IPC Senior Management Change

IPC Senior Management Change

IPC Senior Management Change

August 21, 2020

International Petroleum Corporation (IPC) (TSX, Nasdaq Stockholm: IPCO) is pleased to announce that William Lundin has been appointed as Chief Operating Officer of IPC, effective as of December 1, 2020.

Mike Nicholson, Chief Executive Officer of IPC comments: “William has worked in the engineering and production operations departments at IPC in Canada and prior to that, worked for BlackPearl Resources Inc. which was acquired by IPC in December 2018. He has developed a deep understanding of IPC’s business, operations and sustainability initiatives. William is also currently a director of ShaMaran Petroleum Corp. He will be a very valuable addition to the IPC corporate management team and his appointment further demonstrates the continuing support of the Lundin family. Daniel Fitzgerald has recently announced his resignation from IPC to accept the COO position with Lundin Energy AB. Daniel has been a key member of the senior management team at IPC since our inception in April 2017 and we wish him continued success at Lundin Energy.“

Audiocast – Mike Nicholson and Christophe Nerguararian comment on the Q2 2020 results

Audiocast: Mike Nicholson and Christophe Nerguararian comment on the Q2 2020 results

August 4, 2020

Listen to Mike Nicholson, CEO, and Christophe Nerguararian, CFO, commenting on the Q2 report and the latest developments from IPC on Tuesday, August 4, 2020 at 09:00 CEST.

Link to audiocast presentation

 

You can also dial-in to listen to the presentation on the following telephone numbers:

Canada/International: +1 631 913 1422
UK: +44 333 300 0804
Sweden: +46 85 664 2651

The PIN code for the dial-in presentation is: 51025953#

IPC Second Quarter 2020 Financial Results and Corporate Update

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 Thousands20202019 20202019
Revenue44,929129,357125,465276,777
Gross profit / (loss)(16,537)39,287(28,973)86,172
Net result(1,472)25,744(41,541)58,886
Operating cash flow14,74276,49636,223159,552
Free cash flow71722,756(41,995)74,820
EBITDA12,18774,60031,196156,275
Net Debt341,367239,322341,367239,322

• 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 our spending reductions, operational choices made and our hedging program, IPC was free cash flow neutral during Q2 2020.
• Net debt increased from MUSD 302.5 as at March 31, 2020 to MUSD 341.4 as at June 30, 2020.
• Refinancing of IPC’s RBL credit facilities has been successfully concluded. The International RBL facility size has been increased from MUSD 125 to MUSD 140 and the maturity extended by two and a half years to the end of 2024. The Canadian RBL facility has been refinanced at MCAD 350 and extended until end May 2022. In addition, in early May 2020 and as previously disclosed, a MEUR 13 credit facility was secured in France.

Mike Nicholson, IPC’s Chief Executive Officer, commented,

“The second quarter of 2020 is certainly one that all of us are relieved to see is behind us. The global Covid-19 outbreak and the resulting confinement measures placed on the world’s population led to a collapse in world oil demand, inventories approaching breaking point, and an unprecedented level of volatility and commodity price weakness.

Thankfully though, we have seen encouraging steps taken by OPEC+ and other oil producers that have removed significant supply, helping to deal with the massive demand destruction. Those actions have helped to flatten the curve of inventory builds and have set us on a course expected to rebalance markets in the second half of 2020 and into 2021.

With governments now progressively easing the restrictions that have been imposed to contain the pandemic, together with the enormous financial and fiscal stimulus packages that have been announced, prospects for a rebalancing of the oil market have improved and IPC has started to plan for a recovery in both demand and prices. Clearly though, uncertainties remain around a potential second wave of infections and the impact that could have will determine the pace and magnitude of recovery in oil demand. A recovery in oil prices is likely to take some time, and discipline and compliance on the supply side measures announced by OPEC+ will also be essential.

Update of 2020 Business Plan
Given that IPC operates the majority of our assets, we had the financial and operational flexibility to react swiftly to the situation and to positively position the Corporation to navigate through this period of extremely low commodity prices. All remaining discretionary 2020 expenditures were deferred or cancelled. In addition, during the second quarter of 2020, we took the decision to temporarily curtail production from those fields that were not expected to generate positive cash flows at the low pricing levels we were experiencing. These production curtailments related to a portion of our oil production. Our Canadian gas production was not curtailed as we continue to forecast positive cash flows.

