of 2022 was primarily driven by economic optimization across the downstream supply chain.

Chemicals
Net income (loss) factor analysis
millions of Canadian dollars

Corporate and other

Liquidity and capital resources

Cash flow generated from operating activities primarily reflects higher Upstream realizations, improved Downstream margins, and favourable working capital impacts.

Cash flow used in investing activities primarily reflects higher additions to property, plant and equipment.

Cash flow used in financing activities primarily reflects:

The company completed share repurchases under its normal course issuer bid on October 21, 2022.

On November 4, 2022, the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $1.5 billion of its common shares through a modified Dutch auction and proportionate tender offer. The substantial issuer bid was completed on December 14, 2022, with the company taking up and paying for 20,689,655 common shares at a price of $72.50 per share, for an aggregate purchase of $1.5 billion and 3.4 percent of Imperial's issued and outstanding shares at the close of business on

October 31, 2022. This included 14,399,985 shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.

Full-year 2022 vs. full-year 2021

Current year results include favourable identified items ¹ of $208 million related to the company's gain on the sale of interests in XTO Energy Canada.

Upstream
Net income (loss) factor analysis
millions of Canadian dollars

Price – Higher realizations were generally in line with increases in marker prices, driven primarily by increased demand. Average bitumen realizations increased by $26.76 per barrel generally in line with WCS, and synthetic crude oil realizations increased by $43.85 per barrel.

Volumes – Lower volumes were primarily the result of downtime at Kearl in the first half of the year, partly offset by higher production at Syncrude and Cold Lake.

Royalty – Higher royalties primarily driven by improved commodity prices.

Identified Items ¹ – Current year results include favourable identified items ¹ related to the company's gain on the sale of interests in XTO Energy Canada.

Other – Higher operating expenses of about $500 million, primarily from higher energy prices, partially offset by favourable foreign exchange impacts of about $270 million, and higher electricity sales at Cold Lake of about $60 million due to increased prices.

Marker prices and average realizations

Production

Lower production at Kearl was primarily a result of downtime in the first half of the year.

Downstream
Net income (loss) factor analysis
millions of Canadian dollars

Margins – Higher margins primarily reflect improved market conditions.

Other – Lower turnaround impacts of about $140 million, reflecting the absence of turnaround activities at Strathcona refinery, improved volumes of about $130 million, favourable foreign exchange impacts of about $120 million, absence of the prior year unfavourable out-of-period inventory adjustment of $74 million, partially offset by higher operating expenses of about $190 million.

Refinery utilization and petroleum product sales

Improved refinery throughput in 2022 was primarily driven by increased demand and reduced turnaround activity.

Improved petroleum product sales in 2022 primarily reflects increased demand.

Chemicals
Net income (loss) factor analysis
millions of Canadian dollars

Margins – Lower margins primarily reflect weaker industry polyethylene margins.

Corporate and other

Liquidity and capital resources

Cash flow generated from operating activities primarily reflects higher Upstream realizations, improved Downstream margins, and favourable working capital impacts.

Cash flow used in investing activities primarily reflects higher additions to property, plant and equipment, which were partially offset by proceeds from the sale of interests in XTO Energy Canada.

Cash flow used in financing activities primarily reflects:

On June 27, 2022, the company announced that it had received final approval from the Toronto Stock Exchange for a new normal course issuer bid to continue its then existing share repurchase program. The program enabled the company to purchase up to a maximum of 31,833,809 common shares during the period

June 29, 2022 to June 28, 2023. The program completed on October 21, 2022 as a result of the company purchasing the maximum allowable number of shares under the program.

On May 6, 2022, the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $2.5 billion of its common shares through a modified Dutch auction and proportionate tender offer. The substantial issuer bid was completed on June 15, 2022, with the company taking up and paying for 32,467,532 common shares at a price of $77.00 per share, for an aggregate purchase of $2.5 billion and 4.9 percent of Imperial's issued and outstanding shares at the close of business on May 2, 2022. This included 22,597,379 shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.

