CALGARY -- Imperial Oil's (TSX:IMO) profits plunged 90 per cent during the second quarter thanks to a sharp drop in oil prices.

The Calgary-based oil producer and refiner, majority owned by U.S. heavyweight ExxonMobil Corp., earned $120 million during the quarter, down from $1.2 billion during the same period a year ago.

The profit amounted to 14 cents a share, down from $1.45 per share in the same quarter last year.

U.S. benchmark crude prices were 44 per cent lower in the second quarter of this year versus in 2014. West Texas Intermediate settled at $47.12 on Friday.

Also Friday, Imperial bumped its quarterly dividend by a penny to 14 cents.

Its $9-billion Kearl oilsands expansion started up during the quarter, about five months ahead of schedule.

Total bitumen output from the Kearl development, a massive mine north of Fort McMurray, Alta., averaged 130,000 barrels per day in the quarter, up from 73,000 barrels a year earlier and 95,000 barrels during the first quarter.

"Kearl crushes it," was the headline of a research note by CIBC analyst Arthur Grayfer.

The expansion project ran at more than 100,000 barrels a day.

"While this is only one month, it is encouraging as we didn't expect (the Kearl Expansion Project) to consistently achieve that level until mid-2016," he wrote.

Imperial also took the first step in the regulatory process for a new oilsands project in the Cold Lake area in eastern Alberta, where it already has extensive operations.

The company hasn't made an official decision to develop the property, called Midzaghe. But filing a project description with the Alberta Energy Regulator sets the stage for consultations with local communities.

Midzaghe, with more than 500 million barrels of recoverable reserves, would use solvents and steam to draw bitumen from deep underground -- a different process than what Imperial already uses at Cold Lake.

Also Friday, Imperial said it took a $320-million charge in the quarter from an increase in Alberta's corporate income tax.

It also earned $478 million from the sale of some upstream production assets in the same period last year.

Gross production of oil increased in the quarter to 344,000 barrels per day from 287,000 barrels per day last year, reaching the highest production level in nearly eight years.

Imperial processed fewer barrels of oil per day at its refineries compared with the second quarter of 2014, an average of 373,000 barrels per day compared to 418,000 per day last year, as it did routine maintenance work on its Sarnia, Ont., plant.

Second-quarter capital and exploration spending amounted to $819 million, down from nearly $1.4 billion in the same period last year.