IPC Announces Second Quarter 2025 Financial and Operational Results and Releases Sustainability Report

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 six months ended June 30, 2025. IPC also released its sixth annual Sustainability Report detailing IPC’s sustainability approach and initiatives.

William Lundin, IPC's President and Chief Executive Officer, comments: “IPC continued to achieve strong operational and financial performance during Q2 2025 across all of our operations in Canada, Malaysia and France. Our operating and financial results during the quarter were in line with the 2025 guidance announced at our Capital Markets Day in February as we continue to execute according to our budget and planned work program. The Blackrod Phase 1 development project in Canada continues to progress as planned. We have completed around 85% of the current normal course issuer bid to the end of July 2025, having repurchased and cancelled over 5.3% of our outstanding shares since December 2024. IPC now has fewer outstanding shares than at inception in April 2017 and we have not only grown our production and asset base substantially since that time, but we also look forward to the upcoming completion of the transformational Blackrod Phase 1 project.”

Q2 2025 Business Highlights

• Average net production of approximately 43,600 boepd for the second quarter of 2025, within the guidance range for the period (52% heavy crude oil, 14% light and medium crude oil and 34% natural gas).⁽¹⁾
• Continued progressing Phase 1 development activity as well as future phase resource maturation works at the Blackrod asset in Canada.
• At Onion Lake Thermal, Canada, two of four planned production infill wells and the eighth Pad L sustaining well pair were brought online.
• Successfully completed the drilling and workover program at the Bertam Field, Malaysia during July 2025.
• 1.8 million IPC common shares repurchased and cancelled during Q2 2025 under the normal course issuer bid (NCIB) and continuing with target to complete the full 2024/2025 NCIB this year.

Q2 2025 Financial Highlights

• Operating costs per boe of USD 17.8 for Q2 2025, marginally below guidance.⁽³⁾
• Operating cash flow (OCF) generation of MUSD 55 for Q2 2025, in line with guidance.⁽³⁾
• Capital and decommissioning expenditures of MUSD 100 for Q2 2025, in line with guidance.
• Free cash flow (FCF) generation for Q2 2025 amounted to MUSD -58 (MUSD 6 pre-Blackrod capital expenditures).⁽³⁾
• Gross cash of MUSD 79 and net debt of MUSD 375 as at June 30, 2025.⁽³⁾
• Net result of MUSD 14 for Q2 2025.

Reserves and Resources

• Total 2P reserves as at December 31, 2024 of 493 MMboe, with a reserve life index (RLI) of 31 years.⁽¹⁾⁽²⁾
• Contingent resources (best estimate, unrisked) as at December 31, 2024 of 1,107 MMboe.⁽¹⁾⁽²⁾
• 2P reserves net asset value (NAV) as at December 31, 2024 of MUSD 3,083 (10% discount rate).⁽¹⁾⁽²⁾

2025 Annual Guidance

• Full year 2025 average net production guidance range forecast maintained at 43,000 to 45,000 boepd.⁽¹⁾
• Full year 2025 operating costs guidance range forecast maintained at USD 18 to 19 per boe.⁽³⁾
• Full year 2025 OCF revised guidance estimated at between MUSD 245 and 260 (assuming Brent USD 60 to 75 per barrel for the remainder of 2025) from previous guidance of between MUSD 240 and 270.⁽³⁾⁽⁴⁾
• Full year 2025 capital and decommissioning expenditures guidance forecast maintained at MUSD 320 (including MUSD 230 for the Blackrod asset).
• Full year 2025 FCF revised guidance estimated at between MUSD -135 and -120 (assuming Brent USD 60 to 75 per barrel for the remainder of 2025) from previous guidance of between MUSD -135 and -110.⁽³⁾⁽⁴⁾

