International Petroleum Corporation First Quarter 2020 Financial Results and Corporate Update Toronto Stock Exchange: IPCO

VANCOUVER, British Columbia, May 6, 2020 (GLOBE NEWSWIRE) – International Petroleum Corporation (IPC or Corporation) (TSX, Nasdaq Stockholm: IPCO) today released its financial and operating results and related management’s discussion and analysis for the three months ended March 31, 2020.

Corporate update

• In the April 2, 2020 press release, IPC revised its forecast for 2020 net average production to be in the range of 30,000 to 45,000 barrels of oil equivalent (boe) per day (boepd), the estimated operating costs for 2020. will be in the range of $ 12-13 per boe, and reductions in total planned spending for 2020 of between $ 125-190 million compared to the estimates announced on IPC Capital Market Day (CMD) in February 2020 .
• The operational decisions that the IPC has subsequently made allow it to review the planned spending reductions for 2020 to between $ 175 million and $ 190 million compared to CMD estimates. This includes $ 85 million in reduced capital and decommissioning expenses and $ 90-105 million in reduced operating costs. As a result, the IPC 2020 projected net average production guidance range is from 30,000 to 37,000 boepd. Estimated capital expenditures and decommissioning of IPC for 2020 are USD 77 million and predicted operating costs for IPC for 2020 are in the range of USD 140 to 155 million, resulting in estimated unit operating costs for 2020 in the range of USD 12 to 13 per boe.
• The financial margin under the current terms of the existing and new IPC lines of credit has increased to more than USD 100 million.
• Assuming the average Brent 2020 oil prices of $ 25 a barrel and assuming Western Canadian Select (WCS) oil prices are at zero for the remainder of the year, IPC expects to use less than 40% of its existing financial margin.
• In March 2020, IPC announced the completion of the acquisition of Granite Oil Corp. (the Granite acquisition), which comprises proven light oil plus probable reserves of 14 million barrels of oil equivalent (MMboe) and 6.2 MMboe of resources. contingents (best estimate, no risk) as of December 31, 2019.

Financial and operational aspects of the first quarter of 2020

• Average net production of approximately 46,000 boepd for the first quarter of 2020 (43% of heavy crude, 20% of light and medium crude and 37% of natural gas).
• Operating costs per boe for the first quarter of 2020 of USD 12.5, slightly ahead of the guidance for the first quarter of 2020.
• Relative to IPC’s revised 2020 business plan, operating activities and capital expenditures have been reduced, deferred or canceled in each region in response to the low oil price environment.

	Three months ended March 31st
Thousands of dollars	2020		2019
Income	80,536		147,420
Gross profit	(12,436	)	46,885
Net result	(40,069	)	33,142
Operating cash flow	21,481		83,056
Free cash flow	(42,712	)	52,064
EBITDA	19,009		81,675
Net debt	302,473		256,962

• Net debt increased from $ 291 million as of December 31, 2019 (including the cost of acquiring granite) to $ 302.5 million as of March 31, 2020.
• Operating cash flow generation for the first quarter of 2020 amounted to USD 21.5 million, below the original CMD guidance as a result of weakness in commodity prices towards the end of the first quarter of 2020. This coincided with two load lifts in Malaysia in March 2020 when Brent prices averaged $ 32 a barrel and falling commodity prices also affected revenue in France, where prices are based on one-month Brent prices.
• Under the previously announced share buyback program, IPC repurchased for $ 17.6 million and canceled approximately 4.4 million IPC shares during the first quarter of 2020, in addition to the 3.9 million IPC shares canceled in 2019 In order to preserve liquidity, IPC has suspended further share buybacks under the program.

Mike Nicholson, Executive Director of IPC, commented:

“Given the extraordinary market situation facing the oil and gas business in response to the global Covid-19 outbreak, the resulting collapse of world oil demand and the initial collapse in cooperation between the OPEC + group to address the Supply Challenge, we have witnessed an unprecedented level of volatility and weak commodity prices during 2020. As a result of this, IPC announced on April 2, 2020 that we are taking decisive steps to reinstate our spending plans. 2020 in order to maximize the Company’s financial flexibility.

