IPC Third Quarter 2023 Financial and Operational Results; Share Repurchase Program Update; and CEO Succession

October 31, 2023

International Petroleum Corporation (IPC or the Corporation) (TSX, Nasdaq Stockholm: IPCO) today released its financial and operational results and related management’s discussion and analysis (MD&A) for the three and nine months ended September 30, 2023.

Mike Nicholson, IPC’s Chief Executive Officer, comments: “We are very pleased to announce another strong quarter for IPC. We produced an average of 50,200 barrels of oil equivalent per day (boepd) during the third quarter. Given the strong average daily production over the first nine months of 2023, we expect to exceed an average of 50,000 boepd for the full year 2023, above the high end of our guidance range. We continue to progress the exciting development of Phase 1 of the Blackrod project in Canada, with cost levels and schedule in line with expectation.

We also expect to complete our current normal course issuer bid (NCIB) program in Q4 2023 and intend to seek Toronto Stock Exchange (TSX) approval to renew the NCIB for a further 12 months. Our current intention is to fully complete that renewed NCIB program during the course of 2024.

Finally, I will be stepping down from executive management of IPC at the end of 2023 with William Lundin, currently Chief Operating Officer of the Corporation, assuming the role of President and CEO. I plan to stay closely involved with the bright future of IPC as a continuing member of the Board of Directors.”

Q3 2023 Business Highlights

  • Strong quarterly average net production of approximately 50,200 barrels of oil equivalent (boe) per day (boepd) for the third quarter of 2023 (55% heavy crude oil, 14% light and medium crude oil and 31% natural gas).(1)
  • Blackrod Phase 1 development progressing on schedule and budget.
  • Disposal of non-core properties in Canada for MUSD 17 (0.6 MMboe of 2P reserves; approximately 400 bopd of average current production).(1,2)
  • Successfully completed planned maintenance turnaround at the Bertam Field in Malaysia on scope, schedule and budget.
  • 1.31 million common shares purchased and cancelled during Q3 2023 under IPC’s normal course issuer bid (NCIB); annual program 90% complete.
  • IPC plans to seek TSX approval for the renewal of the NCIB for a further twelve months from December 2023 to December 2024, with IPC’s current intention to fully complete the renewed program.
  • Successfully completed USD 150 million tap issue under IPC’s existing 7.25% senior unsecured bond framework.
  • IPC succession plan sees William Lundin assume the role of President and CEO from January 1, 2024 as Mike Nicholson retires from executive management; Mike to continue as a Director of IPC and William to join the Board as a new Director.

Q3 2023 Financial Highlights

  • Operating costs per boe of USD 17.9 for Q3 2023.(1,3)
  • Operating cash flow (OCF) generation for Q3 2023 amounted to MUSD 119.(1,3)
  • Capital and decommissioning expenditures of MUSD 80 for Q3 2023.(1)
  • Free cash flow (FCF) generation for Q3 2023 amounted to MUSD 35 (MUSD 103 pre Blackrod funding).(1,3)
  • Net cash of MUSD 83 as at September 30, 2023.(3)
  • Net result of MUSD 72 for Q3 2023.

Reserves and Resources

  • Total 2P reserves as at December 31, 2022 of 487 million boe (MMboe), with a reserves life index (RLI) of 27 years.(1,2)
  • Contingent resources (best estimate, unrisked) as at December 31, 2022 of 1,162 MMboe.(1,2)

2022 Annual Guidance

  • Full year 2023 average net production forecast unchanged at greater than 50,000 boepd.(1)
  • Full year 2023 operating costs guidance forecast remains unchanged at USD 17.5 to 18.0 per boe.(1,3)
  • Full year 2023 OCF guidance tightened to between MUSD 340 to 365 (assuming Brent USD 80 to 90 per barrel for the remainder of 2023) from previous guidance of MUSD 320 to 390 (assuming Brent USD 75 to 90 per barrel).(1,3)
  • Full year 2023 capital and decommissioning expenditures forecast reduced from MUSD 365 to MUSD 330.(1)
  • Full year 2023 FCF forecast range tightened to between MUSD -15 to 5 (assuming Brent USD 80 to 90 per barrel for the remainder of 2023) from previous guidance of MUSD -65 to 5 (assuming Brent USD 75 to 90 per barrel), after taking into account MUSD 240 of proposed 2023 Blackrod capital expenditures.(1,3,4)
Three months ended September 30   Nine months ended September 30
USD Thousands 2023 2022   2023 2022
Revenue 257,366 299,361 655,446