During the second quarter of 2025, oil prices were volatile with Brent prices ranging from lows of USD 60 per barrel to highs of over USD 77 per barrel. The average Brent price for the quarter was approximately USD 68 per barrel, as compared to just below USD 76 per barrel for the first quarter of 2025. This second quarter volatility was driven by announcements early in the quarter by OPEC and the OPEC+ group to increase supply in excess of expectations, at the same time as the United States proposing high tariffs to countries deemed in a trade surplus of US goods. The US then delayed implementation of these tariffs which, combined with the increased conflicts in the Middle East, influenced higher world oil prices in early June. From the end of the quarter and into July 2025, Brent prices have remained more stable in a range just below USD 70 per barrel. Beyond the short-term shocks during the second quarter, global oil inventories remain below the 5-year average, high geopolitical tensions continue, and non-OPEC oil production (in particular in the US) is unlikely to grow at current prices. These factors should be positive for future oil prices. During this large expenditure year for the Blackrod Phase 1 project, IPC continued to hedge oil prices in the second quarter of 2025 through zero cost collars. IPC’s oil hedges in total represent around 50% of our aggregate forecast 2025 oil production at around USD 76 and USD 71 per barrel for Dated Brent and West Texas Intermediate (WTI), respectively, as well as a WTI collar between USD 65 and USD 75 per barrel, for the remainder of 2025.

In Canada, WTI to Western Canadian Select (WCS) crude price differentials during the second quarter of 2025 averaged USD 10.2 per barrel. The WTI to WCS differential has benefited from the TMX pipeline expansion and tightened as the pipeline provides an alternative transportation route away from the US Gulf Coast. There are currently no tariffs on Canadian crude oil exports to the United States, which are covered by the US Mexico Canada free trade agreement. IPC has hedged the WTI to WCS differential for approximately 50% of our forecast 2025 Canadian oil production at USD 14 per barrel for 2025.

Natural gas markets in Canada for the second quarter of 2025 remained weak. The average AECO gas price was CAD 1.7 per Mcf for the second quarter of 2025and IPC achieved an average realized price of CAD 1.8 per Mcf during the quarter. There is a potential for improved pricing for Canadian gas benchmark prices following the start-up of the LNG Canada project in British Columbia, which may relieve elevated Canadian gas inventories. Approximately 50% of our net long exposure is hedged at CAD 2.4 per Mcf to end October 2025, dropping to around 15% for November and December at CAD 2.6 per mcf.

Second Quarter 2025 Highlights and Full Year 2025 Guidance

During the second quarter of 2025, our portfolio delivered average net production of 43,600 boepd, in line with guidance. At Onion Lake Thermal, two infill wells and a Pad L sustaining well pair were brought online in the quarter. In Malaysia, the extended reach drilling and workover program was successfully completed with the new infill well A21 and worked over well A15 brought on stream at the end of July. Early indications are in line with expectations as the production wells go through an initial clean up and stabilisation period. We maintain the full year 2025 average net production guidance range of 43,000 to 45,000 boepd.⁽¹⁾

Our operating costs per boe for the second quarter of 2025 was USD 17.8, marginally below guidance. Full year 2025 operating expenditure guidance of USD 18.0 to 19.0 per boe remains unchanged.⁽³⁾

Operating cash flow (OCF) generation for the second quarter of 2025 was MUSD 55. Full year 2025 OCF guidance is tightened to MUSD 245 to 260 (assuming Brent USD 60 to 75 per barrel for the remainder of 2025).⁽³⁾⁽⁴⁾

Capital and decommissioning expenditure for the second quarter of 2025 was MUSD 100 in line with guidance. Full year 2025 capital and decommissioning expenditure of MUSD 320 is maintained.

Free cash flow (FCF) generation was MUSD -58 (MUSD 6 pre-Blackrod capital expenditures) during the second quarter of 2025. Full year 2025 FCF guidance is tightened to MUSD -135 to -120 (assuming Brent USD 60 to 75 per barrel for the remainder of 2025) after taking into account MUSD 320 of forecast full year 2025 capital expenditures (including MUSD 230 relating to the Blackrod asset).⁽³⁾⁽⁴⁾

As at June 30, 2025, IPC’s net debt position increased to MUSD 375, from a net debt position of MUSD 314 as at March 31, 2025, mainly driven by the funding of capital expenditures and the continuing share repurchase program (NCIB). Gross cash as at June 30, 2025 amounts to MUSD 79 and IPC has access to a Canadian revolving credit facility of greater than MUSD 180 (fully committed, available and undrawn as at June 30, 2025), following the increase of that facility from MCAD 180 to MCAD 250 during the second quarter. The access to liquidity supports IPC to follow through on its key strategic objectives of enhancing stakeholder value through organic growth, stakeholder returns, and pursuing value adding M&A.⁽³⁾