Since that announcement, we have seen encouraging steps taken by OPEC +, the G20 nations, and oil producers that we are confident should cut significant supply, helping to cope with the massive destruction of demand that we have witnessed, as well as the inevitable accumulation of inventory. We hope that these actions will flatten the inventory creation curve and set a course to rebalance markets in the second half of 2020 and 2021. However, it is clear that the magnitude and pace of the recovery in oil demand will be critical to reduce uncertainty around when oil prices will recover.

Restoration of the 2020 CMD business plan
Since IPC operates the majority of our assets, IPC has the financial and operational flexibility to react quickly to recent events and positively prepare the Corporation to navigate through this period of extremely low commodity prices. All remaining discretionary expenses for 2020 have been deferred or canceled and we have incorporated into our planned production range the temporary reduction in production from those fields that are not expected to generate positive cash flows at these low price levels. These production restrictions are related to a part of our oil production. Our Canadian gas production is not decreasing as we currently forecast positive cash flows.

In our April 2, 2020 announcement, we revised our 2020 net average production forecast to be in the range of 30,000 to 45,000 boepd, estimated 2020 operating costs in the range of $ 12 to 13 per boe, and reductions in the total forecast Spending in 2020 of between USD 125 and 190 million compared to the estimates of 2020 CMD.

The operational decisions we have made subsequently allow us to revise our anticipated spending reductions for 2020 to between $ 175-190 million compared to CMD estimates. This includes $ 85 million in reduced capital and decommissioning expenses and $ 90-105 million in reduced operating costs. As a result, our 2020 net average production guidance range is 30,000 to 37,000 boepd. Estimated capital expenditures and decommissioning of IPC for 2020 are USD 77 million and predicted operating costs for IPC for 2020 are in the range of USD 140 to 155 million, resulting in estimated unit operating costs for 2020 in the range of USD 12 to 13 per boe. The upper end of our revised production guide assumes that reductions in Canada until the end of June 2020 will continue until the end of the year, and the lower end of the range will mean the total reduction of our Canadian oil production in the second half of 2020 We maintain the flexibility to increase production during the second half of 2020 if market conditions improve.

Maximizing financial flexibility
After restoring our 2020 business plan, we have also been very active in engaging with our banks to ensure that we can maximize our financial flexibility. At the end of the first quarter of 2020, we had an available liquidity margin of around USD 90 million under our existing Canadian and international lines of credit. We are beginning conversations with our international banking partners to potentially extend maturity and increase our existing Reserve Based Line of Credit (RBL), as we do not believe this has been fully maximized under previous conditions. In parallel, we have been exploring IPC’s ability to access some of the special financial assistance packages offered by government authorities in France.

I am pleased to report a positive result on the latter. We have been able to obtain a 13 million euro line of credit from a French financial institution under this program. The line of credit has an initial term of 12 months and is extendable by IPC for up to five more years. The line of credit is not guaranteed and has less expensive conditions than IPC’s existing lines of credit.

In Canada, we have also started conversations with our banking partners. Our main Canadian RBL facility is currently CAD 375 million in size and we have mined CAD 297 million at the end of the first quarter. While our RBL redetermination discussions are not expected to be completed until later in the second quarter of 2020, we have been encouraged by the financial support package announced by the Federal Government of Canada, through Export Development Canada (EDC). This program aims to support the oil and gas sector by maintaining liquidity during the crisis, through the form of guarantees provided by EDC regarding RBL facilities. Our 42.5 million CAD facility assumed as part of the Granite Acquisition will not be under review until the end of the year. Currently, it is extracted in CAD 40 million.

In addition, IPC has the advantage of having a coverage program in Canada until the end of June 2020, which is expected to provide a minimum average realized WCS price of approximately USD 16 per barrel at our reduced levels of oil production in Canada. during the second trimester. 2020.