In our latest Q1 2020 guidance, we revised our forecast 2020 net average production to be in the range of 30,000 to 37,000 boepd, estimated operating costs for 2020 to be in the range of USD 12 to 13 per boe, and reductions in total forecast 2020 expenditure of between MUSD 175 and 190 as compared to 2020 Capital Markets Day (CMD) estimates.

The upper end of our Q1 2020 production guidance assumed that curtailments implemented in Canada to the end of June 2020 continued through to the end of the year, with the lower end of the range assuming full curtailment of our Canadian oil production in the second half of 2020.

Given the improvement in our business outlook with strengthening oil prices, and in particular the strengthening in Canadian crude oil pricing, we have taken the decision to progressively bring back on stream our oil production from our Suffield Oil asset and our Onion Lake Thermal asset. In addition, in France, the temporary suspension of operations at the Total-operated Grandpuits refinery was lifted in early June and production from our Paris Basin assets has recovered to pre-curtailment levels.

As a result, we now forecast our 2020 net average production to be above the upper end of our previous guidance with a new range of 37,000 to 40,000 boepd.

Following these revisions, IPC’s estimated 2020 capital and decommissioning expenditures are marginally increased by MUSD 3 to MUSD 80 and IPC’s forecast 2020 unit operating costs are unchanged at USD 12 to 13 per boe.

Maximizing Financial Flexibility
During the second quarter of 2020, we have been working closely with our International and Canadian banking partners to maximize our financial flexibility.

We are pleased to report that we have successfully concluded our discussions with our international banking partners to increase and extend the maturity of our existing RBL facility. Our facility size is increased by MUSD 15 to MUSD 140 and the maturity is extended by two and a half years to the end of 2024. The facility size does not commence amortization until the second half of 2022 and is fully available.

In Canada, we also successfully concluded discussions with our banking partners. Our primary Canadian RBL facility, previously sized at MCAD 375 was refinanced at MCAD 350 and the maturity was extended by one year to end of May 2022. This new facility was concluded without having to access any of the financial support packages that were previously announced by the Canadian Federal Government, through Export Development Canada (EDC). Further, the leverage ratio was removed from the extended Canadian RBL facility and we are required to hedge a minimum of 30% of forecast production in Canada for the period from October 1, 2020 to June 30, 2021.

As previously disclosed in May 2020, IPC gained access to an unsecured French Government backed loan of MEUR 13. This unsecured loan carries the lowest margin of our loan portfolio and does not have any financial covenants.

Our overall cost of funding will increase slightly following the conclusion and extension of our finance facilities. Our weighted average cost of debt for the second half of 2020 is expected to increase to approximately 4.5%, an increase of around 1% compared with the first half of 2020 under the previous facilities but in line with the weighted average cost of debt of 2019.

In summary, during the second quarter of 2020, we have been able to increase the size of our available credit facilities by more than MUSD 10 whilst extending their maturities and removing any leverage ratio. This demonstrates the strong support we have been able to maintain from our banking partners.

Furthermore, IPC has decided to extend our Canadian oil price hedging program through the remainder of 2020 in order to lock in additional positive cash flow as we restore some of our curtailed production at our Suffield and Onion Lake properties. During June and July 2020, we have put in place additional oil hedges and have now hedged close to two thirds of our forecast Canadian oil production for the third quarter of 2020 and close to half of our forecast Canadian oil production for the fourth quarter of 2020 at WCS prices averaging USD 28 and 25 per barrel respectively.

Having refinanced and extended the maturities of both our Canadian and International credit facilities in June and July 2020, we have now MUSD 90 of undrawn financial headroom. Assuming average second half 2020 Brent oil prices of USD 35 per barrel and average second half 2020 WCS oil prices of USD 22 per barrel, we expect to be free cash flow positive for the second half of 2020 and assuming the Granite credit facility is refinanced before the end of 2020, we project year end financial headroom in excess of MUSD 100. This represents a significant improvement from our first quarter guidance where we forecasted using up to 40% of that available headroom had commodity prices remained weak. This demonstrates that IPC has managed to preserve our financial resilience through this period of extreme volatility.

Second Quarter Performance
During the second quarter of 2020, our assets delivered average daily net production of 35,700 boepd, in line with our Q1 2020 guidance. Our operating costs per boe for the second quarter of 2020 was USD 10.7, slightly ahead of our Q1 2020 guidance.

