International Petroleum Corporation Announces 2024 Year-End Financial and Operational Results and 2025 Budget, Reserves and Guidance

11 Feb 2025 08:44 CET

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 months and year ended
December 31, 2024. IPC is also pleased to announce its 2025 budget, including
that IPC continues to progress the development of the Blackrod Phase 1 project
in Canada in line with schedule and budget. IPC previously announced the renewal
of the normal course issuer bid (NCIB) under which IPC may acquire a further
5.3 million common shares up to December 2025, in addition to the 2.2 million
common shares already purchased for cancellation under the NCIB in December
2024 and January 2025. IPC's 2025 capital and decommissioning expenditure budget
is USD 320 million and its 2025 average daily production guidance is between
43,000 and 45,000 barrels of oil equivalent (boe) per day (boepd). 2024 year-end
proved plus probable (2P) reserves are 493 million boe (MMboe) and best estimate
contingent resources (unrisked) are 1,107 MMboe.(()(1)(2))

William Lundin, IPC's President and Chief Executive Officer, comments: "We are
very pleased to announce that IPC achieved strong operational results in 2024.
Our average net production was 47,400 boepd for the full year, with very strong
operational and ESG performance across all our areas of operation. 2024 was a
very significant investment year for our Blackrod Phase 1 development project,
and we have spent over two-thirds of the forecast capital expenditure by the end
of 2024. We generated strong cash flows from our business, and we returned USD
102 million to shareholders through share buybacks in 2024. With gross cash
resources of USD 247 million at 2024 year-end, we continue to be well positioned
to deliver on our three strategic pillars of Organic Growth, Stakeholder
Returns, and M&A that drive value creation for our stakeholders.(()(1)()(3))

On Organic Growth, we are very pleased with the progress of the development of
Phase 1 of the Blackrod project, Canada, which remains in line with schedule and
budget. Phase 1 of the Blackrod project continues to forecast first oil in late
2026, with peak production planned to increase to 30,000 bopd by 2028. In 2024,
IPC achieved over 250% reserves replacement ratio, ending the year with 493
MMboe of 2P reserves, the highest in our history.((1))((2))

On Stakeholder Returns, we completed the 2023/2024 NCIB program, purchasing and
cancelling 8.3 million IPC common shares over the period of December 5, 2023 to
December 4, 2024, representing approximately 6.5% of the common shares
outstanding at the start of that program. We immediately recommenced purchasing
under the renewed 2024/2025 NCIB, purchasing for cancellation 0.8 million common
shares during December 2024 and over 1.4 million common shares during January
2024. We are permitted to purchase up to a further 5.3 million common shares by
early December 2025, which will represent a 6.2% reduction in the number of
shares common outstanding at the beginning of the 2024/2025 NCIB.

On M&A, we continue to review potential opportunities in Canada and
internationally. IPC's principal focus continues to be on progressing the
Blackrod Phase 1 development as well as developing our existing asset base in
Canada, France and Malaysia.

IPC is well-positioned for 2025 and beyond as our Blackrod Phase 1 project is
progressing according to plan, our existing production operations continue to
generate strong cash flows, and our balance sheet is strong. At the same time,
we continue return value to our shareholders by repurchasing and cancelling our
common shares under the NCIB. I look forward to another exciting year at IPC
with our high quality assets and our highly skilled and motivated teams across
all areas of operation."

2024 Business Highlights

* Average net production of approximately 47,400 boepd for the fourth quarter
of 2024 was in line with the guidance range for the period (51% heavy crude
oil, 15% light and medium crude oil and 34% natural gas).((1))
* Full year 2024 average net production was 47,400 boepd, above the mid-point
of the 2024 annual guidance of 46,000 to 48,000 boepd.((1))
* Development activities on Phase 1 of the Blackrod project progressed in
2024 on schedule and on budget, with forecast first oil in late 2026. All
major third-party contracts have been executed and construction is advancing
according to plan, including construction of the central processing facility
(CPF) and well pad facilities, finalization of the midstream agreements for
the input fuel gas, diluent and oil blend pipelines, and advancement of
drilling operations. As at the end of 2024, over two-thirds of the forecast
Blackrod Phase 1 development capital expenditure of USD 850 million has been
spent since project sanction in early 2023.
* Drilling activity at the Southern Alberta assets in Canada continued with a
total of thirteen wells drilled during 2024.
* Successful completion of planned maintenance shutdowns at Onion Lake Thermal
(OLT) in Canada and the Bertam field in Malaysia during 2024.
* 8.3 million common shares purchased and cancelled from December 2023 to
early December 2024 under IPC's 2023/2024 NCIB and a further 2.2 million
common shares purchased for cancellation during December 2024 and January
2025 under the renewed 2024/2025 NCIB.
* In Q3 2024, published IPC's fifth annual Sustainability Report.