We retain access to the financial margin under the current terms of our existing and new lines of credit available for more than USD 100 million. Together with our operating options and updated coverage program, we hope to be able to fully finance our revised 2020 spending program based on cash flows and current borrowing capacity. Assuming average Brent 2020 oil prices of $ 25 per barrel, and assuming WCS oil prices are at zero for the rest of the year, we expect to use less than 40% of our existing liquidity margin. This demonstrates IPC’s financial resilience to respond to sustained low oil prices.

2020 first quarter performance
During the first quarter of 2020, our assets generated an average daily net production of 46,000 boepd, in line with our original guidance CMD Q1 2020. Our operating costs per boe for the first quarter of 2020 were $ 12.5, slightly below our original CMD Q1 2020 guide.

First quarter operating cash flow generation totaled $ 21.5 million, below our original CMD guidance as a result of weak commodity prices towards the end of the first quarter of 2020. This coincided with two uprisings Freight in Malaysia in March 2020 when Brent prices averaged $ 32 a barrel and falling commodity prices also affected revenue in France, where prices are based on one-month Brent prices.

Capital spending during the first quarter of 2020 of $ 56 million was around $ 6 million below forecast when we began implementing our spending reduction program.

Net debt increased from the year-end 2019 level from $ 291 million (including the cost of acquiring granite) to $ 302.5 million as of March 31, 2020, which also includes funding of $ 17 million of share buybacks under the share buyback program in Q1 2020. “

International Petroleum Corp. (IPC) 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. IPC is a member of the Lundin Group of Companies. IPC is incorporated in Canada and IPC shares are listed on the Toronto Stock Exchange (TSX) and on the Stockholm Nasdaq Stock Exchange under the symbol “IPCO”.

For more information contact:

Rebecca Gordon Vice President of Corporate Planning and Investor Relations [email protected] Tel: +41 22 595 10 50

OR

Robert Eriksson Media manager [email protected] Tel: +46 701 11 26 15

This information is information that International Petroleum Corporation must disclose in accordance with the EU Market Abuse Regulation and the Securities Market Act. The information was sent for publication, through the contact persons mentioned above, at 07:30 CET on May 6, 2020. The Corporation’s unaudited interim condensed consolidated financial statements (financial statements) and the Management Discussion and Analysis (MD&A) during the three months ended March 31, 2020, were presented on SEDAR (www.sedar.com) and are also available on the Corporation’s website (www.international-petroleum. com).

Forward-looking statements
This press release contains statements and information that constitute “forward-looking statements” or “forward-looking information” (within the meaning of applicable securities law). Such statements and information (collectively, “forward-looking statements”) relate to future events, including the Corporation’s future performance, business prospects, or opportunities. Actual results may differ materially from those expressed or implied in the forward-looking statements. The forward-looking statements contained in this press release are expressly qualified by this warning statement. Forward-looking statements only refer to the date of this press release, unless otherwise indicated. IPC does not intend, and assumes no obligation, to update these forward-looking statements, except as required by applicable law.

The Covid-19 virus and related restrictions and disruptions, as well as the actions of certain oil and gas producing nations, have had a drastic adverse effect in 2020 on world demand and oil and gas prices. such as the market price of the shares of oil and gas companies in general, including the Corporation’s ordinary shares. These factors are beyond the Corporation’s control and it is difficult to assess how these and other factors will continue to affect the Corporation and the market price of IPC’s common shares. In light of the current situation, as of the date of this press release, the Corporation continues to review and evaluate its business plans and assumptions regarding the business environment, as well as its estimates of future production, cash flows, operating costs, and expenses. of capital. .

All statements other than statements of historical fact may be forward-looking statements. Any statement that expresses or involves discussions regarding predictions, expectations, beliefs, plans, projections, forecasts, guidance, budgets, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “seek” , “anticipate”, “plan”, “continue”, “estimate”, “wait”, “may”, “will”, “project”, “forecast”, “predict”, “potential”, “targeting”, ” claim “,” could “,” could “,” should “,” believe “,” budget “and similar expressions) are not statements of historical fact and may be” forward-looking statements “.

