InPlay Oil Corp press release

InPlay Oil Corp. Announces Strategic Accretive Acquisition in Core Area and Updated Guidance

2026-08-05

TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada · M&A / Asset Transactions

Canada NewsWire

CALGARY, AB, Aug. 5, 2026/CNW/ -- InPlay Oil Corp. (TSX: IPO) (TASE: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") is pleased to announce that it has entered into a definitive agreement today to acquire a private oil and gas producer for cash consideration of $54.25 million, prior to closing adjustments (the "Acquisition").

The Acquisition supports InPlay's long-term strategy of building a disciplined and sustainable light oil focused growth company. The Acquisition builds on InPlay's proven track record of executing highly accretive acquisitions, having successfully completed five strategic acquisitions over the past decade that have helped increase production 10x and grow total proved plus probable reserves 13.5x. The acquired assets are currently producing approximately 1,400 boe/d(1)(85% light oil and NGLs) which will increase InPlay's production to over 20,100 boe/d(1)(62 - 63% light oil and NGLs), with light oil production expected to increase to over 10,500 bbl/d. The high oil weighting of the acquired assets further enhances InPlay's strong netbacks, providing meaningful accretion to Adjusted Funds Flow ("AFF")(2)and Free Adjusted Funds Flow ("FAFF")(3)on a per share basis. The acquired assets generate strong cash flow and free cash flow which will enhance InPlay's shareholder return strategy. InPlay is forecasted to generate FAFF of approximately $79 - $89 million for 2026 on a pro forma basis, including only four months for the acquired assets, which equates to a FAFF yield(3)of 20%. InPlay pays a dividend of $0.09 per month ($1.08 per year), which equates to a dividend yield of 7.2%. In addition, InPlay recently implemented a Normal Course Issuer Bid, pursuant to which the Company repurchased 0.5% of basic shares outstanding for cancellation during the month of June.

ACQUISITION HIGHLIGHTS

Highly Accretive Acquisition Metrics:Purchase price represents 2.0x net operating income(3)and 27% FAFF yield; per-share accretion of 18% to both AFF and FAFF on an annualized basis; 12% accretion to oil production per share, and 9% accretion to funds flow per barrel netback. Enhanced Free Adjusted Funds Flow with Growth Potential: InPlay forecasts the acquired assets require sustaining capital of approximately $12 million to reach and maintain production of approximately 1,500 boe/d. Based on an operating netback(3)of approximately $51.75/boe(4), the acquired assets generate sustaining net operating income(3)of $28 million and FAFF of $16 million prior to accounting for synergies. Acquired Assets are Contiguous with InPlay Assets Providing Significant Synergies: The acquired assets directly offset the Company's existing operations and are supported by Company owned and operated facilities and infrastructure, creating meaningful operational synergies and enhancing the efficiency of future development. The Company expects to integrate the acquired assets without adding corporate office personnel. As a result of these synergies, the Acquisition is expected to generate approximately $2.5 million in annual cost savings, with the majority captured immediately post closing. Expands InPlay's Belly River Position: Pro forma the Acquisition, InPlay will be producing approximately 2,000 boe/d(1)from the Belly River, which at approximately 85% liquids weighting offers strong netbacks and high rate of return development opportunities. Sustainability and Drilling Inventory: The acquired assets include 50 identified drilling locations, 75% of which are Tier 1 inventory(6)with expected payouts of less than 1.5 years at US $70/bbl WTI pricing.

"This Acquisition represents another important step in advancing InPlay's strategy of building a disciplined, sustainable light oil company which includes strategic acquisitions" commented Doug Bartole, President and Chief Executive Officer of InPlay. "While modest in size, the Acquisition is a smart and highly accretive transaction that is expected to generate meaningful value relative to the capital invested. The acquired assets are highly complementary to our existing operations, provide meaningful operating and infrastructure synergies, and add a deep inventory of high-return drilling opportunities within our core area. The Acquisition is expected to be immediately accretive to adjusted funds flow and free adjusted funds flow per share, while maintaining conservative leverage and further enhancing our ability to generate sustainable returns for shareholders."

