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2021-11-02

International Petroleum Corporation Third Quarter 2021 Financial Results

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 and nine months ended September 30, 2021. In addition, IPC is pleased to announce that it has sought approval from the Toronto Stock Exchange (TSX) to commence a normal course issuer bid to repurchase its own common shares through the facilities of the TSX and Nasdaq Stockholm.

Q3 2021 Business and Financial Highlights

  • Average net production of approximately 46,800 barrels of oil equivalent (boe) per day (boepd) for the third quarter of 2021 is above the high end of the second quarter of 2021 guidance for the period (46% heavy crude oil, 18% light and medium crude oil and 36% natural gas)(1).
  • Full year 2021 average net production forecast increased to above 45,000 boepd(1), with an expected exit rate above 46,000 boepd.
  • Production from the new sustaining Pad D’ at Onion Lake Thermal, Canada successfully brought online in the third quarter of 2021, with initial performance ahead of expectations.
  • Preparations continued during the quarter for the five well infill drilling campaign at Onion Lake Thermal and for the A15 sidetrack well at the Bertam Field, Malaysia.
  • Operating costs(2) per boe of USD 14.7 for the third quarter of 2021, slightly better than Capital Markets Day (CMD) guidance. No changes to the full year guidance of USD 15.5 per boe.
  • Record high operating cash flow (OCF)(2) generation for the third quarter and first nine months of 2021 amounted to MUSD 91 and MUSD 226 respectively.
  • Full year OCF(2) guidance is increased to between MUSD 315 to MUSD 335 (actual realized prices for the first nine months of 2021 and Brent USD 75 to 85 per barrel for the fourth quarter of 2021) from MUSD 290 (Brent USD 75 per barrel).
  • Capital and decommissioning expenditures of MUSD 30 for the first nine months of 2021. Full year guidance has been reduced to MUSD 50 from MUSD 73 following the re-phasing of drilling projects in Malaysia into the first quarter of 2022.
  • Record high free cash flow (FCF)(2) generation for the third quarter and first nine months of 2021 amounted to MUSD 77 and MUSD 176 respectively.
  • Full year FCF(2) guidance is increased to between MUSD 240 million to MUSD 260 (actual realized prices for the first nine months of 2021 and Brent USD 75 to 85 per barrel for the fourth quarter of 2021) from MUSD 195 (Brent USD 75 per barrel).
  • Forecast cumulative FCF(2) for 2021 to 2025 increased from approximately MUSD 600 to MUSD 1,200 to approximately MUSD 740 to MUSD 1,200 (Brent USD 55 to 75 per barrel), generating estimated average annual FCF yield over the five year period of between 17% and 28%(3).
  • Net debt(2) of MUSD 161 as at September 30, 2021, down from MUSD 241 at the end of the second quarter of 2021 and down from MUSD 321 as at December 31, 2020.
  • Net debt(2) to 12 month rolling EBITDA(2) ratio as at September 30, 2021 was 0.6 times.
  • Net result of MUSD 31 for the third quarter of 2021.
  • IPC intends to launch a new share repurchase program, the third since the April 2017 spin-off, with the ability to repurchase at its discretion up to approximately 7% of IPC’s outstanding common shares or 10.8 million IPC shares, the maximum permitted over a twelve month period under Canadian and Swedish securities law. Implementation of the share repurchase program remains subject to TSX approval.


  Three months ended
September 30
  Nine months ended
September 30
USD Thousands 2021 2020   2021 2020
Revenue 172,551 95,346   451,113 220,811
Gross profit / (loss) 58,636 5,557   130,852 (23,416)
Net result 30,557 8,850   79,141 (32,691)
Operating cash flow 91,365 37,181   226,045 73,404
Free cash flow 76,607 22,766   175,924 (19,229)
EBITDA 89,223 34,251   220,667 65,447
Net Debt 161,199 322,092   161,199 322,092

Notes:
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