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Imperial Oil continues existing share repurchase program
| Calgary, AB, June 21, 2007
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Imperial Oil Limited today announced it has received final acceptance from the Toronto Stock Exchange for a new normal course issuer bid to continue its existing share repurchase program facility that will expire on June 22, 2007.
The new program enables the company to repurchase up to five percent of its currently 929,199,351 outstanding common shares, or a maximum of 46,459,967 shares during the next 12 months. That total will include shares purchased for the company's employee savings plan and employee retirement plan. Shares purchased under the normal course issuer bid are cancelled.
The new program will begin on June 25, 2007, and will end when the company has purchased the maximum allowable number of shares, unless it provides earlier notice of termination. If not previously terminated, the program will end on June 24, 2008. All share purchases will be made through the Toronto Stock Exchange.
Exxon Mobil Corporation has advised Imperial that it will participate in the new program, as it has in the existing one, to maintain its ownership percentage in Imperial at 69.6 percent. ExxonMobil said it will review its participation from time to time and inform Imperial of any change in its intentions. Where Imperial purchases shares from ExxonMobil on any day, such purchases will occur during the Special Trading Session of the Toronto Stock Exchange at a price equal to the price of the latest independent trade of a board lot of Imperial's shares that day on the Toronto Stock Exchange.
The Toronto Stock Exchange has provided Imperial with exemptive relief that will allow it to exclude the shares to be purchased from ExxonMobil in complying with the limit restricting it from purchasing on any trading day no more than 25% of the average daily trading volume during the six calendar month period prior to the commencement of the new program.
From time to time Imperial expects to have cash in excess of its
day-to-day operating and capital investment needs. After considering alternative means of distributing excess cash to shareholders, the board of directors of Imperial has concluded that it would be in the best interests of Imperial and its shareholders to proceed with the normal course issuer bid. It is a flexible and reasonable way of rebalancing Imperial's capital structure while distributing a portion of its cash reserves to shareholders who choose to participate by selling their shares. ExxonMobil's participation in the normal course issuer bid will permit ExxonMobil to maintain (rather than increase) its current percentage ownership level of shares.
In addition, Imperial introduced a stock option plan in 2002 for selected directors and key employees. Since there could be a dilution in the percentage ownership levels of shareholders that would result from the issue of shares on the exercise of stock options, Imperial considers that it would be in the best interests of Imperial and its shareholders to proceed with the normal course issuer bid in order to reduce or eliminate such dilution. The company has no plans to issue stock options in the future.
Share repurchases under the existing program had reached 47.1 million shares (on a post share split basis) at a total cost of about $2.0 billion by June 14, 2007, representing an average cost of $42.67 per share. The maximum allowable number of shares that could be acquired under the program was about 48.8 million (on a post share split basis), including shares purchased for the employee savings plan and retirement plan.
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