International Petroleum Corporation
Audited Consolidated Financial
For the years ended December 31, 2021 and 2020
Report of Management 3
Report of Independent Auditor 4
Consolidated Statement of Operations 9
Consolidated Statement of Comprehensive Income 10
Consolidated Balance Sheet 11
Consolidated Statement of Cash Flow 12
Consolidated Statement of Changes in Equity 13
Notes to the Consolidated Financial Statements 14
Consolidated Financial Statement
For the years ended December 31, 2021 and 2020, AUDITED
The accompanying consolidated financial statements of International Petroleum Corporation (“IPC” or the “Corporation” and,
together with its subsidiaries, the “Group”) and other information contained in the management’s discussion and analysis are the
responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been
prepared by management in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International
Accounting Standards Board (“IASB”) as outlined in Part 1 of the Handbook of the Chartered Professional Accountants of Canada,
and include some amounts that are based on management’s estimates and judgment.
The Board of Directors carries out its responsibility for the consolidated financial statements principally through its Audit
Committee, which is comprised solely of independent directors. The Audit Committee reviews the Group’s annual consolidated
financial statements and recommends its approval to the Board of Directors. The Corporations auditors have full access to the
Audit Committee, with and without management being present. These consolidated financial statements have been audited by
PricewaterhouseCoopers SA, Chartered Professional Accountants, Licensed Public Accountants.
(Signed) Mike Nicholson (Signed) Christophe Nerguararian
Director, President and Chief Executive Officer Chief Financial Officer
Vancouver, Canada
February 8, 2022
Consolidated Financial Statement
For the years ended December 31, 2021 and 2020, AUDITED
PricewaterhouseCoopers SA, avenue Giuseppe-Motta 50, case postale, CH-1211 Genève 2, Switzerland
Téléphone: +41 58 792 91 00, Téléfax: +41 58 792 91 10, www.pwc.ch
PricewaterhouseCoopers SA is a member of the global PricewaterhouseCoopers network of firms, each of which is a separate and independent legal entity.
Independent auditor’s report
To the Shareholders of International Petroleum Corporation
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial
position of International Petroleum Corporation and its subsidiaries (together, the Corporation) as at December 31,
2021 and 2020, and its financial performance and its cash flows for the years then ended in accordance with
International Financial Reporting Standards (IFRS).
What we have audited
The Corporation’s consolidated financial statements comprise:
x the consolidated statements of operations for the years ended December 31, 2021 and 2020;
x the consolidated statement of comprehensive income for the years then ended;
x the consolidated balance sheet as at December 31, 2021 and 2020;
x the consolidated statements of cash flows for the years then ended;
x the consolidated statements of changes in equity for the years then ended; and
x the notes to the consolidated financial statements, which include a summary of significant accounting policies.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities
under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Corporation in accordance with the ethical requirements that are relevant to our audit of the
consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with
these requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
consolidated financial statements for the year ended December 31, 2021. These matters were addressed in the
context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
Key audit matters
How our audit addressed the key audit
The impact of oil and gas reserves on net property, plant and
equipment (PP&E) for the Canada, Malaysia, and France
Refer to note 1 - Corporate information, note 2 - Critical
accounting estimates and judgements, and note 8 – Oil and Gas
Properties to the consolidated financial statements.
The Corporation has USD 953.5 million of net PP&E assets as at
December 31, 2021. Depletion charges were USD 119.0 million
for the year then ended. PP&E is depleted based on the year’s
production in relation to the estimated total proved and probable
reserves in accordance with the unit of production method.
At each balance sheet date or when there are facts and
circumstances that suggest that the net book value of capitalized
costs within each field area cost centre is higher than anticipated
future net cash flow from oil and gas reserves attributable to the
Corporation’s interest in the related field areas, the Corporation
performs an assessment as to whether there is an indication that
an asset may be impaired. Management determined the
recoverable amounts of PP&E based on the higher of fair value
less costs of disposal and value in use using estimated future
discounted net cash flows of proved and probable oil and gas
reserves. The Corporation’s estimates of proved and probable oil
and gas reserves used in the calculations for impairment tests and
accounting for depletion have been reviewed by Management’s
experts, specifically independent qualified reserves auditor.
Significant assumptions developed by management used to
determine the recoverable amount include the proved and
probable oil and gas reserves, expected production volumes,
future oil and gas prices, future development costs, future
production costs and the discount rate.
We determined that this is a key audit matter due to (i) the
significant judgment made by management, including the use of
management’s experts, when developing the expected future cash
flows to determine the recoverable amount and the proved and
probable oil and gas reserves; and (ii) a high degree of auditor
judgment, subjectivity and effort in performing procedures
and evaluating audit evidence relating to management’s
Our approach to addressing the matter included the
following procedures, among others:
The work of management’s experts was used in
performing the procedures to evaluate the
reasonableness of the proved and probable oil and
gas reserves used to determine depletion charges
and the recoverable amount of PP&E for the
Canada, France and Malaysia segments. As a
basis for using this work, management’s experts’
competence, capability and objectivity were
evaluated, their work performed was understood
and the appropriateness of their work as audit
evidence was evaluated by considering the
relevance and reasonableness of the
assumptions, methods and findings.
Tested how management determined the
recoverable amount and depletion charges for the
Canada, France and Malaysia segments, which
included the following:
o Evaluated the appropriateness of the methods
used by management in making these
o Tested the data used in determining these
o Evaluated the reasonableness of significant
assumptions used in developing the
underlying estimates:
Expected production volumes, future
development costs and future production
costs by considering the past
performance of each segment, and
whether these assumptions were
consistent with evidence obtained in
other areas of the audit.
Future oil and gas prices by comparing
those prices with other reputable third-
party industry forecasts.
The discount rate, by performing an
independent sensitivity analysis.
o Recalculated the unit of production rates used
to calculate depletion charges for the Canada,
France and Malaysia segments.
Other information
Management is responsible for the other information. The other information comprises the Management’s Discussion
and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other information is materially inconsistent with the
consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially
If, based on the work we have performed, we conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the consolidated
financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in
accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation
of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Corporations’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Corporation or to cease operations, or
has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Corporation’s financial reporting process.