2024 Financial Highlights

* Operating costs per boe of USD 18.2 for the fourth quarter of 2024 and USD
17.0 for the full year, in line with the most recent 2024 guidance of less
than USD 18.0 per boe for the full year.((3))
* Strong operating cash flow (OCF) generation for the fourth quarter and full
year 2024 amounted to MUSD 78 and MUSD 342, respectively.((3))
* Capital and decommissioning expenditures of MUSD 129 for the fourth quarter
and MUSD 442 for the full year 2024, in line with the full year guidance of
MUSD 437.
* Free cash flow (FCF) generation for the full year 2024 of negative MUSD
135, with negative FCF generation of MUSD 61 for the fourth quarter in line
with expectations and taking into account the significant capital
expenditures during the quarter in respect of the Blackrod project. FCF for
the full year 2024, before 2024 Blackrod Phase 1 development expenditure of
MUSD 351, was MUSD 216.((3))
* Net debt of MUSD 209 and gross cash of MUSD 247 as at December
31, 2024.((3))
* Net result of MUSD 0.4 for the fourth quarter of 2024 and MUSD 102 for the
full year 2024.
* Entered into a letter of credit facility in Canada during 2024 to cover
operational letters of credit, giving full availability under IPC's undrawn
CAD 180 million Revolving Credit Facility.

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)()(5)())(()(6)())

2025 Annual Guidance

* Full year 2025 average net production forecast at 43,000 to 45,000
boepd.(()(1))
* Full year 2025 operating costs forecast at USD 18 to 19 per boe.(()(3))
* Full year 2025 OCF guidance estimated at between MUSD 210 and 280 (assuming
Brent USD 65 to 85 per barrel).(()(3))
* Full year 2025 capital and decommissioning expenditures guidance forecast at
MUSD 320, including MUSD 230 relating to Blackrod capital expenditure.
* Full year 2025 FCF ranges from approximately MUSD 80 to 150 (assuming Brent
USD 65 to 85 per barrel) before taking into account proposed Blackrod
capital expenditures, or negative MUSD 150 to 80 including proposed Blackrod
capital expenditures.(()(3))

Business Plan Production and Cash Flow Guidance

* 2025 - 2029 business plan forecasts:

* average net production forecast approximately 57,000 boepd.((1))((8))
* capital expenditure forecast of USD 8 per boe, including USD 3 per boe
for growth expenditure.(()(8))
* operating costs forecast of USD 18 to 19 per boe.((3))((8))
* FCF forecast of approximately MUSD 1,200 to 2,000 (assuming Brent USD
75 to 95 per barrel).((3)()()(8)())

* 2030 - 2034 business plan forecasts:

* average net production forecast of approximately 63,000 boepd.((1))((8))
* capital expenditure forecast of USD 5 per boe.((8))
* operating costs forecast of USD 18 to 19 per boe.((3))((8))
* FCF forecast of approximately MUSD 1,600 to 2,600 (assuming Brent USD
75 to 95 per barrel).((3)()()(8)())

Three months ended December Year ended
31 December 31
------------------------------ ------------------
USD Thousands 2024 2023 2024 2023
-------------------------------------------------------- ------------------
Revenue 199,124 198,460 797,783 853,906

Gross profit 42,774 39,955 210,171 250,514

Net result 415 29,710 102,219 172,979

Operating cash flow ((3)) 78,158 73,634 341,989 353,048

Free cash flow ((3)) (61,476) (64,688) (135,497) 2,689

EBITDA ((3)) 76,184 66,284 335,488 350,618

Net Cash / (Debt) ((3)) (208,528) 58,043 (208,528) 58,043
-------------------------------------------------------- ------------------

IPC was launched in 2017 by way of spinning off the non-Norwegian assets from
Lundin Energy. The strategy and vision from the outset was to be the
international E&P growth vehicle for the Lundin Group by pursuing growth
organically and through acquisitions. The foundation of this strategy was and is
predicated on maximising long-term stakeholder value through responsible
business operations focused on operational excellence and financial resilience
to underpin optimal capital allocation decision-making.

