InPlay Oil (IPO) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw continued volatility in commodity prices, with oil demand projected to grow and natural gas prices at historic lows, but long-term fundamentals remain robust.

• Operations resumed in Pembina Cardium Unit 7, with strong initial well results and significant cost reductions achieved.

• Drilling program completed for 2024, with 12.6 net wells brought on production and capital expenditures forecasted below budget.

• Fourth quarter is expected to be the strongest of the year, driven by new well performance and minimal capital spending.

Financial highlights

• Q3 2024 oil and natural gas sales were $34.2 million, down from $46.7 million in Q3 2023, impacted by lower commodity prices.

• Adjusted funds flow (AFF) for Q3 2024 was $13.1 million ($0.15 per basic share), compared to $25.2 million ($0.28 per share) in Q3 2023.

• Comprehensive income for Q3 2024 was $0.1 million, down from $7.5 million in Q3 2023.

• Dividends paid in Q3 2024 totaled $4.1 million.

• Net debt at quarter-end was $68.0 million, compared to $48.8 million a year earlier.

Outlook and guidance

• Annual production forecast remains at 8,700–9,000 boe/d (58–60% light crude oil and NGLs).

• AFF for 2024 is forecasted at $70–$73 million, with free adjusted funds flow (FAFF) of $7–$10 million.

• Net debt to EBITDA expected at 0.7x–0.8x for 2024.

• Minimal facilities capital expected for 2025, with focus on maximizing FAFF, debt repayment, and maintaining low leverage.