Operating cash flow generation for the second quarter amounted to MUSD 14.7, ahead of our Q1 forecast as a result of oil prices strengthening through June. Moreover, as a result of our spending reductions, operational choices made and our hedging program, IPC was free cash flow neutral during the second quarter of 2020.

Capital and decommissioning expenditures during the second quarter of 2020 of MUSD 8.4 was in line with forecast and reflects the implementation of our expenditure reduction program previously announced.

Net debt increased during the second quarter of 2020 by MUSD 39 to MUSD 341. The increase was driven by non-cash exchange rate movements as a result of the Canadian dollar strengthening against the US dollar during the quarter (MUSD 10) as well as negative working capital movements (MUSD 29).”

 

Link to Webcast Presentation

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Q2 2020 MD&A (regulatory)
04.08.2020, 480 KB

 

IPC to release 2020 Second Quarter Financial Results on 4 August 2020

IPC to release 2020 Second Quarter Financial Results on 4 August 2020

IPC to release 2020 Second Quarter Financial Results on 4 August 2020

July 30, 2020

International Petroleum Corporation (IPC) (TSX, Nasdaq Stockholm: IPCO) will publish its financial and operating results and related management’s discussion and analysis for the six months ended June 30, 2020, on Tuesday, August 4, 2020 at 07:30 CET, followed by an audio cast at 09:00 CET.

Listen to Mike Nicholson, CEO, and Christophe Nerguararian, CFO, commenting on the report and the latest developments from IPC.

Follow the presentation live, webcast link: https://ipc.videosync.fi/2020-08-04-q2.

You can also dial-in to listen to the presentation on the following telephone numbers:

Canada/International: +1 631 913 1422
UK: +44 333 300 0804
Sweden: +46 85 664 2651

The PIN code for the dial-in presentation is: 51025953#

Audiocast – Mike Nicholson and Christophe Nerguararian comment on the Q1 2020 results

Audiocast: Mike Nicholson and Christophe Nerguararian comment on the Q1 2020 results

May 6, 2020

Listen to Mike Nicholson, CEO, and Christophe Nerguararian, CFO, commenting on the Q1 report and the latest developments from IPC on Wednesday, May 6, 2020 at 09:00 CEST.

Follow the presentation live on www.international-petroleum.com.

You can also dial-in to listen to the presentation on the following telephone numbers:

Canada/International: +1 631 913 1422
UK: +44 333 300 0804
Sweden: +46 85 664 2651

The PIN code for the dial-in presentation is: 51025953#

Link to audiocast presentation

IPC First Quarter 2020 Financial Results and Corporate Update

IPC First Quarter 2020 Financial Results and Corporate Update

IPC First Quarter 2020 Financial Results and Corporate Update

May 6, 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 three months ended March 31, 2020.

Corporate Update

  • In the April 2, 2020 press release, IPC revised its forecast 2020 net average production to be in the range of 30,000 to 45,000 barrels of oil equivalent (boe) per day (boepd), estimated operating costs for 2020 to be in the range of USD 12 to 13 per boe, and reductions in total forecast 2020 expenditure of between USD 125 and 190 million as compared to estimates announced at IPC’s Capital Markets Day (CMD) in February 2020.
  • Operational decisions that IPC has subsequently made allow it to revise the forecast 2020 expenditure reductions to between USD 175 and 190 million as compared to CMD estimates. This comprises USD 85 million in reduced capital and decommissioning expenditures and USD 90 to 105 million in reduced operating costs. As a result, IPC’s forecast 2020 net average production guidance range is 30,000 to 37,000 boepd. IPC’s estimated 2020 capital and decommissioning expenditures are USD 77 million and IPC’s forecast 2020 operating costs are in the range of USD 140 to 155 million, resulting in estimated 2020 unit operating costs in the range of USD 12 to 13 per boe.
  • Financial headroom under the current terms of IPC’s existing and new credit facilities has increased to in excess of USD 100 million.
  • Assuming average 2020 Brent oil prices of USD 25 per barrel and assuming Western Canadian Select (WCS) oil prices are at zero for the remainder of the year, IPC expects to utilize less than 40% of its existing financial headroom.
  • In March 2020, IPC announced the completion of the acquisition of Granite Oil Corp. (the Granite Acquisition), comprising light oil proved plus probable reserves of 14.0 million barrels of oil equivalent (MMboe) and 6.2 MMboe of contingent resources (best estimate, unrisked) as at December 31, 2019.