We are very pleased with the track record of value creation achieved by the
company to date. IPC's production, reserves, resources and cash flow exposure
has increased materially through accretive acquisitions supplemented by base
business investment. Excluding the growth capital expenditure assigned to the
Blackrod Phase 1 development, over USD 1.5 billion in free cash flow (FCF) has
been generated and over USD 0.5 billion has been returned to shareholders in the
form of share buybacks since inception. IPC's current shares outstanding are
less than 5% higher than the original shares outstanding upon the formation of
the company. IPC is determined to build on the historical success and the growth
outlook has never been brighter.((3))

2024 was a milestone year for the company through successfully delivering the
largest capital investment campaign in its history. The record investment was
accompanied by strong safety, operational and financial performance. IPC
returned USD 102 million of value to shareholders in the year through share
repurchases, whilst maintaining a strong balance sheet.

Oil prices were rangebound in 2024 between Brent USD 70 to 90 per barrel, with a
full year Brent average of USD 81 per barrel, in line with our original oil
price sensitivities guided at CMD. The fourth quarter 2024 Brent price averaged
USD 75 per barrel, the lowest quarterly price average in the year. The downward
trend in benchmark oil prices through the second half of 2024 has been slightly
reversed in current time as continuous crude inventory draws, strong demand,
underwhelming non-OPEC production growth and continued OPEC production
curtailments have supported the market balance. A new administration in the
White House presents uncertainty for the oil market, as looming tariffs and
sanctions pose a risk to global supply chain systems and trade flows. Around
40% of our 2025 Dated Brent and WTI exposure is hedged at USD 76 per barrel and
USD 71 per barrel respectively.

The fourth quarter 2024 WTI to WCS price differentials averaged less than USD
13 per barrel, around USD 2 per barrel lower than the full year average of USD
15 per barrel. The fourth quarter differential was the lowest quarterly average
since the Covid pandemic in 2020 when benchmark oil prices were more than USD
30 per barrel less than current levels. The TMX pipeline is driving the tighter
differentials with excess take-away capacity in the Western Canadian Sedimentary
Basin (WCSB) relative to supply. Close to 50% of our 2025 WCS to WTI
differential exposure is hedged at USD 14 per barrel, which should assist in
mitigating adverse effects of potential US tariffs on Canadian production.

Natural gas prices averaged CAD 1.5 per Mcf for 2024 and in the fourth quarter.
Western Canada gas storage levels continue to sit above the five-year range.
This is in part due to delays of the LNG Canada start-up project which was
supposed to be onstream at end 2024, start-up is now anticipated for mid-2025.
IPC has around 9,600 Mcf per day hedged at CAD 2.6 per Mcf for 2025.

Fourth Quarter and Full Year 2024 Highlights

During the fourth quarter of 2024, IPC's assets delivered average net production
of 47,400 boepd, in line with guidance for the quarter. Full year 2024 average
net production of 47,400 boepd was above the 2024 mid-point guidance range of
46,000 to 48,000 boepd.((1))

IPC's operating costs per boe for the fourth quarter of 2024 was USD 18.2. Full
year 2024 operating costs per boe was USD 17.0, in line with the most recent
2024 annual guidance of less than USD 18 per boe.(()(3)())

Operating cash flow (OCF) generation for the fourth quarter of 2024 was USD 78
million. Full year 2024 OCF was USD 342 million in line with the most recent
guidance of USD 335 to 342 million.(()(3)())

Capital and decommissioning expenditure for the fourth quarter of 2024 was USD
129 million. Full year 2024 capital and decommissioning expenditure of USD 442
million was in line with guidance of USD 437 million.

Free cash flow (FCF) generation was in line with guidance at negative USD 61
million during the fourth quarter of 2024, reflecting the higher level of
capital expenditure on the Blackrod Phase 1 development project. Full year 2024
FCF generation was negative USD 135 million, in line with the most recent
guidance of negative USD 140 to 133 million.(()(3)())

As at December 31, 2024, IPC's net debt position was USD 209 million. IPC's
gross cash on the balance sheet amounts to USD 247 million which provides IPC
with significant financial strength to continue progressing its strategies in
2025, including advancing the Blackrod development project, returning value to
shareholders through the 2024/2025 NCIB, and remaining opportunistic to mergers
and acquisitions activity.((3))

Blackrod Project

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 259 MMboe of 2P reserves,
with a multi-year forecast capital expenditure of USD 850 million to first oil
planned in late 2026. The Phase 1 development is planned for plateau production
of 30,000 bopd which is expected by early 2028.((1)(2))

As at the end of 2024, USD 591 million of cumulative growth capital, has been
spent on the Blackrod Phase 1 development since sanction with a peak annual
investment of USD 351 million incurred in 2024. Significant progress has been
made across all key scopes of the project including but not limited to: detailed
engineering, procurement, fabrication, drilling, construction, third party
transport pipelines, commissioning and operations planning. Site health and
safety control has been excellent with zero lost time incidents since commercial
development activities commenced.

