IPC Announces First Quarter 2026 Financial and Operational Results

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 months ended March 31, 2026.

William Lundin, IPC's President and Chief Executive Officer, comments: “We have seen substantial increases in international commodity prices through March 2026 and into the second quarter, mainly as a result of the conflicts in the Middle East. IPC has been very well-placed to benefit from the price increases as our operational performance and cost discipline remain strong. We remain on track to achieve full year 2026 production in line with the guidance announced at our Capital Markets Day in February. Cash flow generation exceeded our forecasts for the quarter, and we are pleased to revise upwards these forecasts for the full year 2026. IPC originally set out a lean work program and budget for 2026 considering the soft pricing environment entering the year. In response to the improved commodity pricing outlook, IPC has increased our capital expenditure program to accommodate incremental short-cycle investment opportunities at our producing assets. We are also very pleased to report that the transformational Blackrod Phase 1 development project in Canada nears completion with first steam injection having been achieved in December 2025 and first oil continuing to be forecast for Q3 2026, a quarter earlier than originally guided.”

Q1 2026 Business Highlights

• Average net production of approximately 43,000 boepd for the first quarter of 2026, at the high end of the guidance range for the period (52% heavy crude oil, 15% light and medium crude oil and 33% natural gas).⁽¹⁾
• Blackrod Phase 1 development activity nears completion as final construction activities and commissioning of the Central Processing Facility (CPF) advance, with first oil forecast for Q3 2026.
• Following the increase in commodity prices in Q1 2026, decision taken to increase 2026 planned capital activities, with an additional MUSD 41 of forecast capital expenditures over the remainder of 2026.

Q1 2026 Financial Highlights

• Operating costs per boe of USD 17.6 for Q1 2026, ahead of guidance.⁽³⁾
• Operating cash flow (OCF) generation of MUSD 68 for Q1 2026, ahead of guidance.⁽³⁾
• Capital and decommissioning expenditures of MUSD 71 for Q1 2026, in line with guidance.
• Free cash flow (FCF) generation for Q1 2026 amounted to MUSD -17.⁽³⁾
• Net result of MUSD 13 for Q1 2026.
• Amended and extended the credit facility in Canada in Q2 2026 to increase the committed facility size to CAD 348.5 million (approximately USD 250 million), with maturity extended to May 2028.

Reserves and Resources

• Total 2P reserves as at December 31, 2025 of 521 MMboe, with a reserve life index (RLI) of 31 years.⁽¹⁾⁽²⁾
• Contingent resources (best estimate, unrisked) as at December 31, 2025 of 1,224 MMboe.⁽¹⁾⁽²⁾

2026 Annual Guidance

• Full year 2026 average net production guidance range maintained at 44,000 to 47,000 boepd.⁽¹⁾
• Full year 2026 operating costs guidance range maintained at USD 18 to 20 per boe.⁽³⁾
• Full year 2026 OCF revised guidance estimated at between MUSD 220 and 340 (assuming Brent USD 70 to 90 per barrel for the remainder of 2026) from previous guidance of between MUSD 100 and 250 (assuming Brent USD 55 to 75 per barrel).⁽³⁾⁽⁴⁾
• Full year 2026 capital and decommissioning expenditures guidance forecast increased to MUSD 163, as a result of additional planned capital activities.
• Full year 2026 FCF revised guidance estimated at between MUSD 0 and 120 (assuming Brent USD 70 to 90 per barrel for the remainder of 2026) from previous guidance of between negative MUSD 70 and positive MUSD 85 (assuming Brent USD 55 to 75 per barrel).⁽³⁾⁽⁴⁾

