Mr. William Lundin reports

INTERNATIONAL PETROLEUM CORPORATION ANNOUNCES FIRST QUARTER 2024 FINANCIAL AND OPERATIONAL RESULTS

International Petroleum Corp. has released its financial and operational results and related management's discussion and analysis for the three months ended March 31, 2024. All dollar amounts in this press release are expressed in U.S. dollars except where otherwise noted.

William Lundin, International Petroleum's president and chief executive officer, commented: "We are pleased to announce another strong quarter of production and operational performance, which was combined with favourable commodity prices. IPC achieved an average net daily production during the quarter of 48,800 barrels of oil equivalent per day. Our financial results during the quarter are in line with the 2024 guidance announced at our capital markets day in February as we continue to excel operationally across our operations in Canada, Malaysia and France. At the same time, we also continued with purchases of IPC common shares under the normal course issuer bid, having completed approximately one-third of the current 2023/2024 program between December, 2023, and March, 2024. In addition, we are progressing the development of phase 1 of the Blackrod project in Canada according to plan, which continues to forecast first oil in late 2026."

First quarter 2024 business highlights:

• Average net production of approximately 48,800 boe/d for the first quarter of 2024 was above the high end of the guidance range for the period (51 per cent heavy crude oil, 16 per cent light and medium crude oil, and 33 per cent natural gas);
• Progressing development activities on phase 1 of the Blackrod project, which remains on schedule and on budget;
• Drilled, completed and tied in three out of five 2024 budgeted Ellerslie wells within the Suffield area;
• 1.6 million International Petroleum common shares purchased and cancelled during Q1 2024 under International Petroleum's normal course issuer bid and continuing with target to complete the full 2023/2024 NCIB this year.

First quarter 2024 financial highlights:

• Operating costs per boe of $17.10 for Q1 2024, below guidance;
• Operating cash flow generation of $89-million for Q1 2024, ahead of the guidance range;
• Capital and decommissioning expenditures of $125-million for Q1 2024, in line with guidance;
• Free cash flow generation for Q1 2024 amounted to minus $43-million ($53-million pre-Blackrod phase 1 project financing);
• Gross cash of $397-million and net debt of $61-million as at March 31, 2024;
• Net result of $34-million for Q1 2024.

Reserves and resources:

• Total proven plus probable reserves as at Dec. 31, 2023, of 468 million boe, with a reserves life index of 27 years;
• Contingent resources (best estimate, unrisked) as at Dec. 31, 2023, of 1,145 MMboe.

2024 annual guidance:

• Full-year 2024 average net production guidance range maintained at 46,000 to 48,000 boe/d;
• Full-year 2024 operating costs guidance range maintained at $18 to 19 per boe;(3)
• Full-year 2024 OCF guidance estimated at between $323-million and $363-million (assuming Brent $70 to 90 per boe for the rest of 2024);
• Full-year 2024 capital and decommissioning expenditure guidance forecast maintained at $437-million;
• Full-year 2024 FCF guidance estimated at between minus $154-million and minus $114-million (assuming Brent $70 to 90 per boe for the rest of 2024), after taking into account $362-million of forecast full-year 2024 capital expenditures relating to the continued development of phase 1 of the Blackrod project and the additional oil hedges executed in March and April, 2024.

During the first quarter of 2024, oil prices remained strong, with Brent prices averaging $83 per barrel. Following the quarter, Brent prices increased to spot rates over $91 per barrel in April, 2024. Increased global crude demand revisions in combination with downward supply adjustments largely influenced by extended Organization of the Petroleum Exporting Countries plus other oil-producing countries curtailments and rising geopolitical tension in the Middle East are some of the key factors that have led to higher oil prices. Global crude inventories were largely unchanged in the first quarter and are below the five-year average. Current consensus is that the oil market will be in a deficit for the rest of 2024.

International Petroleum has taken advantage of the favourable pricing outlook by increasing its benchmark hedged volumes to around 50 per cent of its oil production at approximately $80.30 and $85.50 per barrel for West Texas Intermediate and dated Brent, respectively, for the rest of 2024. Despite a favourable outlook for crude prices, 2024 is an election year in the United States, and with recent inflation data impacting rate cut decisions, International Petroleum took prudent action to protect the business in a downside pricing scenario given the record investment year for the corporation.

In Canada, first quarter 2024, WTI to Western Canadian Select crude price differentials averaged around $19 per barrel, with differentials decreasing to around $12 per barrel in April, 2024. The Trans Mountain (TMX) pipeline began commercial operations in May, 2024, which should benefit future WTI/WCS differentials. Another positive catalyst for WCS is the reduced Mexican heavy oil exports to the United States. International Petroleum has hedged the WTI/WCS differential for approximately 70 per cent of its Canadian crude production at $15 per barrel for 2024.