Forward-looking statements include, but are not limited to, statements regarding:

• IPC’s ability to maximize liquidity and financial flexibility in relation to the Covid-19 outbreak and lower commodity prices;
• the expectation that recent actions will help reduce inventory accumulation and rebalance markets, including oil and gas supply and demand;
• 2020 production range, operating costs, and capital and decommissioning cost estimates;
• estimates of future production, cash flows, operating costs, and capital expenditures that are based on IPC’s current business plans and assumptions about the business environment, which are subject to change;
• The ability of the IPC to reduce expenses to forecast levels;
• IPC’s financial and operational flexibility to react to recent events and prepare the Corporation to navigate through periods of low commodity prices;
• The ability of the IPC to defer or cancel expenses and reduce production, and resume production at the levels expected after the reduction;
• IPC’s continued access to its existing lines of credit, including current financial margin, on terms acceptable to the Corporation;
• IPC’s ability to extend and maintain maturity and increase international RBL and to redetermine and maintain Canadian RBL, including access to EDC guarantees, on terms acceptable to the Corporation;
• the ability to fully finance 2020 expenditures from cash flows and current borrowing capacity;
• IPC’s flexibility to stay within the existing financial margin;
• IPC’s ability to maintain operations, production and business in light of the Covid-19 outbreak and related restrictions and disruptions, including risks related to production delays and disruptions, changes in laws and regulations and dependence on operators and third-party infrastructure;
• IPC’s intention and ability to continue implementing our strategies to generate long-term value for shareholders;
• the ability of the IPC asset portfolio to provide a solid foundation for organic and inorganic growth;
• the continuous uptime of the facility and the performance of the reservoir in the IPC areas of operation;
• future development potential of Suffield operations, including future oil drilling and gas optimization programs, the ability to compensate for natural falls and the N2N EOR development project;
• new conventional oil drilling in Canada, including the ability of such drilling to identify new drilling or development opportunities;
• development of the Blackrod project in Canada;
• the results of the facility optimization program, the work to eliminate the neck of the facilities and the injection capacity and production of F-Pad, as well as the problems of water consumption and steam generation, at Onion Lake Thermal;
• addition of another drilling rig at Onion Lake Thermal and resulting production from that rig;
• IPC’s ability to achieve and maintain current and projected production and take advantage of production growth and development opportunities related to the oil and gas assets acquired in the Granite acquisition;
• the capacity of the existing infrastructure acquired in the Granite acquisition to enable EOR projects, as well as the ability to allow for additional potential field development opportunities;
• the timing and success of the Villeperdue West development project, including related drilling and production rates, as well as future phases of the Vert La Gravelle redevelopment project and other organic growth opportunities in France;
• potential for future development of Triassic deposits in France and the ability to maintain current and planned production in France;
• IPC’s ability to achieve and maintain current and projected production in Malaysia and the ability to identify, mature and drill additional fill drilling locations;
• the success and timing of further corrective work on the A-15 well in Malaysia;
• IPC’s ability to acquire more common shares under the share buyback program, including the timing of such purchases;
• the return of value to IPC’s shareholders as a result of the share buyback program;
• reserve estimates;
• contingent resource estimates;
• the ability to generate free cash flows and use that cash to pay off debt; and
• future drilling and other exploration and development activities.

Statements related to “reserves” and “contingent resources” are also considered forward-looking statements, as they involve the implicit evaluation, based on certain estimates and assumptions, that the reserves and resources described exist in the amounts predicted or estimated and that the reserves and resources can be produced profitably in the future. The final recovery of reserves or resources is based on forecasts of future results, estimates of amounts not yet determinable and management assumptions.

The forward-looking statements are based on certain key expectations and assumptions made by IPC, including expectations and assumptions regarding: current commodity prices and currency exchange rates; applicable royalty rates and tax laws; Interest rates; future well production rates and reserve volumes and contingent resources; operating costs; the time of receipt of regulatory approvals; the performance of existing wells; the success obtained in drilling new wells; anticipated schedule and results of capital expenditures; the adequacy of budgeted capital expenditures to carry out the planned activities; the timing, location and scope of future drilling operations; the successful completion of acquisitions and disposals; the benefits of acquisitions; the state of the exploration and production economy and business in the jurisdictions where IPC operates and globally; the availability and cost of financing, labor and services; and the ability to successfully market crude oil, natural gas, and natural gas liquids.

