Mr. William Lundin reports

INTERNATIONAL PETROLEUM CORPORATION ANNOUNCES 2023 YEAR-END FINANCIAL AND OPERATIONAL RESULTS AND 2024 BUDGET, RESERVES AND GUIDANCE

International Petroleum Corp. has released its financial and operating results for the three months and year ended Dec. 31, 2023. (All dollar amounts in this press release are expressed in U.S. dollars, except where otherwise noted.) International Petroleum is also pleased to announce its 2024 budget, including that International Petroleum continues to progress the development of the Blackrod phase 1 project in Canada in line with schedule and budget. International Petroleum also confirms its intention to complete the previously announced normal course issuer bid to acquire a further 6.5 million common shares up to December, 2024, in addition to the 1.8 million common shares already purchased for cancellation under the NCIB in December, 2023, and January, 2024. International Petroleum's 2024 capital and decommissioning expenditure budget is $437-million (U.S.), and its 2024 average daily production guidance is between 46,000 and 48,000 barrels of oil equivalent per day. Two thousand twenty-three year-end proven plus probable reserves are 468 million boe, and best-estimate contingent resources (unrisked) are 1,145 MMboe.

William Lundin, International Petroleum's president and chief executive officer, commented: "We are very pleased to announce that IPC achieved record operational results in 2023. Our average net production was 51,100 boe/d for the full year, with very strong operational and [environmental, social and governance] performance across all our areas of operation. We exited 2023 at approximately 49,500 boe/d. In a significant investment year for our Blackrod phase 1 development project, we still produced positive annual free cash flows from our business. We also returned $95-million to shareholders through share buybacks and closed the [Cor4 Oil Corp.] acquisition for a consideration of $62-million, ending the year in a net cash position of $58-million. With significant gross cash resources of $517-million at 2023 year-end, we continue to be well positioned to deliver on our three strategic pillars of organic growth, stakeholder returns, and [mergers and acquisitions] that drive value creation for our stakeholders.

"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 [barrels of oil per day] by 2028. This transformational growth project is forecast to push IPC production levels on average from approximately 55,000 boe/d between 2024 to 2028, to approximately 65,000 boe/d between 2029 to 2033.

"On stakeholder returns, we completed the 2022/2023 NCIB program, purchasing and cancelling 9.3 million IPC common shares over the period of Dec. 5, 2022, to Dec. 4, 2023, representing approximately 6.8 per cent of the common shares outstanding at the start of that program. We immediately recommenced purchasing under the renewed 2023/2024 NCIB, purchasing for cancellation 1.2 million common shares during December, 2023, and over 600,000 common shares during January, 2024. We confirm our intention to complete the 2023/2024 NCIB by purchasing up to a further 6.5 million common shares by early December, 2024, representing a 6.5-per-cent reduction in the number of shares common outstanding at the beginning of the 2023/2024 NCIB.

"On M&A, we successfully integrated the assets acquired in March, 2023, through the acquisition of Oil Corp. adjacent to our Suffield property in Alberta, Canada. We continue to advance oil drilling operations in the exciting Ellerslie play.

"I am very pleased to have assumed the president and CEO role from Jan. 1, 2024. IPC has a world-class set of asset and management teams, which is further complemented by a very experienced and skilled board. This combined with our high-quality assets makes IPC a differentiator amongst the [exploration and production] space. I look forward to continuing to advance the proven strategies of IPC in this exciting year of financial strength, operational excellence and continued growth."

2023 business highlights:

• Average net production of approximately 49,600 boe/d for the fourth quarter of 2023 was in line with the high end of the guidance range for the period (52 per cent heavy crude oil, 13 per cent light and medium crude oil, and 35 per cent natural gas).
• Full-year 2023 average net production was 51,100 boe/d, above the high end of annual guidance and a record high for International Petroleum.
• Following the decision in first quarter 2023 to develop phase 1 of the Blackrod project, work on the project has progressed in line within the overall schedule and budget to first oil in late 2026. Key events include signing of the engineering, procurement and fabrication contract with the engineering, procurement and construction contractor for the central processing facility, advancement of facility engineering and fabrication works, access road expansion and site civil preparation works, and drilling operations.
• The company integrated the Suffield area assets acquired from Cor4 in March, 2023, and executed the drilling program in the Ellerslie play with eight wells drilled in 2023.
• Production sustaining Pad L at Onion Lake thermal was brought on-line, supporting record average daily production in 2023 from the OLT asset.
• The company sold small non-core assets in Canada for $20-million, at a significant premium to proven plus probable reserves net present value.
• In Malaysia, it completed planned maintenance turnaround at the Bertam field on scope, schedule and budget.
• In France, it delivered three new production wells at Villeperdue West and one sidetrack well at Merisier.
• It purchased and cancelled 9.3 million common shares from Dec. 5, 2022, to Dec. 4, 2023, under International Petroleum's 2022/2023 NCIB and a further 1.8 million common shares purchased for cancellation during December, 2023, and January, 2024, under the renewed 2023/2024 NCIB. Seven per cent of International Petroleum's common shares outstanding were reduced through the NCIB in 2023.
• In third quarter 2023, it published its fourth annual sustainability report and its first stand-alone report aligned with the Task Force on Climate-related Financial Disclosures.
• The company's commitment to reduce its net emission intensity to 20 kilograms carbon dioxide per boe by 2025 is extended to remain at that level through the end of 2028.