On November 4, 2022, the company commenced a substantial issuer bid pursuant to which it offered to purchase for cancellation up to $1.5 billion of its common shares through a modified Dutch auction and proportionate tender offer. The substantial issuer bid was completed on December 14, 2022, with the company taking up and paying for 20,689,655 common shares at a price of $72.50 per share, for an aggregate purchase of $1.5 billion and 3.4 percent of Imperial's issued and outstanding shares at the close of business on

October 31, 2022. This included 14,399,985 shares purchased from Exxon Mobil Corporation by way of a proportionate tender to maintain its ownership percentage at approximately 69.6 percent.

During the third quarter of 2022, the company decreased its long-term debt by $1 billion by partially repaying an existing facility with an affiliated company of ExxonMobil.

Key financial and operating data follow.

Forward-looking statements

Statements of future events or conditions in this report, including projections, targets, expectations, estimates, and business plans are forward-looking statements. Forward-looking statements can be identified by words such as believe, anticipate, intend, propose, plan, goal, seek, project, predict, target, estimate, expect, strategy, outlook, schedule, future, continue, likely, may, should, will and similar references to future periods. Forward-looking statements in this report include, but are not limited to, references to continuing to maximize production to meet Canadian fuel demand; the company's planned renewable diesel complex at Strathcona, including project cost, production estimates, expected sources of feedstock, projections regarding expected reductions in greenhouse gas emissions in comparison to conventional fuels, expected start up in early 2025, and timing of regulatory approvals; the ability for the renewable diesel project to create jobs, help customers reduce emissions and enhance the company's low carbon product offering; continuing to advance lower-carbon solutions supporting the company's journey to net zero; the company's ongoing efforts to provide solutions that lower the greenhouse gas emissions intensity of operations and provide lower life-cycle emissions products to customers; the company-wide goal to achieve net zero emissions (Scope 1 and 2) by 2050 in its operated assets through collaboration with government and industry partners; the company's 2030 emission intensity reduction goal for operated oil sands assets; the impact and ability to apply recovery technologies, carbon capture and storage, and efficiency projects including the use of lower carbon fuels at its operations to achieve lower emissions goals; evaluation of the Pathways Alliance proposed geological storage hub, including the carbon sequestration evaluation agreement with the Government of Alberta; the expectation of commodity and product price volatility; and the continued evolution of inflation and prices for services and materials, its impact on operating and capital cost, and the company's ability to mitigate these costs.

Forward-looking statements are based on the company's current expectations, estimates, projections and assumptions at the time the statements are made. Actual future financial and operating results, including expectations and assumptions concerning demand growth and energy source, supply and mix; production rates, growth and mix across various assets; project plans, timing, costs, technical evaluations and capacities and the company's ability to effectively execute on these plans and operate its assets, including its investment in the renewable diesel complex at Strathcona; the adoption and impact of new facilities or technologies on reductions to GHG emissions intensity, including but not limited to Strathcona renewable diesel, carbon capture and storage including in connection with hydrogen for the renewable diesel project, recovery technologies and efficiency projects and any changes in the scope, terms, or costs of such projects; for renewable diesel, the availability and cost of locally-sourced and grown feedstock and the supply of renewable diesel to British Columbia in connection with its low-carbon fuel legislation; the amount and timing of emissions reductions, including the impact of lower carbon fuels; that any required support from policymakers and other stakeholders for various new technologies such as carbon capture and storage will be provided; performance of third party service providers; receipt of regulatory approvals in a timely manner; refinery utilization; applicable laws and government policies, including with respect to climate change, GHG emissions reductions and low carbon fuels; the ability to offset any ongoing inflationary pressures; capital allocation including shareholder returns, and capital and environmental expenditures; progression of COVID-19 and its impacts on Imperial's ability to operate its assets; and commodity prices, foreign exchange rates and general market conditions could differ materially depending on a number of factors.

