IPC Announces Second Quarter 2026 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, 2026. IPC also released its annual Sustainability Report detailing IPC’s sustainability approach and initiatives.

William Lundin, IPC's President and Chief Executive Officer, comments: “We were very pleased to announce in the second quarter that first oil was achieved in May 2026 at the transformational Blackrod Phase 1 development in Canada, ahead of schedule and on budget. The Phase 1 project production continues to progressively ramp up with the forecast plateau production rate of 30,000 barrels of oil per day (bopd) expected to be achieved by late 2027, a quarter earlier than originally guided at the time of project sanction. Throughout the rest of the business, IPC maintained strong operational and financial performance, as the second quarter saw substantial increases in average international commodity prices. In response to these improved commodity prices, IPC increased our capital expenditure program to add incremental short-cycle investment opportunities at our producing assets.”

Q2 2026 Business Highlights

• Average net production of approximately 42,200 barrels of oil equivalent per day (boepd) for the second quarter of 2026, in line with guidance for the period (53% heavy crude oil, 13% light and medium crude oil and 34% natural gas).⁽¹⁾
• Blackrod Phase 1 first oil achieved in May 2026, ahead of schedule and on budget.
• Following the increase in commodity prices, oil drilling in France commenced in the second quarter, with the first well online and delivering initial results ahead of expectations.

Q2 2026 Financial Highlights

• Operating costs per boe of USD 19.1 for Q2 2026, in line with guidance.⁽³⁾
• Operating cash flow (OCF) generation of MUSD 67 for Q2 2026.⁽³⁾
• Capital and decommissioning expenditures of MUSD 49 for Q2 2026, in line with guidance.
• Free cash flow (FCF) generation for Q2 2026 amounted to MUSD 4.⁽³⁾
• Net result of MUSD 10 for Q2 2026.
• Increased the Canadian revolving credit facility to MCAD 348.5 (approximately MUSD 250), and extended the maturity 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 230 and 330 (assuming Brent USD 70 to 90 per barrel for the remainder of 2026) from previous guidance of between MUSD 220 and 340 (assuming Brent USD 70 to 90 per barrel).⁽³⁾⁽⁴⁾
• Full year 2026 capital and decommissioning expenditures guidance forecast maintained at MUSD 163.
• Full year 2026 FCF revised guidance estimated at between MUSD 10 and 110 (assuming Brent USD 70 to 90 per barrel for the remainder of 2026) from previous guidance of between MUSD 0 and 120 (assuming Brent USD 70 to 90 per barrel).⁽³⁾⁽⁴⁾

Oil prices continued to strengthen through the second quarter of 2026 due to the on-going geopolitical tensions and constrained product flows through the Strait of Hormuz. Market volatility remains high in anticipation of a lasting ceasefire and resolution of the conflict in Iran ahead of the US mid-term elections. The International Energy Agency member countries’ strategic reserves release (SPR) is progressing as planned to combat the unprecedented supply disruption, with nearly 75% of the targeted 400 million barrel release complete. In addition to the global storage release, China has reduced petroleum imports by one-third, or by approximately 4 million barrels per day, with reduced refinery runs. Market commentators question how long these reduced runs can be sustained. In combination with depleting spare capacity, the physical backdrop for the crude market remains tight and supported by the enhanced importance of energy security. As at the end of the second quarter, IPC’s West Texas Intermediate (WTI) and Brent hedges have rolled off, and IPC is now fully exposed to these benchmark oil prices for the second half of 2026 and onward.

The second quarter 2026 WTI to Western Canadian Select (WCS) price differential averaged approximately USD 15 per barrel. The differential remains sensitive to refinery demand for heavy crude on the US Gulf Coast and the availability of competing heavy crude supplies, which also is partially impacted in the short term by US SPR releases. IPC is well-positioned to mitigate the partial differential increase with 2026 full year WTI to WCS differential hedges for 5,000 barrels per day at USD -12.50 per barrel. In addition, IPC has hedged from July 2026 to December 2027, 5,000 barrels per day and from January 2027 to December 2027, a further 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 and USD -7.50 per barrel, respectively. In addition, 2,000 barrels per day of quality differential between the WCS in Houston and the WTI are hedged from July to December 2026 at USD -3.65 per barrel.