During the first quarter of 2026, commodity prices increased materially compared to the prior quarter, with Brent oil prices averaging over USD 80 per barrel. During the quarter and into the second quarter, commodity prices continued to be high and volatile mainly in response to uncertainties with respect to the conflict in the Middle East and the corresponding effects on supply of oil and gas from the region. As a result of the constrained flows through the Strait of Hormuz from the end of February, one of the largest supply disruptions on record has taken place with an estimated net 10 million barrels per day shortfall. This has prompted coordinated Strategic Petroleum Reserves releases, increased OPEC spare capacity unwinds, and relief on previously sanctioned Russian and Iranian barrels to combat high crude and crude product prices. Prompt spreads between physical spot and Brent futures month contracts have seen all time high price separation signalling extreme physical market tightness due to the supply disruption. The profound effect of this crisis is likely to be much longer lasting as consumers and producers alike reshape their thinking around access to resources and security of supply. Prior to the commencement of hostilities in Iran, IPC hedged 2,000 barrels per day of Dated Brent from April to June 2026 at around USD 68 per barrel and 9,000 barrels per day of West Texas Intermediate (WTI) from April to June 2026 at around USD 62 per barrel. IPC remains fully exposed to benchmark oil prices from the beginning of July 2026 onwards.

The first quarter 2026 WTI to Western Canadian Select (WCS) price differential averaged USD 14 per barrel, in line with the 2026 forecast. The WTI to WCS differential continues to benefit from the TMX pipeline expansion, driving up competitive tension for Canadian oil and increased buying from Asia. The outlook of the WTI to WCS differential remains tight with excess egress capacity relative to the supply in the Western Canadian Sedimentary Basin (WCSB), balanced against the potential of Venezuelan heavy oil barrels to the US Gulf Coast PADD III refineries. There are currently no tariffs on Canadian crude oil exports to the United States, which remain covered by the US Mexico Canada trade agreement. For 2026, IPC has implemented WTI to WCS differential hedges for 5,000 barrels per day at USD -12.50 per barrel. In addition, IPC has hedged from July to year end 2027, 5,000 barrels per day of the differential between the WCS price in Hardisty, Canada and the WCS price in Houston, USA, effectively hedging the transportation cost between the locations, at USD -7.55 per barrel. In addition, 2,000 barrels per day of quality differential between the WCS in Houston and the WTI were hedged from July to December 2026 at USD -3.65 per barrel.

The average Canadian gas benchmark price, AECO, was CAD 1.98 per Mcf for the first quarter of 2026, with WCSB gas inventory levels remaining elevated above the historical average. There is an expectation that the ramp up of the LNG Canada project in 2026 should drive higher natural gas prices in Canada. IPC has implemented hedges for 15,000 GJ (approximately 14,500 Mcf) per day at CAD 2.73 per GJ (approximately CAD 2.84 per Mcf) for 2026 from April to October 2026.

First Quarter 2026 Highlights and Full Year 2026 Guidance

During the first quarter of 2026, our portfolio delivered average net production of 43,000 boepd, at the high end of the guidance range for the quarter. Operational performance from our producing assets was strong to start the year as high facility and well uptimes were achieved. We maintain the full year 2026 average net production guidance range of 44,000 to 47,000 boepd.⁽¹⁾

Our operating costs per boe for the first quarter of 2026 was USD 17.6, ahead of guidance. Full year 2026 operating expenditure guidance of USD 18.0 to 20.0 per boe remains unchanged.⁽³⁾

Operating cash flow (OCF) generation for the first quarter of 2026 was USD 68 million. Full year 2026 OCF guidance is increased to USD 220 to 340 million (assuming Brent USD 70 to 90 per barrel for the remainder of 2026).⁽³⁾⁽⁴⁾

Capital and decommissioning expenditure for the first quarter of 2026 was USD 71 million in line with guidance. Full year 2026 capital and decommissioning expenditure is increased to USD 163 million following the decision to accelerate capital activities following the 2026 commodity price increases.

Free cash flow (FCF) generation was USD -17 million during the first quarter of 2026, ahead of guidance. Full year 2026 FCF guidance is increased to USD 0 to 120 million (assuming Brent USD 70 to 90 per barrel for the remainder of 2026).⁽³⁾⁽⁴⁾

As at March 31, 2026, IPC’s net debt position was USD 513 million, from a net debt position of USD 484 million as at December 31, 2025, mainly driven by the funding of Blackrod project capital expenditures.