Although the IPC believes that the expectations and assumptions underlying such forward-looking statements are reasonable, undue reliance should not be placed on the forward-looking statements because the IPC cannot guarantee that they are correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to:

• risks associated with the oil and gas industry in general, such as operational risks in development, exploration and production;
• delays or plan changes with respect to exploration or development projects or capital expenditures;
• the uncertainty of the estimates and projections related to reserves, resources, production, income, costs and expenses;
• risks to health, safety and the environment;
• commodity prices, including those experienced in 2020;
• exchange rate and interest rate fluctuations;
• marketing and transportation;
• loss of markets;
• Environmental risks;
• competition;
• incorrect assessment of the value of acquisitions;
• failure to complete or realize the anticipated benefits of acquisitions or disposals;
• the ability to access sufficient capital from internal and external sources;
• failing to obtain required regulatory and other approvals; and
• changes in legislation, including but not limited to tax laws, royalties, environmental and abandonment regulations.

Readers are cautioned that the above list of factors is not exhaustive.

Additional information on these and other factors that could affect IPC, or its operations or financial results, is included in the Financial Statements and MD&A for the three months ended March 31, 2020 (see the “Cautionary Statement on Forward-Looking Information ”), The Corporation’s Press Release of April 2, 2020, the Corporation’s Annual Information Form (AIF) for the year ended December 31, 2019 (see“ Cautionary Statement on Forward-Looking Information ”, “Reserve and Resource Advice” and “Risk Factors”) and other reports on file with applicable securities regulatory authorities, including prior financial reports, management analysis and discussion, and material change reports, which can be accessed at through the SEDAR website (www.sedar.com) or the IPC website (www.international-petroleum.com)

Non-IFRS measures
Reference is made in this press release to “operating cash flow” (OCF), “free cash flow” (FCF), “Earnings before interest, taxes, depreciation and amortization” (EBITDA), “operating costs” and “net debt”, which are not generally accepted accounting measures under International Financial Reporting Standards (IFRS) and do not have any standardized meaning prescribed by IFRS and, therefore, may not be comparable to similar measures presented by other public companies . Non-IFRS measures should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS.

The Corporation uses non-IFRS measures to provide investors with supplementary measures to assess the cash generated and financial performance and position of the Corporation. Management also uses non-IFRS measures internally to facilitate comparisons of operating performance from period to period, prepare annual operating budgets, and evaluate the Corporation’s ability to meet its future capital and working capital requirements. Management believes that these non-IFRS measures are important supplemental measures of operating performance because they highlight trends in the core business that would not otherwise be apparent by relying solely on IFRS financial measures. Management believes that such measures allow the Corporation’s operating performance and financial condition to be evaluated more consistently and comparably between reporting periods. The Corporation also believes that non-IFRS measures are often used by securities analysts, investors and other interested parties in the assessment of issuers. Forward-looking statements are provided for the purpose of presenting information about management’s current expectations and plans for the future, and readers are cautioned that such statements may not be appropriate for other purposes.

The definition and reconciliation of each non-IFRS measure is presented in the IPC MD&A (See “Non-IFRS measures” therein).

Disclosure of oil and gas information
This press release contains references to estimates of gross and net reserves and resources attributed to the Corporation’s oil and gas assets. Gross reserves / resources are participation in working interest (operating or non-operating) before deduction of royalties and not including interest on royalties. Net reserves / resources are the working interest share (operating or non-operating) after deduction of royalty obligations, plus royalty interest on reserves / resources, and relative to PSCs in Malaysia, adjusted for cost and oil profits. Unless otherwise indicated, reserve / resource volumes are presented in gross terms.

