InPlay Oil Corp. Announces Second Quarter 2025 Financial and Operating Results and Provides Operations Update

Executive Summary

• InPlay Oil Corp. reported its second quarter 2025 financial and operating results, marking the first full quarter following the strategic acquisition of Cardium-focused light oil assets in the Pembina area of Alberta.
• The company achieved significant production growth, with Q2 average production reaching 20,401 boe/d (a 125% increase from Q1), driven by strong performance from newly drilled wells that outperformed type curves by approximately 135%.
• Financial highlights include Adjusted Funds Flow (AFF) of $40.1 million and Free Adjusted Funds Flow (FAFF) of $35.5 million, enabling a net debt reduction of approximately $26 million and maintaining a Net Debt/EBITDA ratio of 1.2x.
• Strategic shareholder Delek Group Ltd. has become a 32.7% stakeholder, and the company reaffirmed its 2025 guidance, expecting average production at the upper end of the range ($16,000–16,800 boe/d) and capital spending in the lower half of the budget ($53–$60 million).

Key Details

• Production Metrics:
  • Q2 2025 Average Production: 20,401 boe/d (62% light crude oil and NGLs).
  • Light and medium crude oil: 10,328 bbls/d.
  • Natural gas liquids: 2,401 boe/d.
  • Conventional natural gas: 46,029 Mcf/d.
  • Production exceeded internal forecasts by approximately 1,000 boe/d.
  • Seven (7.0 net) wells brought onstream in March outperformed type curves by ~135% based on first 120 days of initial production (IP).
  • Current production based on field estimates remains at 19,400 boe/d despite no new wells since March.
• Financial Performance (Three Months Ended June 30, 2025):
  • Oil and natural gas sales: $91.6 million.
  • Adjusted Funds Flow (AFF): $40.1 million ($1.49 per basic share).
  • Free Adjusted Funds Flow (FAFF): $35.5 million ($1.32 per basic share).
  • Operating Income: $50.5 million (55% profit margin).
  • Net Loss: $3.2 million (excluding one-time transaction costs and unrealized hedging impacts, Adjusted Net Income was $2.0 million or $0.08 per basic share).
  • Dividends Paid: $7.9 million ($0.09 per share).
• Balance Sheet & Capital Management:
  • Net Debt: $223.2 million (down ~$26 million from prior period/forecast).
  • Net Debt to EBITDA Ratio: 1.2x.
  • Capital Expenditures: $4.6 million (limited spend in Q2).
  • Property Acquisitions: $293.3 million (reflecting the Cardium acquisition).
• Operational Efficiency & Pricing:
  • Operating Netback: $27.20/boe (up 6% from Q1 2025).
  • Realized Light Crude Oil & NGLs Price: $75.13/bbl.
  • Realized Natural Gas Price: $1.83/Mcf.
  • Wells achieved payout in under 90 days in a US$60 WTI pricing environment.
• Strategic Developments:
  • Delek Group Ltd. acquired a 32.7% strategic stake in InPlay.
  • Company secured commodity hedges extending through 2025 and into 2026.
  • Hedged >70% of natural gas production and ~60% of light crude oil production for H2 2025.
• 2025 Guidance & Outlook:
  • Expected 2025 Average Production: Upper end of guidance range (16,000–16,800 boe/d).
  • Expected 2025 Capital Spending: Lower half of budget ($53–$60 million).
  • Planned Drilling: 5.0 – 5.5 net Cardium wells in Pembina for remainder of 2025.
  • Second half drilling campaign commenced in August with a three-well pad spudded.
  • Drilling inventory expanded to over 400 locations post-acquisition.
  • Corporate base decline rate lowered to 24%.
  • 2025 Forecasted FAFF expected to be 2.5 times the base dividend.

Notable Quotes

• "We are excited about InPlay's future following the highly accretive acquisition completed in the second quarter. This transformative transaction has significantly enhanced the Company's scale, market capitalization, and long-term sustainability."
• "InPlay is off to a very strong start with second quarter production exceeding expectations by approximately 1,000 boe/d... These wells achieved payout in under 90 days in a US$60 WTI pricing environment."
• "We are very optimistic about building on the momentum from our strategic Acquisition that has transformed the future of the Company."