2018 year-end financial results and 2019 budget, production and resource guidance

February 12, 2019

International Petroleum Corporation (IPC or the Corporation) (TSX, Nasdaq Stockholm: IPCO) today released its financial and operating results and related management’s discussion and analysis (MD&A) for the year ended December 31, 2018.(1) IPC is also pleased to announce its 2019 capital expenditure budget range of between USD 146 and 166 million and its 2019 production guidance of between 46,000 and 50,000 barrels of oil equivalent (boe) per day (boepd). 2018 year-end 2P reserves and best estimate contingent resources (unrisked) are respectively 288 million boe (MMboe) and 849 MMboe.(2)

2018 Business Development Highlights
• Average net production of 35,200 barrels of oil equivalent (boe) per day (boepd) for the third quarter of 2018 at the high end of the guidance range; strong performance from all assets.
• Completion of the acquisition of conventional oil and gas assets in the Suffield area of southern Alberta, Canada in January 2018.
• Completion of the acquisition of BlackPearl Resources Inc. (BlackPearl) in December 2018.
• Completion of the disposal of IPC’s non-core, non-operated gas assets in the Netherlands in December 2018.

2018 Financial and Operational Highlights(3)
• Average net production of 34,600 boepd for the fourth quarter of 2018 and 34,400 boepd for the full year 2018, above the high end of the 2018 capital markets day (CMD) guidance range.
• Greater than 100% 2P reserves replacement ratio in 2018, excluding 2P reserves acquired in the acquisition of BlackPearl.(4)
• 2P reserves more than doubled to 288 MMboe as at December 31, 2018, including the 2P reserves acquired in the acquisition of BlackPearl, compared to December 31, 2017.(2)
• Thirteen-fold increase in best estimate contingent resources (unrisked) to 849 MMboe as at December 31, 2018, including the contingent resources acquired in the acquisition of BlackPearl, compared to December 31, 2017.(2)
• Operating costs per boe of USD 12.4 for the full year 2018, lower than the 2018 CMD guidance.(5)
• Sanctioned third phase of infill drilling in Malaysia for 2019 execution.
• Sanctioned the Vert La Gravelle development in France for 2019 execution.
• 2018 operating cash flow generation of USD 279 million.(5)
• Net debt reduced by USD 190 million to USD 166 million as at December 31, 2018, from USD 355 million at the completion of the acquisition of the Suffield area assets in January 2018. Including the net debt acquired in the BlackPearl acquisition, net debt of IPC was USD 277 million as at December 31, 2018.(5)

Three months ended December 31   Year ended December 31
USD Thousands 2018 2017   2018 2017
Revenue 111,898 54,647 454,443 203,001
Gross profit 26,311 13,471 146,864 48,758
Net result 29,346 8,977 103,644 22,723
Operating cash flow(5) 58,322 37,156 279,018 138,368
EBITDA(5) 58,032 33,383