2023 financial highlights:

• Operating costs per boe of $18.30 for the fourth quarter of 2023 and $17.60 for the full year in line with full-year guidance of $17.50 to $18 per boe;
• Strong operating cash flow generation for the fourth quarter and full-year 2023 amounted to $74-million and $353-million, respectively;
• Capital and decommissioning expenditures of $130-million for the fourth quarter and $327-million for the full-year 2023, in line with most recent full-year guidance of $330-million;
• Positive free cash flow generation for the full-year 2023 of $3-million, with negative FCF generation of $65-million for the fourth quarter in line with expectations and taking into account the significant capital expenditures during the quarter; FCF for the full-year 2023, before 2023 Blackrod capital expenditure of $240-million, was $243-million;
• Net cash of $58-million and gross cash of $517-million as at Dec. 31, 2023;
• Net result of $30-million for the fourth quarter of 2023 and $173-million for the full-year 2023;
• Further strengthened International Petroleum's financial position with an increase of International Petroleum's bonds to $450-million due February, 2027, and an increase of International Petroleum's undrawn Canadian revolving credit facility to $180-million (Canadian).

Reserves, resources and value:

• Total 2P reserves as at Dec. 31, 2023, of 468 MMboe, representing a reserves replacement ratio of 78 per cent compared with year-end 2022, with a reserves life index of 27 years;
• Contingent resources (best estimate, unrisked) as at Dec. 31, 2023, of 1,145 MMboe;
• 2P reserves net asset value (NAV) as at Dec. 31, 2023, of $3,087-million (10-per-cent discount rate).

2024 annual guidance:

• Full-year 2024 average net production forecast at 46,000 to 48,000 boe/d;
• Full-year 2024 operating cost guidance forecast at $18 to 19 per boe;
• Full-year 2024 OCF guidance estimated at between $261-million and $382-million (assuming Brent $70 to 90 per boe);
• Full-year 2024 capital and decommissioning expenditure guidance forecast at $437-million, including $362-million relating to continued development of phase 1 of the Blackrod project;
• Full-year 2024 FCF ranges from approximately $144-million to $268-million (assuming Brent $70 to 90 per boe) before taking into account proposed Blackrod capital expenditures, or $218-million to $94-million, including proposed Blackrod capital expenditures.

Business plan production and cash flow guidance:

• 2024 to 2028 business plan forecasts:
  • Average net production forecast of approximately 55,000 boe/d;
  • Capital expenditure forecast of $11 per boe, including $6 per boe for the Blackrod phase 1 project;
  • Operating cost forecast of $18 per boe;
  • FCF forecast of approximately $900-million to $1.8-billion (assuming Brent $75 to 95 per boe);
• 2029 to 2033 business plan forecasts:
  • Average net production forecast of approximately 65,000 boe/d;
  • Capital expenditure forecast of $5 per boe;
  • Operating costs forecast of $18 per boe;
  • FCF forecast of approximately $1.75-billion to $2.8-billion (assuming Brent $75 to $95 per boe).

                             FINANCIAL HIGHLIGHTS
                          (dollars are in thousands)

                            Three months ended Dec. 31,      Year ended Dec. 31,  
                                   2023           2022        2023         2022    

Revenue                        $198,460       $254,615    $853,906   $1,129,298
Gross profit                     39,955         95,411     250,514      516,709
Net result                       29,710         61,183     172,979      337,725
Operating cash flow              73,634        113,668     353,048      622,947
Free cash flow                  (64,688)        65,288       2,689      430,242
EBITDA                           66,284        125,651     350,618      639,480
Net cash                         58,043        175,098      58,043      175,098
                               --------       --------   ---------   ----------

2024 budget and operational guidance

International Petroleum is pleased to announce its 2024 average net production guidance is 46,000 to 48,000 boe/d. International Petroleum forecasts operating costs for 2024 to be $18 to 19 per boe.

International Petroleum forecasts FCF generation based on its 2P reserves base of in aggregate more than $900-million to $1.8-billion over the period of 2024 to 2028. In addition, International Petroleum forecasts FCF generation of $1.75-billion to $2.8-billion over the period of 2029 to 2033.

International Petroleum's 2024 capital and decommissioning expenditure budget is $437-million, with $362-million forecast relating to the phase 1 development of the Blackrod project. The rest of the 2024 budget in Canada includes: drilling at the Suffield and Ferguson assets, further development of the Mooney asset, and continuing optimization work. International Petroleum also completed well workover operations in Malaysia by January, 2024, and expects to conduct technical studies for future development potential. Following the successful execution of the 2023 drilling campaign in France, the subsurface teams are maturing drilling targets within the Paris basin.

Two thousand twenty-four is set to be a record growth investment year for International Petroleum. It has therefore set a limited sustaining capital expenditure plan of $75-million, inclusive of decommissioning, across the producing assets in the portfolio. With robust cash flow being generated from the producing assets and gross cash resources of $517-million, International Petroleum intends to fully complete the remaining share buybacks available under the NCIB program through 2024.

In all of International Petroleum's areas of operation, International Petroleum has significant flexibility to control its pace of spend based on the development of commodity prices during 2024.

Further details regarding International Petroleum's proposed 2024 budget and operational guidance will be provided at International Petroleum's capital markets day presentation to be held on Feb. 6, 2024, at 2 p.m. Greenwich Mean Time. A copy of the capital markets day presentation will be available on International Petroleum's website.

International Petroleum 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. International Petroleum is a member of the Lundin group of companies. International Petroleum is incorporated in Canada, and International Petroleum's shares are listed on the Toronto Stock Exchange and the Nasdaq Stockholm Exchange under the symbol IPCO.

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