IPC 2021 Year-End Financial Results and 2022 Budget and Production Guidance

February 8, 2022

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, 2021. IPC is also pleased to announce its 2022 capital expenditure budget of USD 127 million and its 2022 production guidance of between 46,000 and 48,000 barrels of oil equivalent (boe) per day (boepd).⁽¹⁾ 2021 year-end proved plus probable (2P) reserves and best estimate contingent resources (unrisked) are respectively 270 million boe (MMboe) and 1,410 MMboe.⁽¹⁾⁽²⁾ IPC forecasts cumulative free cash flow (FCF) for 2022 to 2026 of approximately MUSD 900 to MUSD 1,800 (based on forecast Brent oil prices of USD 65 to 95 per barrel) generating estimated average annual FCF yield over the five year period of between 18% and 36%.⁽³⁾⁽⁷⁾ IPC has also approved a new capital allocation plan where, from and including 2022, IPC intends to distribute to shareholders up to 40% of the FCF generated by IPC above achieved average Brent oil prices of USD 55 per barrel.⁽³⁾⁽⁷⁾

 

2021 Business and Financial and 2022 Business Plan Highlights
•	Average net production of approximately 46,800 boepd for the fourth quarter of 2021 was above the high end of the third quarter of 2021 guidance range for the period (46% heavy crude oil, 18% light and medium crude oil and 36% natural gas)(1).
•	Full year 2021 average net production was 45,500 boepd above the high end of guidance and year end exit rate was above 46,000 boepd.
•	Production from the new sustaining Pad D’ at Onion Lake Thermal, Canada successfully brought online in the third quarter of 2021, with initial performance ahead of expectations and five production infill wells drilled at Onion Lake Thermal during the fourth quarter of 2021.
•	Increased working interest in the Bertam Field, Malaysia from 75% to 100% in April 2021.
•	Exceptional operational performance at the Bertam Field during 2021, with greater than 99% uptime and the successful increase of Bertam FPSO water handling capacity from 17,000 to 24,000 barrels of water per day in Q3 2021.
•	Drilling operations on the A15 sidetrack well at the Bertam Field commenced in December 2021.
•	Second annual Sustainability Report published in Q2 2021.
•	2P reserves as at December 31, 2021 of 270 MMboe, with a reserves life index (RLI) of 16 years(1,2).
•	Contingent resources (best estimate, unrisked) as at December 31, 2021 of 1,410 MMboe.(1,2)
•	Operating costs per boe of USD 15.1 for the fourth quarter of 2021 and USD 15.0 for the full year compared to full year guidance of USD 15.5 per boe.(3)
•	Record high operating cash flow (OCF) generation for the fourth quarter and full year 2021 amounted to MUSD 111 and MUSD 337 respectively(3).
•	Capital and decommissioning expenditures of MUSD 48 for the full year 2021, slightly below guidance of MUSD 50 following the re-phasing of drilling projects in Malaysia into the first quarter of 2022.
•	Record high FCF generation for the fourth quarter and full year 2021 amounted to MUSD 87 and MUSD 263 respectively(3).
•	Net debt of MUSD 94 as at December 31, 2021, down from MUSD 161 at the end of the third quarter of 2021 and down from MUSD 321 as at December 31, 2020(3).
•	Net debt to 12 month rolling EBITDA ratio as at December 31, 2021 was 0.3 times(3).
•	Net result of MUSD 67 for the fourth quarter of 2021 and MUSD 146 for the full year 2021.
•	IPC’s inaugural USD 300 million bond issued on February 1, 2022, with a portion of the bond proceeds used to fully repay and cancel IPC’s existing reserve-based lending credit facilities.