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Imperial Oil announces largest dividend increase in its history

Like many Canadian oil and gas producers, Imperial continues to reward shareholders with the spoils of stronger commodity prices. (GETTY)
Like many Canadian oil and gas producers, Imperial continues to reward shareholders with the spoils of stronger commodity prices. (GETTY)

Shares of Imperial Oil (IMO.TO)(IMO) climbed as much as 10 per cent on Friday as the company rewarded shareholders with the largest dividend increase in its history.

The Calgary-based integrated oil company reported third-quarter financial results before the opening bell, showing earnings more than doubled from a year ago, at $2.03 billion. Total revenue and other income for the quarter rose nearly 49 per cent year-over-year to $15.22 billion.

"We're continuing to experience high commodity prices driven in large part by supply challenges and ongoing geopolitical events," chief executive officer Brad Corson told analysts on a post-earnings conference call. "The overall macro environment remains quite positive for our financial performance."

Like many Canadian oil and gas producers, Imperial continues to reward shareholders with the spoils of pricier commodities.The company said on Friday that it plans to buy back up to $1.5 billion of its shares, and will now pay a quarterly dividend of $0.44 per share, up from its previous dividend of $0.34 per share.

"A reliable and growing dividend remains the bedrock of our cash distribution strategy," Dan Lyons, Imperial's senior vice-president of finance and administration, said on the call.

Toronto-listed shares added 8.2 per cent to $72.98 as at 1:05 p.m. ET. The stock has climbed about 48 per cent this year.

Operationally, Corson says the third quarter was a record-breaker. Downstream refining throughput averaged 426,000 barrels per day, with capacity utilization of 100 per cent, the highest quarterly rate in over 40 years. Downstream throughput increased about five per cent year-over-year.

Upstream production for Q3 was 430,000 gross oil-equivalent barrels per day, versus 435,000 in the same quarter last year.

"We saw outstanding performance across all of our assets, both upstream and downstream," Corson said, noting the company's Kearl oil sands project broke a record for single-day production on Oct. 12. "We are also seeing this strong operating momentum continue into the fourth quarter."

Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.

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