Q1 2020 Financial and Operational Highlights

  • Average net production of approximately 46,000 boepd for Q1 2020 (43% heavy crude oil, 20% light and medium crude oil and 37% natural gas).
  • First quarter 2020 operating costs per boe of USD 12.5, slightly ahead of Q1 2020 guidance.
  • In connection with IPC’s revised 2020 business plan, operational activities and capital expenditures have been reduced, deferred or cancelled in each region in response to the low oil price environment.
Three months ended March 31
USD Thousands20202019
Revenue80,536147,420
Gross profit(12,436)46,885
Net result(40,069)33,142
Operating cash flow21,48183,056
Free cash flow(42,712)52,064
EBITDA19,00981,675
Net Debt302,473256,962
  • Net debt increased from USD 291 million as at December 31, 2019 (including the cost of the Granite Acquisition) to USD 302.5 million as at March 31, 2020.
  • Operating cash flow generation for Q1 2020 amounted to USD 21.5 million, below the original CMD guidance as a result of the weakness in commodity prices towards the end of Q1 2020. This coincided with two cargo liftings in Malaysia in March 2020 when Brent prices averaged USD 32 per bbl and the falling commodity prices also impacted the revenues in France where pricing is based on one month forward Brent prices.
  • Under the previously announced share repurchase program, IPC repurchased for USD 17.6 million and cancelled approximately 4.4 million IPC shares during Q1 2020, in addition to the 3.9 million IPC shares cancelled in 2019. In order to conserve liquidity, IPC has suspended further share repurchases under the program.

Mike Nicholson, IPC’s Chief Executive Officer, commented,
“Given the extraordinary market situation that the oil and gas business is facing in response to the global Covid-19 outbreak, the resulting collapse in world oil demand, and the initial breakdown in co-operation among the OPEC+ group in dealing with the supply challenge, we have witnessed an unprecedented level of volatility and commodity price weakness during 2020. As a result of this, IPC announced on April 2, 2020 that we are taking decisive action to reset our 2020 expenditure plans in order to maximize the financial flexibility of the Corporation.

Since that announcement, we have seen encouraging steps taken by OPEC+, G20 nations and oil producers that we are confident should remove significant supply, helping to deal with the massive demand destruction that we have witnessed as well as the inevitable inventory build. We expect that these actions should flatten the curve of inventory builds and set a course to rebalance markets in the second half of 2020 and into 2021. Clearly though, the magnitude and pace of the recovery in oil demand will be critical in reducing the uncertainty around when oil prices will recover.

Reset of 2020 CMD Business Plan
Given that IPC operates the majority of our assets, IPC has the financial and operational flexibility to react swiftly to recent events and to positively prepare the Corporation to navigate through this period of extremely low commodity prices. All remaining discretionary 2020 expenditures have been deferred or cancelled and we have built into our forecast production range the temporary curtailment of production from those fields that are not expected to generate positive cash flows at these low pricing levels. These production curtailments relate to a portion of our oil production. Our Canadian gas production is not curtailed as we currently forecast positive cash flows.

In our April 2, 2020 announcement, we revised our forecast 2020 net average production to be in the range of 30,000 to 45,000 boepd, estimated operating costs for 2020 to be in the range of USD 12 to 13 per boe, and reductions in total forecast 2020 expenditure of between USD 125 and 190 million as compared to 2020 CMD estimates.

Operational decisions that we have subsequently made allow us to revise our forecast 2020 expenditure reductions to between USD 175 and 190 million as compared to CMD estimates. This comprises USD 85 million in reduced capital and decommissioning expenditures and USD 90 to 105 million in reduced operating costs. As a result, our forecast 2020 net average production guidance range is 30,000 to 37,000 boepd. IPC’s estimated 2020 capital and decommissioning expenditures are USD 77 million and IPC’s forecast 2020 operating costs are in the range of USD 140 to 155 million, resulting in estimated 2020 unit operating costs in the range of USD 12 to 13 per boe. The upper end of our revised production guidance assumes that the curtailments in Canada to the end of June 2020 continue through to the end of the year, with the lower end of the range assuming full curtailment of our Canadian oil production in the second half of 2020. We retain the flexibility to ramp production back up during the second half of 2020 should market conditions improve.

