The company's shares have been under pressure because of a lack of production growth and cost overuns on a key project. The company, however, can considerably increase its output in the near future, a potential boon for its shares.
The stock has fallen 0.9% this year, and closed at $43.85 on Wednesday. It is priced at 10 times Imperial's current year's earnings estimate, which is cheaper than its parent company, Exxon Mobil (XOM), which trades at 12.5 times this year's earnings estimate. Exxon owns 70% of Imperial.
Imperial Oil has three segments -- exploration and production, refining and chemicals. It focuses on the production of unconventional oil from oil sands and has 3.6 billion barrels of proved reserves, of which 58% are developed.
The company is developing the Kearl oil-sands project in Alberta, which will boost Imperial's production levels greatly when it is completed. In the fourth quarter, Imperial Oil's production from Kearl was 52,000 barrels per day, considerably below its capacity of 110,000 barrels per day. Investors were expecting better numbers.
What's more, the Kearl project now has an estimated price tag of almost $12 billion, compared with earlier estimates of less than $8 billion.
The slow start-up and the costs -- combined with broader oil-supply issues in Canada and the environmental concerns related to the development of unconventional oil -- have weighed on Imperial's shares. They have lagged shares of other Canadian energy companies, such as Suncor Energy (SU) and Canadian Natural Resources (CNQ).