In April 2026, IPC increased the facility size of its Canadian credit facility to CAD 348.5 million (approximately USD 250 million) and extended the maturity of the facility to May 2028. IPC previously announced the 2025 refinancing of its USD 450 million of unsecured bonds, with maturity in October 2030. This enhanced liquidity position for the company, combined with the better than forecast cash flow generation to date and forecast for 2026, supports IPC in following through on its key strategic objectives to maximize stakeholder value.

IPC maintains the ability to repurchase up to approximately 6.5 million common shares up to early December 2026 under the renewed normal course issuer bid (NCIB) announced in Q4 2025. IPC has not purchased any common shares under the 2025/2026 NCIB to date. As at March 31, 2026 and May 5, 2026, IPC had a total of 112,826,752 common shares issued and outstanding and IPC held no common shares in treasury.

Blackrod

The Blackrod asset is 100% owned by IPC and hosts the largest booked reserves and contingent resources within the IPC portfolio. After more than a decade of pilot operations, subsurface delineation and commercial engineering studies, IPC sanctioned the Phase 1 SAGD development in the first quarter of 2023. The Phase 1 development targets 311 MMboe of 2P reserves, with first oil planned in Q3 2026 and a plateau production of 30,000 bopd by the end of 2027.⁽¹⁾⁽²⁾

As previously announced, IPC achieved first steam at the Blackrod Phase 1 project in December 2025, a quarter earlier than originally guided at the time of project sanction. By the end of the first quarter of 2026, approximately USD 842 million of cumulative growth capital has been spent on the Blackrod Phase 1 development since sanction. Construction is nearing completion at the Central Processing Facility (CPF) and well pad facilities, commissioning activities are progressing in line with schedule, and drilling plus completions have been completed in line with plan. Site health and safety control has been excellent with no lost time incidents since commercial development activities commenced.

IPC remains well-positioned to responsibly deliver the Phase 1 project in line with the multi-year budget of USD 850 million to first oil. The total growth capital expenditure comprises the total installed costs for the facilities and associated 40 well pairs needed to fill the plant capacity of 30,000 bopd and has remained unchanged since the time of sanction in 2023.⁽¹⁾

Blackrod is a multi-generational asset that is being unlocked through the first phase of commercial development. More than 1.45 billion barrels of recoverable resource lies within the contiguous reservoir wholly owned by IPC. The company remains laser focused on achieving the production start and ramp up targets as previously disclosed on the Phase 1 project and in parallel is maturing future phase expansion concepts. Blackrod has regulatory approval for up to 80,000 bopd.⁽¹⁾⁽²⁾

Environmental, Social and Governance (ESG) Performance

As part of IPC’s commitment to operational excellence and responsible development, IPC’s objective is to reduce risk and eliminate hazards to prevent occurrence of accidents, ill health, and environmental damage, as these are essential to the success of our business operations. During the first quarter of 2026, IPC recorded no material safety or environmental incidents.

Notes:

1. See “Supplemental Information regarding Product Types” in “Reserves and Resources Advisory” below. See also the annual information form for the year ended December 31, 2025 (AIF) available on IPC’s website at www.international-petroleum.com and under IPC’s profile on SEDAR+ at www.sedarplus.ca.
2. See “Reserves and Resources Advisory“ below. Further information with respect to IPC’s reserves, contingent resources and estimates of future net revenue, including assumptions relating to the calculation of net present value (NPV), are described in the AIF.
3. Non-IFRS measures, see “Non-IFRS Measures” below and in the MD&A.
4. OCF and FCF forecasts at Brent USD 70 to 90 per barrel assume Brent to WTI differential of USD 5 per barrel and WTI to WCS differential of USD 14 per barrel for the remainder of 2026. OCF and FCF forecasts assume gas price on average of approximately CAD 2.17 per Mcf for the remainder of 2026.