Reserve estimates, contingent resource estimates, and estimates of future net income for IPC’s oil and gas assets in Canada (including oil and gas assets acquired in the Granite Acquisition) are effective as of December 31, December 2019, and are included in reports prepared by Sproule Associates Limited (Sproule), a qualified and independent reserve evaluator, in accordance with National Instrument 51-101 – Disclosure standards for oil and gas activities (NI 51-101) and the Canadian Oil and Gas Assessment Manual (the COGE Manual) and the use of Sproule’s price forecasts for December 31, 2019.

Reserve estimates, contingent resource estimates, and future net income estimates for IPC’s oil and gas assets in France and Malaysia are effective as of December 31, 2019, and are included in the report prepared by ERC Equipoise Ltd . (ERCE), a qualified independent reserve auditor, in accordance with NI 51-101 and the COGE Manual, and using Sproule’s price forecasts for December 31, 2019.

The price forecasts used in the Sproule and ERCE reports are available on the Sproule website (sproule.com) and are found in the AIF. These price forecasts are as of December 31, 2019 and may not reflect current and future commodity price forecasts.

Las reservas 2P al 31 de diciembre de 2019 de 300 MMboe incluyen 286.2 MMboe atribuibles a los activos de petróleo y gas de IPC y 14.0 MMboe atribuibles a los activos de petróleo y gas adquiridos en la Adquisición de Granito. Los recursos contingentes (mejor estimación, sin marcar) al 31 de diciembre de 2019 de 1,089 MMboe incluyen 1,082.5 MMboe atribuibles a los activos de petróleo y gas de IPC y 6.2 MMboe atribuibles a los activos de petróleo y gas adquiridos en la Adquisición de Granito. El índice de vida de la reserva (RLI) se calcula dividiendo las reservas 2P de 300 MMboe al 31 de diciembre de 2019 (incluidas las reservas 2P atribuibles a los activos de petróleo y gas adquiridos en la Adquisición de Granito), por el punto medio de la CMD 2020 Guía de producción de 46,000 a 50,000 boepd.

Los tipos de productos que comprenden las reservas 2P descritas en este comunicado de prensa están contenidos en el AIF. Las reservas / recursos de crudo liviano, mediano y pesado divulgados en este comunicado de prensa incluyen gas de solución y otros subproductos.

Las reservas / recursos de crudo liviano, mediano y pesado divulgados en este comunicado de prensa incluyen gas de solución y otros subproductos.

“Reservas 2P” significa reservas probadas más probables. Las “reservas probadas” son aquellas reservas que pueden estimarse con un alto grado de certeza para ser recuperables. Es probable que las cantidades restantes reales recuperadas excedan las reservas probadas estimadas. Las “reservas probables” son aquellas reservas adicionales que es menos seguro recuperar que las reservas probadas. Es igualmente probable que las cantidades restantes reales recuperadas sean mayores o menores que la suma de las reservas probadas más probables estimadas.

Cada una de las categorías de reservas informadas (probadas y probables) puede dividirse en categorías desarrolladas y subdesarrolladas. Las “reservas desarrolladas” son aquellas reservas que se espera recuperar de los pozos existentes e instalaciones instaladas o, si las instalaciones no se han instalado, eso implicaría un gasto bajo (por ejemplo, en comparación con el costo de perforar un pozo) para poner Las reservas de producción. La categoría desarrollada puede subdividirse en productoras y no productoras. Las “reservas productoras desarrolladas” son aquellas reservas que se espera recuperar de los intervalos de finalización abiertos en el momento de la estimación. Estas reservas pueden estar produciendo actualmente o, si se cerraron, deben haber estado previamente en producción, y la fecha de reanudación de la producción debe conocerse con certeza razonable. Las “reservas no productoras desarrolladas” son aquellas reservas que no han estado en producción o han estado en producción anteriormente, pero están cerradas, y se desconoce la fecha de reanudación de la producción. Las “reservas no desarrolladas” son aquellas reservas que se espera recuperar de acumulaciones conocidas en las que se requiere un gasto significativo (por ejemplo, en comparación con el costo de perforar un pozo) para que sean capaces de producir. Deben cumplir plenamente los requisitos de la clasificación de reservas (probada, probable) a la que están asignados.