The average Canadian gas benchmark price, AECO, was CAD 1.61 per Mcf for the second quarter of 2026, with Western Canadian Sedimentary Basin (WCSB) natural gas inventory levels remaining above historical averages. Market sentiment improved during the quarter as LNG Canada ramped up and Alberta data centre plans were announced which should increase regional demand and provide support for Canadian gas prices in the future. 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.

Second Quarter 2026 Highlights and Full Year 2026 Guidance

During the second quarter of 2026, IPC’s portfolio delivered average net production of 42,200 boepd, in line with the guidance for the quarter. Operational performance from the producing assets was strong as high facility and well uptimes were achieved. IPC maintains the full year 2026 average net production guidance range of 44,000 to 47,000 boepd.⁽¹⁾

IPC’s operating costs per boe for the second quarter of 2026 were USD 19.1, in line with 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 second quarter of 2026 was USD 67 million. Full year 2026 OCF guidance is tightened to USD 230 to 330 million (assuming Brent USD 70 to 90 per barrel for the remainder of 2026).⁽³⁾⁽⁴⁾

Capital and decommissioning expenditure for the second quarter of 2026 was USD 49 million in line with guidance. Full year 2026 capital and decommissioning expenditure is maintained at USD 163 million.

Free cash flow (FCF) generation was USD 4 million during the second quarter of 2026. Full year 2026 FCF guidance is tightened to USD 10 to 110 million (assuming Brent USD 70 to 90 per barrel for the remainder of 2026).⁽³⁾⁽⁴⁾

As at June 30, 2026, IPC’s net debt position was USD 509 million, from a net debt position of USD 513 million as at March 31, 2026.

As previously announced, 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 also previously announced the 2025 refinancing of its USD 450 million of unsecured bonds, with maturity in October 2030. This strong liquidity position, 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 June 30, 2026 and August 4, 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 steam-assisted gravity drainage (SAGD) development in the first quarter of 2023. The Phase 1 development targets 311 MMboe of 2P reserves. As previously announced, first oil at the Blackrod Phase 1 project was achieved at the end of May 2026, ahead of schedule and on budget. The production ramp up continues in Q3 2026 and is expected to build inventories at the central processing facility (CPF) and at the batching station where oil will subsequently be shipped on the Grand Rapids Pipeline to be sold at Edmonton. More significant production and sales volumes from Blackrod Phase 1 are expected in Q4 2026, in line with IPC’s annual production guidance. The forecast plateau production of 30,000 bopd is still expected to be achieved by the end of 2027.⁽¹⁾⁽²⁾

By the end of the second quarter of 2026, the final cumulative growth capital of approximately USD 855 million has been spent on the Blackrod Phase 1 development since sanction. Construction at the CPF and well pad facilities were completed, commissioning activities are substantially complete 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.

The total growth capital expenditure of USD 855 million 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. Future facilities expansion and phase development concepts continue to be matured by IPC. Blackrod has regulatory approval for up to 80,000 bopd.⁽¹⁾⁽²⁾

Environmental, Social and Governance (ESG) Performance

Alongside the publication of the second quarter 2026 financial report, IPC releases its 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 2026, IPC recorded no material safety or environmental incidents. IPC sadly reports that a tragic incident occurred at end July 2026 at one of IPC’s operational sites in France where a contractor lost his life. The causes of the accident remain under investigation. IPC’s sincere condolences are to the deceased individual’s family and to all those affected by this accident. IPC confirms its ongoing commitment to the health and safety of all personnel.

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 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 1.88 per Mcf for the remainder of 2026.