How much cash does Imperial Oil really make, and what is a share of it worth?

The words on this page

Real cash (true cash)

What was left in the bank each year after every bill, every tax payment and every well drilled. Not profit, and not "cash flow" as companies usually quote it, which leaves the drilling out. The strictest number there is.

Required return

The yearly return you insist on for taking the risk. A dollar promised in ten years is worth less than a dollar today; this rate says how much less. 9% is a common professional figure for a large Canadian producer; the reserve engineers use 10%.

Well life (reserve life)

How long the wells keep producing. After the life you choose, nothing is counted. Imperial reports SEC-style proved reserves only, 2,036 million oil-equivalent barrels net at year-end 2025, about 14 years of its net production. It publishes no probable reserves, and as an integrated company with refining and chemicals, reserve life only constrains the upstream half; the 25 year default reflects that.

What a share is worth

Every future year's cash, shrunk back to today's dollars at your required return, added up, less the debt, less the cost of cleaning up the wells, divided by the number of shares. Pay less than this and you earn more than your required return; pay more and you earn less.

Where the default growth comes from

The 3% default comes from Imperial's 2026 guidance of 441,000 to 460,000 gross barrels a day against 438,000 in 2025, with Kearl and Cold Lake working toward 300,000 and 165,000 barrels a day.

The arithmetic, step by step

1. Count the real cash each past year: cash generated by operations as reported, plus interest paid put back, minus rent on leases, minus every dollar spent on wells and plants. Buying and selling assets is shown separately.
2. Project it. The starting cash you choose (an average of the history, or the latest year) grows at your growth dial for ten years, then at the long-run rate for as long as the wells keep producing. Nothing is counted after the well life ends.
3. Bring it back to today. Each year's cash is shrunk by your required return, counted at mid-year because cash arrives through the year rather than on 31 December.
4. Turn it into a share value. Add up the shrunk cash; take off net debt of C$1,149M; take off the C$3,530M cost of cleaning up the wells if that switch is on; divide by 483.6M shares.
5. Work it backwards. "The growth today's price assumes" is the ten-year growth rate at which this start is worth exactly the share price.

Where the numbers come from

• Every year from 2016 to 2025 was hand-checked against the audited consolidated statements in Imperial's 10-K filings with the SEC (the fiscal 2018, 2019, 2021, 2024 and 2025 10-Ks), all in Canadian dollars; net debt at June 30, 2026 and the share count come from the second quarter 2026 10-Q.
• Imperial is integrated: production covers the upstream business only, while refining, chemicals and marketing earn much of the cash, so reserve life is not the whole story. The 25 year life default is a judgement call for an integrated company.
• Interest is cash interest paid net of capitalized amounts. Imperial capitalizes most of its interest into projects, which is why the figure looks small: in 2025 it paid $28 million net while capitalizing $105 million. The 2016 figure is the cash interest payment disclosed in the fiscal 2018 10-K financing note, which does not state a capitalization basis.
• Lease payments combine the operating lease payments inside operating cash flows with the finance lease principal payments in financing cash flows, as disclosed in the 10-K lease notes, from 2019 when the new lease standard took effect; before that, rent was an ordinary operating expense already inside operating cash flow, so earlier years show zero.
• Imperial made no material cash acquisitions in these ten years, so the acquisitions row is zero throughout.
• Net debt is long-term debt plus the current portion, including finance leases but not operating leases, minus cash.
• Production figures quoted are gross before royalties; net production in 2025 was 387,000 barrels a day, and the reserve life uses the net figures.
• The analyst consensus target sits below the current price; we show it as reported.
• Analyst targets: average C$157.24 across 18 analysts (stockanalysis.com analyst consensus, 30 August 2026).

For the technically minded

The method is the one used to evaluate capital projects, from Ted Lawrence, The Business Guide to Economic Evaluations: Projects, Leases, Tariffs and Acquisitions (2017). "Real cash" is the book's project cash flow (chapter 3) with depreciation, debt servicing and debt-like leases restructured out (chapters 4, 5 and 19); short operating leases stay in as a cost of producing, a chapter 19 judgment. The value per share follows the share-purchase evaluation of chapter 20: present value of the company's cash flows at the cost of capital (chapter 10), mid-year discounting (chapter 12), plus non-required assets, less net debt and the decommissioning liability. "What you gain or lose" is the bid-curve NPV of chapter 20; "when you get your money back" is the discounted payout of chapter 13; the bars follow the project profile of chapter 6. The reverse solve on growth is a plain reverse DCF.

Discount-rate anchors: 9% is a common cost-of-equity figure for a large Canadian producer and 10% is the reserve-report convention (PV10). The long-run rate defaults to 0% here: a depleting resource should not be assumed to grow forever, so anything above zero is a judgment you make with the dial.