Maximizing Financial Flexibility
Having reset our 2020 business plan, we have also been very active in engaging with our banks to ensure that we can maximize our financial flexibility. As at the end of the first quarter 2020, we had available liquidity headroom of around USD 90 million under our existing international and Canadian credit facilities. We commenced discussions with our international banking partners to potentially extend the maturity of and increase our existing reserves-based lending (RBL) credit facility as we do not believe that this was fully maximized under previous conditions. In parallel, we have been exploring IPC’s ability to access some of the special financial assistance packages being offered by the government authorities in France.

I am very pleased to report a positive outcome on the latter. We have been able to secure a EUR 13 million credit facility from a French financial institution under this program. The credit facility has an initial term of 12 months and is extendable by IPC for up to a further five years. The credit facility is unsecured and is on less expensive terms than IPC’s existing credit facilities.

In Canada, we have also commenced discussions with our banking partners. Our primary Canadian RBL facility is currently sized at CAD 375 million and we have drawn CAD 297 million at the end of the first quarter. Whilst our RBL redetermination discussions are not expected to be completed until later in Q2 2020, we have been encouraged by the financial support package that has been announced by the Canadian Federal Government, through Export Development Canada (EDC). This program aims to support the oil and gas sector by maintaining liquidity during the crisis, through the form of guarantees provided by EDC in respect of RBL facilities. Our CAD 42.5 million facility assumed as part of the Granite Acquisition is not up for review until the year end. This is currently drawn at CAD 40 million.

In addition, IPC has the benefit of a hedging program in Canada in place through to the end of June 2020, that is expected to provide a minimum average realized WCS price of approximately USD 16 per bbl on our curtailed oil production levels in Canada during Q2 2020.

We retain access to financial headroom under the current terms of our existing and new credit facilities available to us in excess of USD 100 million. Taken together with our operational choices and updated hedging program, we expect to be able to fully fund our revised 2020 expenditure program from cash flows and current borrowing capacity. Assuming average 2020 Brent oil prices of USD 25 per barrel and assuming WCS oil prices are at zero for the remainder of the year, we expect to utilize less than 40% of our existing liquidity headroom. This demonstrates the financial resilience of IPC to respond to sustained low oil prices.

Q1 2020 Performance
During Q1 2020, our assets delivered average daily net production of 46,000 boepd, in line with our original CMD Q1 2020 guidance. Our operating costs per boe for Q1 2020 was USD 12.5, slightly below our original CMD Q1 2020 guidance.

Operating cash flow generation for the first quarter amounted to USD 21.5 million, below our original CMD guidance as a result of the weakness in commodity prices towards the end of Q1 2020. This coincided with two cargo liftings in Malaysia in March 2020 when Brent prices averaged USD 32 per bbl and the falling commodity prices also impacted the revenues in France where pricing is based on one month forward Brent prices.

Capital expenditure during Q1 2020 of USD 56 million was around USD 6 million below forecast as we began implementation of our expenditure reduction program.

Net debt increased from the 2019 year end level of USD 291 million (including the cost of the Granite Acquisition) to USD 302.5 million as at March 31, 2020 which also includes the funding of USD 17 million of share repurchases under the share repurchase program in Q1 2020.”

Link to Webcast Presentation

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Q1 2020 MD&A (regulatory)
06.05.2020, 296 KB

IPC announces 2020 Annual General Meeting voting results

IPC announces 2020 Annual General Meeting voting results

IPC announces 2020 Annual General Meeting voting results

May 5, 2020

International Petroleum Corporation (IPC or the Corporation) (TSX, Nasdaq Stockholm: IPCO) is pleased to announce the voting results from the Corporation’s 2020 Annual General Meeting of Shareholders (the 2020 AGM) held on May 5, 2020 in Toronto, Ontario.

Number of Directors
The number of Directors of the Corporation was set at seven.

Votes For% ForVotes Against% Against
61,956,50299.99%8,5020.01%

Election of Directors
The seven nominees listed in the Corporation’s management information circular dated March 25, 2020 were elected as Directors of the Corporation to hold office for the ensuing year.

NomineeVotes For% ForVotes Withheld% Withheld
Mike Nicholson61,957,96899.99%7,0350.01%
C. Ashley Heppenstall61,267,78798.87%697,2161.13%
Donald K. Charter61,905,35099.90%59,6530.10%
Chris Bruijnzeels61,945,09199.97%19,9120.03%
Torstein Sanness61,693,87699.56%271,1270.44%
Daniella Dimitrov61,950,66299.98%14,3410.02%
Harry Lundin61,955,44199.98%9,5620.02%

The Directors appointed C. Ashley Heppenstall as Chairman of the Board.