Gas markets in the first quarter of 2024 were relatively weak, given the warmer-than-average weather conditions and high gas storage levels in North America. The average Alberta Energy Company gas price was $2.50 (Canadian) per thousand cubic feet for the first quarter of 2024.

First quarter 2024 highlights and full-year 2024 guidance

During the first quarter of 2024, the corporation's assets delivered average net production of 48,800 boe/d, ahead of guidance for the quarter. High uptime performance was achieved across all its assets, including resumed production in Malaysia following the completion of the previously announced well maintenance work. International Petroleum also benefited from short cycle investment activities, mainly within Southern Alberta assets in Canada, where three out of five 2024 budgeted Ellerslie wells have been drilled. The corporation maintains the full-year 2024 average net production guidance range of 46,000 to 48,000 boe/d.

Its operating costs per boe for the first quarter of 2024 were $17.10, below guidance. Full-year 2024 operating costs per boe guidance of $18 to $19 per boe remain unchanged.

Operating cash flow generation for the first quarter of 2024 was $89-million. Full-year 2024 OCF guidance is tightened to $323-million to $363-million (assuming Brent $70 to $90 per boe for the rest of 2024).

Capital and decommissioning expenditure for the first quarter of 2024 was $125-million, in line with guidance. Full-year 2024 capital and decommissioning expenditure of $437-million is unchanged.

Free cash flow generation was minus $43-million ($53-million pre-Blackrod phase 1 project financing) during the first quarter of 2024. Full-year 2024 FCF guidance is tightened to minus $154-million to minus $114-million (assuming Brent $70 to 90 per boe for the rest of 2024) after taking into account $362-million of forecast full-year 2024 capital expenditures relating to the continued development of phase 1 of the Blackrod project and the additional oil hedges executed in March and April, 2024.

As at March 31, 2024, International Petroleum's net debt position was $61-million, from a net cash position of $58-million as at Dec. 31, 2023, largely driven by the financing of forecast capital expenditures and the continuing share repurchase program. Gross cash on the balance sheet as at March 31, 2024, amounts to $397-million, providing a significant war chest to pursue the corporation's three strategic pillars of: organic growth, returning value to stakeholders, and pursuing value-adding mergers and acquisitions.

Blackrod project

In Q1 2024, International Petroleum continued to advance the development of phase 1 of the Blackrod project. Development capital expenditure to first oil is estimated at $850-million. First oil of the phase 1 development is estimated to be in late 2026, with forecast net production of 30,000 barrels of oil per day by 2028. International Petroleum forecasts development capital expenditure in 2024 for the Blackrod phase 1 project of $362-million, of which $96-million was invested in Q1 2024.

Project activities for the multiyear Blackrod phase 1 development have progressed in line with expectations. As at the end of Q1 2024, fabrication and installation have commenced, site civil and commercial road expansion works continue to advance, drilling is progressing, and third party pipeline commercial agreements are moving forward according to plan. International Petroleum intends to finance 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

In fourth quarter 2023, International Petroleum announced the renewal of the NCIB, with the ability to repurchase up to approximately 8.3 million common shares over the period of Dec. 5, 2023, to Dec. 4, 2024. Under the 2023/2024 NCIB, International Petroleum repurchased and cancelled approximately 1.2 million common shares in December, 2023, and a further 1.6 million common shares during Q1 2024. The average price of common shares purchased under the 2023/2024 NCIB during Q1 2024 was 115 Swedish kronor/$15 (Canadian) per share.

As at March 31, 2024, International Petroleum had a total of 125,438,160 common shares issued and outstanding, and International Petroleum held no common shares in treasury. As at April 30, 2024, International Petroleum had a total of 125,151,742 common shares issued and outstanding, and International Petroleum held no common shares in treasury.

Notwithstanding the record level of capital investment forecast for 2024, International Petroleum confirms its intention to continue to purchase and cancel common shares under the 2023/2024 NCIB to the remaining limit as at April 1, 2024, of 5.5 million common shares by early December, 2024. This would result in the cancellation of 6.5 per cent of shares outstanding as at the beginning of December, 2023. International Petroleum continues to believe that reducing the number of shares outstanding while in parallel investing in material production growth at the Blackrod project will prove to be a winning formula for its stakeholders.

Environmental, social and governance performance

During the first quarter of 2024, International Petroleum recorded no material safety or environmental incidents.

As previously announced, International Petroleum targets a reduction of its net greenhouse gas emission intensity by the end of 2025 to 50 per cent of International Petroleum's 2019 baseline, and International Petroleum remains on track to achieve this reduction. During the first quarter of 2024, International Petroleum announced the commitment to remain at 2025 levels of 20 kilograms carbon dioxide per boe through to the end of 2028.

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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