ACQUISITION DETAILS

InPlay has entered into an arrangement agreement (the "Arrangement Agreement") with a privately held arm's length oil and gas producer (the "Vendor"), to acquire all of the issued and outstanding shares of the Vendor for cash consideration of $54.25 million, prior to closing adjustments. Concurrent with the execution of the Arrangement Agreement, certain shareholders of the Vendor, representing in excess of 72% of the Vendor shares outstanding, have entered into irrevocable written resolutions in support of the Acquisition. The Acquisition is expected to close by the end of August 2026, subject to the satisfaction or waiver of customary closing conditions.

The Acquisition will be funded by a draw on InPlay's $190 million credit facility, with an expanded borrowing base totalling $250 million(11). Based on pro forma guidance as outlined below, InPlay anticipates Q4-2026 net debt to EBITDA(3)of 1.2x – 1.3x. The Company retains strong financial flexibility including an estimated working capital(5)surplus at June 30, 2026 of approximately $19.4 million and maintains unique access to the Israeli bond and equity markets. InPlay's series A senior unsecured bonds (which are listed on the Tel Aviv Stock Exchange) are currently trading at a yield to maturity of approximately 6.1% and include a tap feature of approximately $115 million.

The acquired assets are currently producing approximately 1,400 boe/d with the latest well coming on stream in Q1 2026. InPlay plans to drill 2.0 net Belly River wells on the acquired assets post-closing and forecasts the acquired assets will require sustaining capital of approximately $12 million to reach and maintain annual average production of approximately 1,500 boe/d. Based on an operating netback of approximately $51.75/boe, the acquired assets generate sustaining net operating income of $28 million, resulting in sustaining FAFF of $16 million. The acquired assets contain 50 net drilling locations, and subject to supportive commodity prices, the acquired assets are expected to offer strong growth potential in excess of the target sustaining production.

The Acquisition's purchase price represents approximately 2.0x operating income and is highly accretive to InPlay on both AFF and FAFF per share metrics while maintaining conservative corporate leverage ratios. A summary of the relevant metrics of the Acquisition is as follows:

| Purchase Price | $54.25 million | | Current Production(1) | ~1,400 boe/d (85% oil and NGL) | | Net Locations(6)(7) | 50 | | Operating Netback(3)(4) | $51.75/boe | | Net Operating Income(3)(4) | $26.5 million | | Reserves(7) | | | Proved | 4.8 Mmboe | | Proved plus Probable | 6.6 Mmboe | | Acquisition Metrics (2026E) | | | Multiple of Operating Income(3)(4) | 2.0x | | FAFF Yield(3) | 27 % | | Multiple of Flowing Barrel Production(8) | $38,750/boe/d | | Multiple of Proved Reserves(7) | $11.38/boe |

OPERATIONS UPDATE

InPlay's capital program for the second quarter of 2026 consisted of completing and bringing online three gross (3.0 net) Cardium wells in Pembina drilled in the first quarter of 2026, and the drilling and completion of three gross (3.0 net) additional Cardium wells also in Pembina. The most recent three wells were drilled approximately 40 days ahead of schedule, as the Company was able to access the field earlier than is normally anticipated during spring break-up. These wells were brought on production in late May and have materially exceeded internal expectations. Initial production ("IP") rates for these three wells are as follows:

| | 12-17 Pad (per well average) | | | | boe/d | Oil and NGLs % | | IP 30 | 426 | 82 % | | IP 60 | 417 | 78 % | | Current | 398 | 71 % | | | 30% above type curve | |