These factors include global, regional or local changes in supply and demand for oil, natural gas, and petroleum and petrochemical products and resulting price, differential and margin impacts, including foreign government action with respect to supply levels and prices, the impact of COVID-19 on demand and the occurrence of wars; availability and allocation of capital; the receipt, in a timely manner, of regulatory and third-party approvals, including for new technologies that will help the company meet its lower emissions goals; the results of research programs and new technologies, the ability to bring new technologies to commercial scale on a cost-competitive basis, and the competitiveness of alternative energy and other emission reduction technologies; failure or delay of supportive policy and market development for the adoption of emerging lower emission energy technologies and other technologies that support emissions reductions; political or regulatory events, including changes in law or government policy, environmental regulation including climate change and greenhouse gas regulation, and actions in response to COVID-19; unanticipated technical or operational difficulties; project management and schedules and timely completion of projects; availability and performance of third-party service providers, including in light of restrictions related to COVID-19; environmental risks inherent in oil and gas exploration and production activities; management effectiveness and disaster response preparedness, including business continuity plans in response to COVID-19; operational hazards and risks; cybersecurity incidents, including increased reliance on remote working arrangements; currency exchange rates; general economic conditions; and other factors discussed in Item 1A risk factors and Item 7 management's discussion and analysis of financial condition and results of operations of Imperial Oil Limited's most recent annual report on Form 10-K and subsequent interim reports.

Forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties, some that are similar to other oil and gas companies and some that are unique to Imperial Oil Limited. Imperial's actual results may differ materially from those expressed or implied by its forward-looking statements and readers are cautioned not to place undue reliance on them. Imperial undertakes no obligation to update any forward-looking statements contained herein, except as required by applicable law.

In this release all dollar amounts are expressed in Canadian dollars unless otherwise stated. This release should be read in conjunction with Imperial's most recent Form 10-K. Note that numbers may not add due to rounding.

The term "project" as used in this release can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.

Imperial's company-wide net-zero goal (Scope 1 and 2) by 2050 is backed by a comprehensive approach centered on detailed emission-reduction roadmaps for its major operated assets. Roadmaps may be updated as needed to reflect technology, policy and other developments, including the development and acquisition of major operated assets. Actions needed to advance the company's 2030 greenhouse gas emissions intensity reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on the ExxonMobil's Energy Outlook research and publication, which contains demand and supply projections based on assessment of current trends in technology, government policies, consumer preferences, geopolitics, and economic development. Reflective of the existing global policy environment, the Energy Outlook does not project the degree of required future policy and technology advancement and deployment for the world, or Imperial, to meet net-zero goals by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and the company's business plans will be updated accordingly.

Individual projects or opportunities may advance based on a number of factors, including availability of supportive policy, technology for cost-effective abatement, company planning process, and alignment with our partners and other stakeholders. The company's plans to reduce emissions are good-faith efforts based on current relevant data and methodology, which could be changed or refined.

Non-GAAP financial measures and other specified financial measures
Certain measures included in this document are not prescribed by U.S. Generally Accepted Accounting Principles (GAAP). These measures constitute "non-GAAP financial measures" under Securities and Exchange Commission Regulation G, and "specified financial measures" under National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure of the Canadian Securities Administrators.

Reconciliation of these non-GAAP financial measures to the most comparable GAAP measure, and other information required by these regulations, have been provided. Non-GAAP financial measures and specified financial measures are not standardized financial measures under GAAP and do not have a standardized definition. As such, these measures may not be directly comparable to measures presented by other companies, and should not be considered a substitute for GAAP financial measures.

Cash flows from (used in) operating activities excluding working capital
Cash flows from (used in) operating activities excluding working capital is a non-GAAP financial measure that is the total cash flows from operating activities less the changes in operating assets and liabilities in the period. The most directly comparable financial measure that is disclosed in the financial statements is cash flows from (used in) operating activities within the company's Consolidated statement of cash flows. Management believes it is useful for investors to consider these numbers in comparing the underlying performance of the company's business across periods when there are significant period-to-period differences in the amount of changes in working capital. Changes in working capital is equal to "Changes in operating assets and liabilities" as disclosed in the company's Consolidated statement of cash flows and in Attachment II of this document. This measure assesses the cash flows at an operating level, and as such, does not include proceeds from asset sales as defined in Cash flows from operating activities and asset sales in the Frequently Used Terms section of the company's annual Form 10-K.