Appointment of Auditor
PricewaterhouseCoopers SA was appointed as auditor of the Corporation for the ensuing year and the Directors of the Corporation were authorized to fix the remuneration of the auditor.

Votes For% ForVotes Withheld% Withheld
62,123,78799.73%168,9350.27%

 

IPC to release 2020 First Quarter Financial Results on May 6, 2020

IPC to release 2020 First Quarter Financial Results on May 6

IPC to release 2020 First Quarter Financial Results on May 6, 2020

May 1, 2020

International Petroleum Corporation (IPC) (TSX, Nasdaq Stockholm: IPCO) will publish its financial and operating results and related management’s discussion and analysis for the three months ended March 31, 2020, on Wednesday, May 6, 2020 at 07:30 CET, followed by an audio cast at 09:00 CET.

Listen to Mike Nicholson, CEO, and Christophe Nerguararian, CFO, commenting on the report and the latest developments from IPC.

Follow the presentation live on www.international-petroleum.com.

You can also dial-in to listen to the presentation on the following telephone numbers:

Canada/International: +1 631 913 1422
UK: +44 333 300 0804
Sweden: +46 85 664 2651

The PIN code for the dial-in presentation is: 51025953#

IPC Announces Revised 2020 Expenditure Plans

IPC Announces Revised 2020 Expenditure Plans

IPC Announces Revised 2020 Expenditure Plans

April 2, 2020

International Petroleum Corporation (IPC or the Corporation) (TSX, Nasdaq Stockholm: IPCO) announces its plans to reduce total forecast 2020 expenditure by between USD 125 and 190 million. IPC’s revised total estimated 2020 capital and decommissioning expenditures account for approximately USD 85 million of the total forecast reduction. IPC’s total forecast 2020 operating costs are revised downwards by between USD 40 and 105 million, depending on production levels and commodity prices.

Mike Nicholson, IPC’s Chief Executive Officer, comments: “Following the extraordinary developments in the world since we released our 2020 budget and production guidance and held our 2020 Capital Markets Day in February, IPC is taking decisive action to reset our 2020 expenditure plans in order to maximise the financial flexibility of the Corporation.

Given that we operate the majority of our assets, IPC has significant financial and operational flexibility to react swiftly to recent events and to positively prepare the Corporation to navigate through this period of extremely low commodity prices. All remaining discretionary 2020 expenditures have been deferred or cancelled and we have built into our forecast range the temporary curtailment of production from those fields that are not expected to generate positive cash flows at these low pricing levels. These proposed production curtailments relate to our oil production, as we currently forecast positive cash flows from our gas production in Canada. We currently expect our 2020 net average production to be in the range of 30,000 to 45,000 barrels of oil equivalent (boe) per day, depending on how commodity prices evolve over the remainder of 2020 and the operational choices that we make to maximise the liquidity position of the Corporation. Operating costs for 2020 are expected to be in the range of USD 12 to 13 per boe.

We retain access to significant financial headroom, with undrawn amounts under existing credit facilities currently at around USD 90 million.

We expect to be able to fully fund our revised 2020 expenditure program from cash flows and current borrowing capacity. Assuming average 2020 Brent oil prices of USD 25 per barrel and assuming Western Canadian Select oil prices are at zero for the remainder of the year, we would expect to utilise around half of our liquidity headroom. This demonstrates the financial resilience of IPC to respond to sustained low oil prices.

The situation around the Covid-19 outbreak continues to evolve in all of our countries of operation. We are focused on protecting the health and safety of our employees, contractors and other stakeholders, while also working to ensure business continuity. The revised expenditure program and changes to operations will commence immediately. The Corporation will continue to monitor the commodity price outlook, as well as the restrictions and potential disruptions relating to the Covid-19 outbreak, and IPC has the ability to make further adjustments to these forecasts as needed.”

IPC Updated Share Capital

IPC Updated Share Capital

March 31, 2020

International Petroleum Corporation (IPC or the Corporation) (TSX, Nasdaq Stockholm: IPCO) reports the following, in accordance with the Swedish Financial Instruments Trading Act:

Following the cancellation of 42,336 common shares repurchased by IPC under the share repurchase program announced on November 7, 2019, the total number of issued and outstanding common shares of the Corporation is 155,342,757 common shares with voting rights.

 

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IPC Updated Share Capital
31.03.2020, 56.05 KB