Los recursos contingentes son aquellas cantidades de petróleo estimadas, en una fecha dada, para ser potencialmente recuperables de acumulaciones conocidas utilizando tecnología establecida o tecnología en desarrollo, pero que actualmente no se consideran comercialmente recuperables debido a una o más contingencias. Las contingencias son condiciones que deben cumplirse para que una parte de los recursos contingentes se clasifique como reservas que son: (a) específicas del proyecto que se evalúa; y (b) se espera que se resuelva dentro de un plazo razonable. Las contingencias pueden incluir factores tales como asuntos económicos, legales, ambientales, políticos y regulatorios, o la falta de mercados. También es apropiado clasificar como recursos contingentes las cantidades recuperables estimadas descubiertas asociadas con un proyecto en la etapa de evaluación temprana. Contingent resources are further classified in accordance with the level of certainty associated with the estimates and may be sub-classified based on a project maturity and/or characterized by their economic status.

There are three classifications of contingent resources: low estimate, best estimate and high estimate. Best estimate is a classification of estimated resources described in the COGE Handbook as being considered to be the best estimate of the quantity that will be actually recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the best estimate.

Contingent resources are further classified based on project maturity. The project maturity subclasses include development pending, development on hold, development unclarified and development not viable. All of the Corporation’s contingent resources are classified as either development on hold or development unclarified. Development on hold is defined as a contingent resource where there is a reasonable chance of development, but there are major non-technical contingencies to be resolved that are usually beyond the control of the operator. Development unclarified is defined as a contingent resource that requires further appraisal to clarify the potential for development and has been assigned a lower chance of development until contingencies can be clearly defined. Chance of development is the probability of a project being commercially viable.

References to “unrisked” contingent resources volumes means that the reported volumes of contingent resources have not been risked (or adjusted) based on the chance of commerciality of such resources. In accordance with the COGE Handbook for contingent resources, the chance of commerciality is solely based on the chance of development based on all contingencies required for the re-classification of the contingent resources as reserves being resolved. Therefore unrisked reported volumes of contingent resources do not reflect the risking (or adjustment) of such volumes based on the chance of development of such resources.

The contingent resources reported in this press release are estimates only. The estimates are based upon a number of factors and assumptions each of which contains estimation error which could result in future revisions of the estimates as more technical and commercial information becomes available. The estimation factors include, but are not limited to, the mapped extent of the oil and gas accumulations, geologic characteristics of the reservoirs, and dynamic reservoir performance. There are numerous risks and uncertainties associated with recovery of such resources, including many factors beyond the Corporation’s control. There is uncertainty that it will be commercially viable to produce any portion of the contingent resources referred to in this press release. References to “contingent resources” do not constitute, and should be distinguished from, references to “reserves”.

2P reserves and contingent resources included in the reports prepared by Sproule and ERCE in respect of IPC’s oil and gas assets in Canada, France and Malaysia have been aggregated by IPC and may also be aggregated by IPC with the 2P reserves and contingent resources attributable to the oil and gas assets acquired in the Granite Acquisition included in the reports prepared by Sproule on behalf of IPC. Estimates of reserves, resources and future net revenue for individual properties may not reflect the same level of confidence as estimates of reserves, resources and future net revenue for all properties, due to aggregation. This press release contains estimates of the net present value of the future net revenue from IPC’s reserves. The estimated values of future net revenue disclosed in this press release do not represent fair market value. There is no assurance that the forecast prices and cost assumptions used in the reserve evaluations will be attained and variances could be material.

BOEs may be misleading, particularly if used in isolation. A BOE conversion ratio of 6 thousand cubic feet (Mcf) per 1 barrel (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.  As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil is significantly different from the energy equivalency of 6:1, utilizing a 6:1 conversion basis may be misleading as an indication of value.

Currency
All dollar amounts in this press release are expressed in United States dollars, except where otherwise noted.  References herein to USD mean United States dollars.  References herein to CAD mean Canadian dollars.