Looking forward, USD 230 million is planned to be spent in 2025 mainly relating
to advancing the remaining fabrication, construction and substantial completion
of the Central Processing Facility (CPF) for the Phase 1 development. The
remaining growth capital expenditure to first oil is forecast to be spent in
2026 on drilling, completions and commissioning of the CPF with first steam
anticipated by end Q1 2026.

IPC is strongly positioned to deliver within plan with a clear line of sight to
start-up. The Blackrod Phase 1 project is expected to generate significant value
for all our stakeholders. And with over 1 billion barrels of best estimate
contingent resources (unrisked) beyond Phase 1, IPC is pleased to announce a
resource maturation plan that sees significant volume maturation into reserves
through low cost of less than USD 0.15 per barrel. The 2P reserves attributable
to Phase 1 has increased by 40 MMboe to 259 MMboe from year end 2023 to year end
2024.((2))

As at the end of 2024, 70% of the Blackrod Phase 1 development capital had been
spent since the project sanction in early 2023. All major work streams are
progressing as planned and the focus continues to be on executing the detailed
sequencing of events as facility modules are safely delivered and installed at
site. The total Phase 1 project guidance of USD 850 million capital expenditure
to first oil in late 2026 is unchanged. IPC intends to fund the remaining
Blackrod Phase 1 development costs with forecast cash flow generated by its
operations and cash on hand.

Stakeholder Returns: Normal Course Issuer Bid

During the period of December 5, 2023 to December 4, 2024, IPC purchased and
cancelled an aggregate of approximately 8.3 million common shares under the
2023/2024 NCIB. The average price of shares purchased under the 2023/2024 NCIB
was SEK 131 / CAD 17 per share.

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. By the
end of January 2025, IPC repurchased for cancellation over 1.4 million common
shares under the 2024/2025 NCIB. The average price of common shares purchased
under the 2024/2025 NCIB during December 2024 and January 2025 was SEK 135 / CAD
17.5 per share.

As at February 7, 2025, IPC had a total of 117,781,927 common shares issued and
outstanding, of which IPC holds 508,853 common shares in treasury.

Under the 2024/2025 NCIB, IPC may purchase and cancel a further 5.3 million
common shares by December 4, 2025. This would result in the cancellation of
6.2% of shares outstanding as at the beginning of December 2024. IPC continues
to believe that reducing the number of shares outstanding while in parallel
investing in material production growth at Blackrod will prove to be a winning
formula for our stakeholders.

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 fourth quarter
and for the full year 2024, 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. During 2024, IPC announced the commitment to
remain at end 2025 levels of 20 kg CO2/boe through to the end of 2028.((4))

Reserves, Resources and Value

As at the end of December 2024, IPC's 2P reserves are 493 MMboe. During 2024,
IPC replaced 251% of the annual 2024 production. The reserves life index (RLI)
as at December 31, 2024, is approximately 31 years.(()(1)()(2))

The net present value (NPV) of IPC's 2P reserves as at December 31, 2024 was USD
3.3 billion. IPC's net asset value (NAV) was USD 3.1 billion or SEK 287 / CAD
37 per share as at December 31, 2024.(()(1)()(2)()(5)()()(6)()()(7)())

In addition, IPC's best estimate contingent resources (unrisked) as at December
31, 2024 are 1,107 MMboe, of which 1,025 MMboe relate to future potential phases
of the Blackrod project.((1)(2))

2025 Budget and Operational Guidance

IPC is pleased to announce its 2025 average net production guidance is 43,000 to
45,000 boepd. IPC forecasts operating costs for 2025 between USD 18 and 19 per
boe.((1)(3))

IPC's 2025 capital and decommissioning expenditure budget is USD 320 million,
with USD 230 million forecast relating to Blackrod capital expenditure. The
remainder of the 2025 budget in Canada includes drilling and ongoing
optimization work at Onion Lake Thermal and Suffield Area assets. IPC also plans
to advance the next phase of infill drilling and complete well maintenance works
at the Bertam field in Malaysia. IPC expects to conduct technical studies for
future development potential in France. In all of IPC's areas of operation, IPC
has significant flexibility to control its pace of spend based on the
development of commodity prices during 2025.

