International Petroleum Corporation

Q2 2026 production was 42,200 barrels of oil equivalent per day, in line with guidance. Operating costs were USD 19.10 per BOE. Operating cash flow was USD 67 million and EBITDA was USD 64 million. Free cash flow was positive USD 4 million. Net debt at quarter-end was USD 509 million, about USD 4 million lower than the prior quarter. For the first half of 2026, management cited operating cash flow of USD 134 million and said revenues were almost USD 360 million, cash margin was USD 135 million, gross profit was USD 75 million, and net result was USD 23 million. Full-year guidance was maintained for production at 44,000 to 47,000 BOE/day, OpEx at USD 18 to USD 20 per BOE, CapEx at USD 163 million, operating cash flow at USD 230 million to USD 330 million, and free cash flow at USD 10 million to USD 110 million. Management expects a progressive production ramp in the second half, with stronger Q4 cash flow as Blackrod ramps and transitions from inventorying to sales mode.

The CEO framed Q2 as an inflection point, with Blackrod first oil achieved ahead of schedule and the company moving from a heavy build-out phase into one where production and cash flow should improve. He emphasized that the existing portfolio remains cash generative, that the company is focused on maximizing shareholder value, and that management is still open to M&A if the right opportunity appears. His tone was confident but cautious, repeatedly saying it was still prudent to hold guidance until Blackrod ramp-up is more visible.

The CFO highlighted that Q2 was operationally strong, with production in excess of 42,000 BOE/day, operating costs around USD 19/BOE, operating cash flow of USD 67 million, and EBITDA of USD 64 million. He stressed that operating cash flow covered CapEx in Q2 and year-to-date, and that the business is moving back into positive free cash flow as Blackrod CapEx falls away. He also noted first-half revenues of almost USD 360 million, cash margin of USD 135 million, gross profit of USD 75 million, net result of USD 23 million, net debt of about USD 510 million, about USD 10 million of quarterly net interest expense, and around USD 4.2 million to USD 4.3 million of quarterly G&A; benchmark hedging has ended, but differential hedges remain in place and are in the money with about USD 6 million of positive mark-to-market.

Analysts focused on why management did not raise full-year production guidance after Blackrod first oil came earlier than expected, and management said the initial well pairs are encouraging but it is still prudent to keep the full-year range unchanged for now. Questions also addressed hedging and capital allocation: management said it is generally bullish long term but wants a lighter approach to benchmark hedging now that major CapEx is behind them, preferring differential and transport hedges; on buybacks, they said they remain opportunistic and have capacity for about 6.5 million shares, but have prioritized executing Blackrod. They also said dividends are less likely in the near term because IPC is still in a growth phase, while 2027 CapEx details will be disclosed later at a future Capital Markets Day.