The three wells drilled in the first quarter continue to deliver strong results ahead of internal expectations. The IP rates for these wells are as follows:

| | 14-33 Pad (per well average) | | | | boe/d | Oil and NGLs % | | IP 30 | 363 | 91 % | | IP 60 | 379 | 89 % | | IP 90 | 371 | 87 % | | Current | 350 | 83 % | | | 48% above type curve | |

InPlay's year to date capital program has been completed below budget, resulting in strong capital efficiencies and continuing the "more with less" performance achieved in 2025. Supported by enhanced efficiencies and strong commodity prices, InPlay now plans to drill a total of 15.0 net Cardium wells in 2026, including 7.0 net Cardium wells during the second half of the year, for total capital expenditures of approximately $73 - $74 million, prior to incorporating the expanded pro forma capital program. This compares with InPlay's original 2026 capital program of $66 million to $74 million, which contemplated the drilling of 12.0 to 14.0 net wells.

Additionally, InPlay plans to drill 2.0 net Belly River wells on the newly acquired assets, bringing the pro forma 2026 drilling program to a total of 17.0 net wells and combined capital expenditures of approximately $80 - $82 million.

In addition, InPlay plans to accelerate its asset retirement closure spend to reduce its decommissioning liability. This increase in asset retirement spending is supported by enhanced FAFF resulting from a more efficient 2026 capital program, stronger commodity prices and an expanded asset base associated with the Acquisition.

UPDATED 2026 PRO FORMA GUIDANCE

InPlay is also updating its previously announced 2026 guidance as follows:

| | Previous Guidance

FY 2026 | Updated Guidance

FY 2026 | | WTI (US$/bbl) | $80.50 | $80.50 | | FX (US$/CAD$) | 0.73 | 0.73 | | AECO (CAD$/GJ) | $1.75 | $1.75 | | Production (boe/d)(1) | 18,600 – 19,200 | 18,900 – 19,400 | | Light oil and NGLs (%) | 60 – 62 | 61 – 63 | | Capital ($ millions) | 66 – 74 | 80 – 82 | | Net wells | 12.0 – 14.0 | 17.0 | | AFF ($ millions)(2) | 143 – 151 | 161 – 169 | | FAFF ($ millions)(3) | 69 – 85 | 79 – 89 | | Net Debt at Year-end ($ millions)(2) | 179 – 187 | 246 – 254 | | FAFF Yield (%)(3) | 14% - 17% | 19% - 21% | | Net Debt / EBITDA(3) | 1.0x – 1.1x | 1.2x – 1.3x(10) | | Dividend ($ millions) | 30 | 30 |

ADVISORS

Burnet, Duckworth & Palmer LLP is acting as legal counsel to InPlay with respect to the Acquisition.

National Bank Financial Inc. ("NBF") is acting as Exclusive Financial Advisor to the Vendor with respect to the Acquisition. NBF has provided the Vendor with a fairness opinion that the consideration to be received by the shareholders of the Vendor is fair, from a financial point of view, to the shareholders of the Vendor.

An updated corporate presentation will be available on our website in due course. For further information please contact:

| Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632 | | Kevin Leonard Vice President Corporate & Business Development InPlay Oil Corp. Telephone: (587) 955-0635 |

Notes:

| 1. | See "Reader Advisories – Production Breakdown by Product Type" contained within this press release. | | 2. | Capital management measure. See "Non-GAAP and Other Financial Measures" for additional details. | | 3. | Non-GAAP financial measure or ratio. See "Reader Advisories – Non-GAAP and Other Financial Measures" for additional details. | | 4. | Operating Netback estimate of $51.75/boe assumes our updated guidance commodity price assumptions of US$80.50 WTI, US$1.15 MSW differential, $1.75 AECO, 0.73 FX, in addition to $18.50/boe operating and transportation costs, and $16.90/boe royalties. The acquired assets' net operating income estimate of $26.5mm multiplies 1,400 boe/d by the operating netback of $51.75/boe. The acquired assets' sustaining net operating income of $28 million multiplies 1,500 boe/d of sustaining production by the operating netback of $51.75/boe. | | 5. | Working capital includes current assets less accounts payable and accrued liabilities. | | 6. | See "Reader Advisories – Drilling Locations" for additional details. | | 7. | All reserves values and ancillary information in this press release relating to the acquired assets were derived from the oil and gas reserves evaluation with a preparation date of March 10, 2026 and as of December 31, 2025, as prepared by Sproule ERCE, the Vendor's independent reserves evaluator, in accordance with the definitions, standards and procedures of NI 51-101 (as defined herein) and the Canadian Oil and Gas Evaluation Handbook. | | 8. | Supplementary measure. See "Non-GAAP and Other Financial Measures" for additional details.. | | 9. | 2026 production and oil weighting estimated using May 2026 actuals and estimated balance of year production. | | 10.

