CALGARY, Alberta – Imperial Oil Limited (TSE: IMO, NYSE American: IMO) announced today that it has received final acceptance from the Toronto Stock Exchange (TSX) for a normal course issuer bid (NCIB) to repurchase up to five percent of its 711,673,439 outstanding common shares as of June 15, 2021, or a maximum of 35,583,671 shares during the next 12 months. This maximum will be reduced by the number of shares purchased from Exxon Mobil Corporation (ExxonMobil), Imperial’s majority shareholder, as described below.
The new one year program will begin on June 29, 2021, and will end should the company purchase the maximum allowable number of shares, or on June 28, 2022.
Imperial has established an automatic share purchase plan with its designated broker to facilitate the purchase of common shares, both under the NCIB and concurrently from ExxonMobil, during times when Imperial would ordinarily not be permitted to purchase due to regulatory restrictions or self-imposed black-out periods. Before entering a black-out period, Imperial may, but is not required to, instruct the broker to make purchases under the NCIB based on parameters set by Imperial in accordance with the share purchase plan, TSX rules and applicable securities laws. The plan has been pre-cleared by the TSX and will be implemented effective June 29, 2021.
Consistent with the company’s balance sheet strength, low capital requirements and strong cash generation, this announcement reflects the company’s priority and capacity to return cash to shareholders. The NCIB represents a flexible and tax-efficient way of distributing surplus liquidity to shareholders who choose to participate by selling their shares. In addition, the NCIB will be used to eliminate dilution from shares issued in conjunction with Imperial’s restricted stock unit plan.
ExxonMobil will be permitted to sell its shares to Imperial outside of, but concurrent with, the NCIB in order to maintain its proportionate share ownership at approximately 69.6 percent. ExxonMobil advised Imperial that it intends to participate, as it has in prior years, and has established an automatic share disposition plan to facilitate the sale of its shares concurrent with the NCIB.
All share purchases will be made through the Toronto Stock Exchange and through other designated exchanges and published markets in Canada. Shares purchased under the NCIB are cancelled and restored to the status of authorized but unissued shares.
As of June 15, 2021, Imperial has 711,673,439 issued and outstanding common shares. The average daily trading volume of Imperial’s common shares over the six calendar months prior to the date of this announcement was 1,250,051 shares per day. Imperial’s daily purchase limit under the new program will be 312,512 shares, which represents 25 percent of the average daily trading volume.
The acceptance marks the continuation of Imperial’s existing share repurchase program that will expire on June 28, 2021. Under the existing program, which was amended on April 30, 2021, a maximum number of 29,363,070 shares are available for purchase, reduced by the number purchased from ExxonMobil. As of June 18, 2021, Imperial has purchased 7,522,148 shares on the open market and a corresponding 17,205,732 shares from ExxonMobil to maintain its proportionate share ownership at 69.6 percent, representing a total cost of about $982 million and an average cost of $39.73 per share.