Reconciliation of cash flows from (used in) operating activities excluding working capital

Free cash flow
Free cash flow is a non-GAAP financial measure that is cash flows from operating activities less additions to property, plant and equipment and equity company investments plus proceeds from asset sales. The most directly comparable financial measure that is disclosed in the financial statements is cash flows from (used in) operating activities within the company's Consolidated statement of cash flows. This measure is used to evaluate cash available for financing activities (including but not limited to dividends and share purchases) after investment in the business.

Reconciliation of free cash flow

Net income (loss) excluding identified items
Net income (loss) excluding identified items is a non-GAAP financial measure that is total net income (loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least $100 million in a given quarter. The net income (loss) impact of an identified item for an individual segment in a given quarter may be less than $100 million when the item impacts several segments or several periods. The most directly comparable financial measure that is disclosed in the financial statements is net income (loss) within the company's Consolidated statement of income. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The company believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as seen through the eyes of management. Net income (loss) excluding identified items is not meant to be viewed in isolation or as a substitute for net income (loss) as prepared in accordance with U.S. GAAP. All identified items are presented on an after-tax basis.

Reconciliation of net income (loss) excluding identified items

Cash operating costs (cash costs)
Cash operating costs is a non-GAAP financial measure that consists of total expenses, less costs that are non-cash in nature, including, Purchases of crude oil and products, Federal excise taxes and fuel charge, Depreciation and depletion, Non-service pension and postretirement benefit, and Financing. The components of cash operating costs include (1) Production and manufacturing, (2) Selling and general and (3) Exploration, from the company's Consolidated statement of income, and as disclosed in Attachment III of this document. The sum of these income statement lines serve as an indication of cash operating costs and does not reflect the total cash expenditures of the company. The most directly comparable financial measure that is disclosed in the financial statements is total expenses within the company's Consolidated statement of income. This measure is useful for investors to understand the company's efforts to optimize cash through disciplined expense management.

Reconciliation of cash operating costs

Components of cash operating costs

Segment contributions to total cash operating costs

Unit cash operating cost (unit cash costs)
Unit cash operating costs is a non-GAAP ratio. Unit cash operating costs (unit cash costs) is calculated by dividing cash operating costs by total gross oil-equivalent production, and is calculated for the Upstream segment, as well as the major Upstream assets. Cash operating costs is a non-GAAP financial measure and is disclosed and reconciled above. This measure is useful for investors to understand the expense management efforts of the company's major assets as a component of the overall Upstream segment. Unit cash operating cost, as used by management, does not directly align with the definition of "Average unit production costs" as set out by the U.S. Securities and Exchange Commission (SEC), and disclosed in the company's SEC Form 10-K.

Components of unit cash operating cost

After more than a century, Imperial continues to be an industry leader in applying technology and innovation to responsibly develop Canada's energy resources. As Canada's largest petroleum refiner, a major producer of crude oil, a key petrochemical producer and a leading fuels marketer from coast to coast, our company remains committed to high standards across all areas of our business.

Source: Imperial

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• Facility expected to produce more than 1 billion litres per year, or 20,000 barrels per day, of renewable diesel
• Renewable diesel has potential to reduce annual greenhouse emissions by about 3 million tonnes compared to conventional fuels
• Project to supply British Columbia in support of province's plan to reduce greenhouse gas emissions

Imperial (TSE: IMO, NYSE American: IMO) said today it will further help Canada achieve its net zero goals by investing about $720 million (USD $560 million) to move forward with construction of the largest renewable diesel facility in the country. The project at Imperial's Strathcona refinery near Edmonton is expected to produce more than one billion litres of renewable diesel annually primarily from locally sourced feedstocks and could help reduce greenhouse gas emissions in the Canadian transportation sector by about 3 million metric tons per year, as determined in accordance with Canada's Clean Fuel Regulation. Regulatory approval for the project is expected in the near term.