11. | Presented as Net Debt / Q4 2026 Annualized EBITDA.

On July 24, 2026 prior to the acquisition, the Company renewed the Revolving Credit Facility, which now consists of committed amounts of a $140 million revolving line of credit and a $50 million operating line of credit. In addition, the borrowing base was expanded by $60 million, for a total borrowing base of $250 million. |

Reader Advisories

Hedging Summary

Commodity Hedges

| | Q2/26 | Q3/26 | Q4/26 | Q1/27 | Q2/27 | Q3/27 | Q4/27 | 2028 | | | | | | | | | | | | Natural Gas AECO Swap (mcf/d) | 14,215 | 14,215 | 8,560 | 4,265 | - | - | - | - | | Hedged price ($AECO/mcf) | $3.00 | $3.00 | $3.05 | $3.65 | - | - | - | - | | | | | | | | | | | | Natural Gas AECO Costless Collar (mcf/d) | 11,375 | 11,375 | 16,400 | 18,950 | - | - | - | - | | Hedged price ($AECO/mcf) | $2.45 - $3.50 | $2.45 - $3.50 | $2.85 - $4.55 | $3.00 - $4.85 | - | - | - | - | | | | | | | | | | | | Crude Oil WTI Swap (bbl/d) | 2,165 | - | 2,000 | 2,000 | - | - | - | - | | Hedged price ($USD WTI/bbl) | $62.50 | - | $61.05 | $61.05 | - | - | - | - | | Crude Oil WTI Costless Collar (bbl/d) | 500 | - | - | - | - | - | - | - | | Hedged price ($USD WTI/bbl) | $52.50 - $62.45 | - | - | - | - | - | - | - | | | | | | | | | | | | Crude Oil WTI Three-way Collar (bbl/d) | 2,500 | 1,750 | 1,750 | 1,500 | 3,000 | 2,000 | 2,000 | 2,000 | | Low sold put price ($USD WTI/bbl) | $50.00 | $50.00 | $50.00 | $60.00 | $55.50 | $60.50 | $60.50 | $50.00 | | Mid bought put price ($USD WTI/bbl) | $57.50 | $57.50 | $57.50 | $70.00 | $64.65 | $70.50 | $70.50 | $60.00 | | High sold call price ($USD WTI/bbl) | $71.95 | $72.15 | $72.15 | $82.00 | $79.65 | $83.30 | $83.30 | $70.65 | | | | | | | | | | | | Electricity AESO Swap (kW) | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | | Hedged price ($kWh) | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 |

Foreign Exchange Hedges

| | 2026 | 2027 | 2028 | 2029 | | USD/CAD FX Forward Contract (US $'000s) | 6,000 | - | - | - | | Hedged rate (USD/CAD) | $1.379 | - | - | - | | USD/CAD Costless Collar (US $'000s) | 6,000 | - | - | - | | Hedged rate – floor (USD/CAD) | $1.35 | - | - | - | | Hedged rate – ceiling (USD/CAD) | $1.40 | | | | | | | | | | | USD/CAD Variable Rate Collar (US $'000s) | 94,500 | 96,000 | - | - | | Put strike rate (USD/CAD) | $1.347 | $1.342 | - | - | | Restrike rate (USD/CAD) | $1.375 | $1.372 | - | - | | Call Strike rate (USD/CAD) | $1.402 | $1.402 | - | - | | NIS/CAD FX Forward Contract (NIS ₪'000s) | 28,726 | 67,265 | 65,298 | 496,116 | | Hedged rate (NIS/CAD) | 2.2235 | 2.2235 | 2.2235 | 2.2235 |

