International Petroleum Corporation 2017 second quarter

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News Desk 2018
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International Petroleum Corporation 2017 second quarter financial results

International Petroleum Corporation ("IPC" or the "Corporation") (TSX, Nasdaq First North: IPCO), today released its financial and operating results and related management's discussion and analysis ("MD&A") for the three and six months ended June 30, 2017.    Mike Nicholson, IPC's Chief Executive Officer, commented, "Since launching on April 24, 2017 in Canada and Sweden, we have been focused on delivering operational excellence, demonstrating financial resilience in a low oil price environment, maximizing the value of our resource base and assessing acquisition opportunities. Delivering Operational Excellence During the first half of 2017, we have had good performance from all of our assets with production of 11,100 barrels of oil equivalent per day (boepd) coming in 4% ahead of our mid-point guidance. The Bertam FPSO maintained an exceptional uptime performance of above 99% and I am confident that we will deliver our full year production guidance of 9,000 to 11,000 boepd. Financial resilience in a low oil price environment I am very pleased with the strong operating cash flow generation in the first half of 2017 of USD 72.3 million of operating cash flow. This was ahead of forecast on the back of better delivery against our operating cost forecast, leading us to revise downwards our full year operating cost guidance to USD 17.20 per barrel of oil equivalent (boe). Having completed the share purchase offer during the second quarter, our strong cash flow generation has allowed us to reduce our net debt to USD 35.3 million, putting IPC in a very strong financial position. Maximizing the value of our resource base I am particularly pleased that we are able to report a significant contingent resource base following recent technical work undertaken by our teams in France and Malaysia. Our best estimate contingent resource base stands at 17.5 million boe (MMboe) as at June 30, 2017 or 60% of our 2P reserve base as at December 31, 2016. I believe that we can add significant value to our existing assets through a renewed focus on organic growth. I am also pleased to report that we have already moved forward with plans to develop these contingent resources. We have approved the drilling of two additional infill wells on the Bertam field in Malaysia during the fourth quarter of this year subject to finalising partner approval and securing rig capacity. These infill wells are expected to generate significant returns for shareholders with a breakeven oil price at below USD 20 per boe and to pay back in around eight months on the current forward oil price curve. From a production perspective, contribution from these infill wells is expected to enable IPC to offset the natural decline from our assets as we move into 2018. We have also approved our first ever large-scale 3D seismic acquisition on one of our largest producing fields in the Paris Basin, the Villeperdue field, targeting the low risk development of 4.1 MMboe of best estimate contingent resources and allowing us to better define the structure of the Villeperdue Deep prospect. The actions we have taken since IPC was created have positioned us to potentially convert up to one-third of our contingent resource base into reserves and value. Acquisition opportunities On the acquisitions side, we have been very active since our launch, reviewing a number of opportunities. I do believe that we sit at an optimal time in the industry cycle and feel confident that we can identify a transaction that fits IPC's strategy within the next six to twelve months. Our focus is on diversifying our production and cash flow base and acquiring a quality asset that we believe will grow materially in value through time. We have a broad geographical remit and are looking at assets in the production and/or development stage so that we can apply leverage using conservative bank lending parameters and thus minimize any dilution to our shareholders." Financial and Operational Highlights for the six months ended June 30, 2017 (reporting period)

· Total average production of 10,600 boepd net for the second quarter of 2017, 4% above mid-point guidance for that quarter and also for year to date production.
· In excess of 99% average facilities uptime on the Bertam field during the reporting period.
· Operating costs below guidance with USD 14.40 per boe  for the second quarter of 2017 and USD 13.30 per boe for the reporting period. Guidance for the full year 2017 revised down to USD 17.20 per boe.
· Bertam field scheduled shutdown completed as planned.
· Two new Bertam infill wells targeting 2.3 MMboe gross best estimate contingent resources expected to be drilled in Q4 2017.
· Capital expenditure guidance revised to USD 38 million following the approval of the Bertam infill wells and the 3D seismic program in France.
· Best estimate contingent resources base assessed by IPC at 17.5 MMboe as at June 30, 2017.
· USD 100 million senior secured revolving borrowing base facility entered into on April 20, 2017, which was initially drawn to USD 80 million.  Net debt at the end of the quarter was USD 35.3 million.
· No material incidents in the quarter in relation to health, safety and the environment.
  Three months ended Six months ended
US$ Thousands Q2 2017 Q2 2016 Q2 2017 Q2 2016
Revenue 48,496 55,568 100,428 101,790
Operating cash flow 32,644 42,746 72,319 71,930
Net result 7,113 26,954 11,574 (24,145)

International Petroleum Corp. (IPC) is a new international oil and gas exploration and production company with a high quality portfolio of assets located in Europe and South East Asia, providing a solid foundation for organic and inorganic growth. IPC is a member of the Lundin Group of Companies. IPC's shares are listed on the Toronto Stock Exchange (TSX) and the Nasdaq First North Exchange (Stockholm) under the symbol "IPCO". Pareto Securities AB is the Corporation's Certified Adviser on Nasdaq First North.

For further information, please contact: Rebecca Gordon VP Corporate Planning and Investor Relations rebecca.gordon@international-petroleum.com Tel: +41 22 595 10 50      or     Robert Eriksson Media Manager reriksson@rive6.ch 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 CEST on 8 August 2017. The Company's interim consolidated carve-out financial statements, notes to the financial statements and management's discussion and analysis have been filed on SEDAR (www.sedar.com) and are also available on the Company's website (www.international-petroleum.com). Forward-Looking Statements This press release may contain statements and information which constitute "forward-looking information" (within the meaning of applicable securities legislation). Such statements and information (together, "forward-looking statements") relate to future events, including the Company's future performance, business prospects or opportunities. Actual results may differ materially from those expressed or implied by forward-looking statements. Forward-looking statements are expressly qualified by this cautionary statement. Forward-looking statements speak only as of the date of this press release, unless otherwise indicated. IPC does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. All statements other than statements of historical fact may be forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, forecasts, guidance, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "forecast", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements include, but are not limited to, the number of Deposited Shares to be purchased by LPBV, the payment date for the Deposited Shares, statements with respect to estimates of reserves, future production levels, future capital expenditures and their allocation to exploration and development activities, future drilling and other exploration and development activities. Ultimate recovery of reserves or resources is based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Reserve estimates and estimates of future net revenue are effective as of 31 December 2016 and were prepared by IPC in accordance with standards prescribed by National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities of the Canadian Securities Administrators and audited by ERC Equipoise Ltd., an independent qualified reserves auditor. BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 Mcf per 1 Bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

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