Notwithstanding a modest production decline expected in 2025, IPC's production
per share metric remains largely unchanged relative to 2024 and 2023. IPC has
prioritised capital allocation to the transformational Blackrod Phase 1
development and share buybacks as opposed to further increasing its base
business investment to preserve balance sheet strength and maximise long- term
shareholder value.

Further details regarding IPC's proposed 2025 budget and operational guidance
will be provided at IPC's Capital Markets Day presentation to be held on
February 11, 2025 at 15:00 CET. A copy of the Capital Markets Day presentation
will be available on IPC's website at www.international-petroleum.com.

Notes:

(1) See "Supplemental Information regarding Product Types" in "Reserves and
Resources Advisory" below. See also the material change report (MCR) available
on IPC's website at www.international-petroleum.com and filed on the date of
this press release 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 NPV, are described
in the MCR. The reserve life index (RLI) is calculated by dividing the 2P
reserves of 493 MMboe as at December 31, 2024 by the mid-point of the 2025 CMD
production guidance of 43,000 to 45,000 boepd. Reserves replacement ratio is
based on 2P reserves of 468 boe as at December 31, 2024, sales production during
2024 of 16.6 MMboe, net additions to 2P reserves during 2024 of 41.7 MMboe, and
2P reserves of 493 MMboe as at December 31, 2024.
(3) Non-IFRS measure, see "Non-IFRS Measures" below and in the MD&A.
(4) 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.
(5) Net present value (NPV) is after tax, discounted at 10% and based upon
the forecast prices and other assumptions further described in the MCR. See
"Reserves and Resources Advisory" below.
(6) Net asset value (NAV) is calculated as NPV less net debt of USD 209
million as at December 31, 2024.
(7) NAV per share is based on 119,059,315 IPC common shares as at December
31, 2024, being 119,169,471 common shares outstanding less 110,156 common shares
held in treasury and cancelled in January 2025. NAV per share is not predictive
and may not be reflective of current or future market prices for IPC common
shares.
(8) Estimated FCF generation is based on IPC's current business plans over
the periods of 2025 to 2029 and 2030 to 2034, including net debt of USD 209
million as at December 31, 2024, with assumptions based on the reports of IPC's
independent reserves evaluators, and including certain corporate adjustments
relating to estimated general and administration costs and hedging, and
excluding shareholder distributions and financing costs. Assumptions include
average net production of approximately 57 Mboepd over the period of 2025 to
2029, average net production of approximately 63 Mboepd over the period of 2030
to 2034, average Brent oil prices of USD 75 to 95 per bbl escalating by 2% per
year, and average Brent to Western Canadian Select differentials and average gas
prices as estimated by IPC's independent reserves evaluator and as further
described in the MCR. IPC's market capitalization is at close on January
31, 2025 (USD 1,557 million based on 146.8 SEK/share, 117.7 million IPC shares
outstanding (net of treasury shares) and exchange rate of 11.10 SEK/USD). IPC's
current business plans and assumptions, and the business environment, are
subject to change. Actual results may differ materially from forward-looking
estimates and forecasts. See "Forward-Looking Statements" and "Non-IFRS
Measures" below.

International Petroleum Corp. (IPC) is an international oil and gas exploration
and production company with a high quality portfolio of assets located in
Canada, Malaysia and France, providing a solid foundation for organic and
inorganic growth. IPC is a member of the Lundin Group of Companies. IPC is
incorporated in Canada and IPC's shares are listed on the Toronto Stock Exchange
(TSX) and the Nasdaq Stockholm exchange under the symbol "IPCO".

For further information, please contact:

Rebecca Gordon Robert Eriksson
SVP Corporate Planning and Investor Relations Media Manager
rebecca.gordon@international-petroleum.com reriksson@rive6.ch
Tel: +41 22 595 10 50 Or Tel: +46 701 11 26 15

This information is information that International Petroleum Corporation is
required to make public pursuant to the EU Market Abuse Regulation and the
Securities Markets Act. The information was submitted for publication, through
the contact persons set out above, at 07:30 CET on February 11, 2025. The
Corporation's audited condensed consolidated financial statements (Financial
Statements) and management's discussion and analysis (MD&A) for the three months
and year ended December 31, 2024 have been filed on SEDAR+ (www.sedarplus.ca)
and are also available on the Corporation's website (www.international-
petroleum.com).

For more information on Forward-looking Statements, Non-IFRS Measures, Reserves
and Resources Advisory and Currency, please consult the attached PDF file.

More information:
Access the news on Oslo Bors NewsWeb site

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