IPC second quarter 2020 financial results and corporate update

August 4, 2020

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 for the six months ended June 30, 2020.

Business Update

• Forecast 2020 net average production revised upwards to 37,000 to 40,000 barrels of oil equivalent per day (boepd) from the previous guidance of 30,000 to 37,000 boepd.
• Capital and decommissioning expenditure guidance marginally increased by MUSD 3 to MUSD 80.
• Financial flexibility strengthened with the refinancing of our International and Canadian Reserve Based Lending (RBL) credit facilities in addition to securing a new MEUR 13 unsecured credit facility in France.
• Assuming average Brent oil prices of USD 35 per barrel and average Western Canadian Select (WCS) oil prices of USD 22 per barrel for the second half of 2020, IPC expects to be free cash flow positive for that period and to have access to more than MUSD 100 of spare financial headroom by year end 2020.

Q2 2020 Financial and Operational Highlights

• Average net production of approximately 35,700 boepd for Q2 2020 (31% heavy crude oil, 22% light and medium crude oil and 47% natural gas).
• Operating costs of USD 10.7 per boe for Q2 2020, slightly ahead of Q1 guidance. Full year forecast retained at USD 12 to 13 per boe.

	Three months ended June 30			Six months ended June 30
USD Thousands	2020	2019		2020	2019
Revenue	44,929	129,357		125,465	276,777
Gross profit / (loss)	(16,537)	39,287		(28,973)	86,172
Net result	(1,472)	25,744		(41,541)	58,886
Operating cash flow	14,742	76,496		36,223	159,552
Free cash flow	717	22,756		(41,995)	74,820
EBITDA	12,187	74,600		31,196	156,275
Net Debt	341,367	239,322		341,367	239,322

• Operating cash flow generation for the second quarter 2020 amounted to MUSD 14.7, ahead of our latest forecast as a result of oil prices strengthening through June 2020. Moreover, as a result of