IPC third quarter 2019 financial results and intention to launch share repurchase programme

November 5, 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 three and nine months ended September 30, 2019. In addition, IPC is pleased to announce that it has sought approval from the Toronto Stock Exchange (the “TSX”) to commence a normal course issuer bid to repurchase its own common shares through the facilities of the TSX and Nasdaq Stockholm.

Financial and Operational Highlights

• IPC intends to launch a new share repurchase program, the second since our April 2017 spin-off, with the intention to repurchase up to approximately seven percent or 11.5 million IPC shares, the maximum permitted over a twelve month period under Canadian and Swedish securities law. Implementation of the share repurchase program remains subject to Toronto Stock Exchange (TSX) approval.
• Average net production of 45,500 barrels of oil equivalent (boe) per day (boepd) for Q3 2019 in line with guidance.
• First ever horizontal well on the Vert La Gravelle field in France successfully completed in September 2019.
• Commenced the three well infill drilling program in Malaysia.
• Onion Lake Thermal F-Pad wells in Canada came on stream in September 2019.
• On track for 50,000 boepd 2019 exit rate with ongoing drilling activities in Canada, France and Malaysia.
• Operating costs per boe of USD 13.0 for Q3 2019, in line with guidance.
• Capital expenditure budget remains in line with guidance of USD 188 million.
• Strong operating cash flow generation of USD 70 million in Q3 2019 (USD 229 million for the first nine months of 2019) at the upper end of guidance.
• Operating cash flows were utilised to fund capital expenditures and to reduce financial liabilities, with net debt decreasing from USD 277 million as at December 31, 2018 to USD 208 million as at September 30, 2019.

Three months ended September 30 Nine months ended September 30
USD Thousands 2019 2018 2019 2018
Revenue 131,437 106,746 408,214 342,545
Gross profit 23,487 37,060 109,659 120,553
Net result 6,330 26,487 65,216 74,298
Operating cash flow 69,504 67,949 229,056 220,696
EBITDA 68,885 66,240 225,160 206,009
Net Debt 207,778 213,217 207,778 213,217


Mike Nicholson, IPC’s Chief Executive Officer, commented,
“We are pleased to announce another strong set of results for the first nine months of 2019.
During Q3 2019, our assets delivered average daily net production of 45,500 boepd, in line with our latest Q2 guidance. Full year average production guidance is unchanged, expected at the lower end of the 46,000 to 50,000 boepd guidance range. The 2019 exit production rate expectation remains at 50,000 boepd. Our operati