Currency

USD refers to United States Dollars, NIS or ILS refers to New Israeli Shekels and CAD refers to Canadian Dollars.

Non-GAAP and Other Financial Measures

Throughout this document and other materials disclosed by the Company, InPlay uses certain measures to analyze financial performance, financial position and cash flow. These non-GAAP and other financial measures do not have any standardized meaning prescribed under GAAP and therefore may not be comparable to similar measures presented by other entities. The non-GAAP and other financial measures should not be considered alternatives to, or more meaningful than, financial measures that are determined in accordance with GAAP as indicators of the Company performance. Management believes that the presentation of these non-GAAP and other financial measures provides useful information to shareholders and investors in understanding and evaluating the Company's ongoing operating performance, and the measures provide increased transparency and the ability to better analyze InPlay's business performance against prior periods on a comparable basis.

Non-GAAP Financial Measures and Ratios

Included in this document are references to the terms "free adjusted funds flow", "operating income", "operating netback per boe", "operating income profit margin" and "Net Debt to EBITDA". Management believes these measures and ratios are helpful supplementary measures of financial and operating performance and provide users with similar, but potentially not comparable, information that is commonly used by other oil and natural gas companies. These terms do not have any standardized meaning prescribed by GAAP and should not be considered an alternative to, or more meaningful than "profit before taxes", "profit and comprehensive income", "adjusted funds flow", "capital expenditures", "net debt" or assets and liabilities as determined in accordance with GAAP as a measure of the Company's performance and financial position.

Free Adjusted Funds Flow / FAFF Yield

Management considers FAFF and FAFF Yield as important measures to identify the Company's ability to improve its financial condition through debt repayment and its ability to provide returns to shareholders. FAFF should not be considered as an alternative to or more meaningful than AFF as determined in accordance with GAAP as an indicator of the Company's performance. FAFF is calculated by the Company as AFF less exploration and development capital expenditures and property dispositions (acquisitions) and is a measure of the cashflow remaining after capital expenditures before corporate acquisitions that can be used for additional capital activity, corporate acquisitions, repayment of debt or decommissioning expenditures or potentially return of capital to shareholders. Free adjusted funds flow yield is calculated by the Company as free adjusted funds flow divided by the market capitalization of the Company. Refer to the "Forward Looking Information and Statements" section for a calculation of forecast FAFF and FAFF yield.

Operating Income/Operating Netback per boe/Operating Income Multiple

InPlay uses "operating income", "operating netback per boe" and "operating income profit margin" as key performance indicators. Operating income is calculated by the Company as oil and natural gas sales less royalties, operating expenses and transportation expenses and is a measure of the profitability of operations before administrative, share-based compensation, financing and other non-cash items. Management considers operating income an important measure to evaluate its operational performance as it demonstrates its field level profitability. Operating income should not be considered as an alternative to or more meaningful than net income as determined in accordance with GAAP as an indicator of the Company's performance. Operating netback per boe is calculated by the Company as operating income divided by average production for the respective period. Management considers operating netback per boe an important measure to evaluate its operational performance as it demonstrates its field level profitability per unit of production. Operating income multiple is calculated by the Company as the Acquisition consideration divided by operating income for the acquired assets for the relevant period. Management considers operating income multiple a key performance indicator as it is a key metric used to evaluate the Acquisition in comparison to other transactions. Refer below for a calculation of the operating income multiple in relation to the Acquisition.