Blackrod

The Blackrod asset is 100% owned by IPC and contains 259 MMboe of 2P reserves and 1,025 MMboe of contingent resources (best estimate, unrisked) with regulatory approval to produce up to 80,000 bopd. In early 2023, IPC sanctioned the Phase 1 development targeting plateau production rates of 30,000 bopd with a growth capital expenditure guidance of MUSD 850 and first oil expected in late 2026, marking the first major commercial Steam Assisted Gravity Drainage (SAGD) development undertaken in Alberta since the mid to late 2010s. The multi-year Phase 1 development guidance is maintained, with significant progress achieved to date. Since the Phase 1 project sanction to the end of Q2 2025, capital expenditures of MUSD 729 have been spent, or approximately 86% of the MUSD 850 growth capital guidance to first oil.⁽¹⁾

All major work activities continued to advance in accordance with plan at the Blackrod asset during the second quarter. The final Central Processing Facility (CPF) module was delivered to site during the quarter, marking a significant milestone achievement for the project. Mechanical, electrical and instrumentation installations remain the key areas of focus for the CPF and well pad facilities prior to start-up. IPC remains strongly positioned to deliver the transformational Phase 1 development as planned. In parallel, with the responsible Phase 1 development activity, IPC is progressing future resource maturation works at Blackrod.

IPC intends to fund the remaining Blackrod capital expenditure with forecast cash flow generated by its operations, cash on hand and drawing under the existing Canadian credit facility if needed.⁽³⁾

Stakeholder Returns: Normal Course Issuer Bid

In Q4 2024, IPC announced the renewal of the NCIB, with the ability to repurchase up to approximately 7.5 million common shares over the period of December 5, 2024 to December 4, 2025. Under the 2024/2025 NCIB, IPC repurchased and cancelled approximately 0.8 million common shares in December 2024, 5.5 million common shares during the first half of 2025, and a further 0.2 million common shares purchased under other exemptions in Canada. The average price of common shares repurchased under the 2024/2025 NCIB during the first half of 2025 was around SEK 140 / CAD 19 per share.

As at June 30, 2025, IPC had a total of 113,354,532 common shares issued and outstanding and IPC held no common shares in treasury. As at July 31, 2025, IPC had a total of 113,278,532 common shares issued and outstanding and IPC held no common shares in treasury.

Notwithstanding the final major capital investment year at Blackrod in 2025, IPC has purchased and cancelled approximately 85% of the maximum 7.5 million common shares allowed under the 2024/2025 NCIB by the end of July 2025 and intends to purchase and cancel the remaining 1.1 million common shares under that program in 2025. This would result in the cancellation of 6.2% of common shares outstanding as at the beginning of December 2024. IPC continues to believe that reducing the number of shares outstanding in combination with investing in long-life production growth at the Blackrod project will prove to be a winning formula for our stakeholders.

Environmental, Social and Governance (ESG) Performance

Alongside the publication of our second quarter 2025 financial report, IPC releases its sixth annual Sustainability Report. The Sustainability Report provides details on IPC’s approach to sustainability and material sustainability topics highlighting specific initiatives and progress. The Sustainability Report is available on IPC’s website at www.international-petroleum.com.

During the second quarter of 2025, IPC recorded no material safety or environmental incidents.

As previously announced, IPC targets a reduction of our net GHG emissions intensity by the end of 2025 to 50% of IPC’s 2019 baseline and IPC remains on track to achieve this reduction. IPC has also made a commitment to maintain 2025 levels of 20 kg CO₂/boe through to the end of 2028.⁽⁵⁾

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, 2024 (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. NAV is calculated as NPV less net debt of MUSD 209 as at December 31, 2024.
3. Non-IFRS measures, see “Non-IFRS Measures” below and in the MD&A.
4. OCF and FCF forecasts at Brent USD 60 and 75 per barrel assume Brent to WTI differential of USD 3 and 5 per barrel, respectively, and WTI to WCS differential of USD 10 and 15 per barrel, respectively, for the remainder of 2025. OCF and FCF forecasts assume gas price on average of CAD 1.25 per Mcf for the third quarter of 2025 and CAD 2.50 per Mcf for the fourth quarter of 2025.
5. Emissions intensity is the ratio between oil and gas production and the associated carbon emissions, and net emissions intensity reflects gross emissions less operational emission reductions and carbon offsets.