InPlay Oil Corp. Announces 2026 Capital Budget

2026-02-24

TSX - Toronto Stock Exchange · Oil · Natural Gas · Natural Gas Liquids · Canada

InPlay Oil Corp. Announces 2026 Capital Budget Canada NewsWire

CALGARY AB, Feb. 24, 2026 /CNW/ - InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") announces that its Board of Directors have approved a capital program of $66 – $74 million for 2026.

InPlay had a stellar 2025 with an accretive and transformational acquisition in our core area and a very successful drilling program. Throughout 2025, InPlay delivered improved capital efficiencies through the successful application of enhanced drilling and completion techniques, driving production results that exceeded internally modelled type curves while achieving well costs below budget. InPlay's improved capital efficiencies allowed the Company to increase its production guidance three times during 2025 with reduced capital spending.

InPlay's 2026 capital budget reflects a disciplined and capital efficient program focused on strong production growth, maximizing Free Adjusted Funds Flow ("FAFF")(2) and debt reduction. The Company plans to drill 12 – 14 net horizontal Cardium wells during 2026, with the majority of capital directed toward its Cardium-focused light oil assets in Pembina. InPlay's 2026 capital budget reflects the improved capital efficiencies realized in 2025.

Key highlights of the 2026 capital program include:

Production Growth:Forecasted average annual production of 18,600 – 19,200 boe/d(1) (60% – 62% light oil and NGLs), an 11% increase (based on mid-point) compared to estimated 2025, driven by:Low corporate base decline rate of 22% due to the favorable decline profile;

Strong corporate netbacks driven by high oil and liquids weighting; and

Enhanced capital efficiencies from high graded drilling inventory.

FAFF Generation and Dividend Sustainability:AFF(2) of $122 – $129 million;

FAFF of $48 – $63 million equating to a 11% – 15% FAFF Yield(3). FAFF exceeds the base annual dividend of $30 million (based on the current monthly dividend rate of $0.09/share or $1.08/share annualized) insulating the Company in the event of commodity price fluctuations.

InPlay's dividend represents a dividend yield of approximately 7.0% at the current share price.

Debt Reduction: Excess FAFF(3) is planned to be used to reduce debt;

Year-end Net Debt(2) of $199 – $206 million.

InPlay currently has forecasted commodity pricing similar to peers who have previously released 2026 guidance. To mitigate downside risk, InPlay has implemented a comprehensive hedging program providing protection against current market volatility. Details of the Company's current hedges are provided in the "Hedging Summary" section of the Reader Advisories.

The table below outlines InPlay's 2026 guidance:

2026 Forecast

WTI (US$/bbl)

$63.00

FX (CAD$/USS)

0.73

AECO (CAD$/GJ)

$2.35

Production (boe/d) (1)

18,600 – 19,200

Capital ($ millions)

66 – 74

Net wells

12 – 14

AFF ($ millions) (4)

122 – 129

FAFF ($ millions) (2)

48 – 63

Net Debt at Year-end ($ millions) (4)

199 – 206

Annual Net Debt / EBITDA (2)

1.3x – 1.4x

Dividend ($ millions)

In the first quarter of 2026, the Company plans to have its most active capital spend quarter of the year with five (5.0 net) horizontal wells being drilled. To date, InPlay has drilled and recently completed a two (2.0 net) ERH well-pad which have recently come on production. InPlay has also started drilling operations on a three (3.0 net) ERH well-pad which is expected to come on-line at the end of March. The majority of the capital spend on the remaining 7 – 9 net horizontal wells planned for the year is expected to occur in the second half of 2026.

InPlay continues to closely monitor global trade, geopolitical and commodity dynamics, proactively evaluating capital plans in response to pricing volatility, inflationary cost pressures, and other factors affecting the business. The Company will remain flexible and make decisions based on our core strategy of disciplined capital allocation, maintaining financial strength to ensure the long term sustainability of our strategy and return to shareholder program. Should commodity prices improve and stabilize, the Company will remain disciplined and flexible, with the ability to swiftly adjust its capital activity to align with evolving market conditions.

2025 Update

The Company is finalizing its results for 2025 and expects to achieve production of approximately 17,000 boe/d(1) (61% light crude oil and liquids) in line with the mid-point of our last forecast of 16,900 – 17,100 boe/d and 600 boe/d ahead of the mid-point of our original post acquisition forecast of 16,000 – 16,800 boe/d. In comparison to average production of 8,712 boe/d in 2024, production increased by approximately 95% in 2025.

Looking ahead after a transformation year with efficient capital spending, we remain focused on continued profitable development of our high-return asset base and are committed to delivering strong returns to shareholders through 2026 and beyond. On behalf of the management team and Board of Directors, we extend our gratitude to our employees, shareholders and bondholders for their support of the Company and the Canadian oil and gas industry.

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) 955-0634

Notes:

See "Production Breakdown by Product Type" at the end of this press release.

Capital management measure. See "Non-GAAP and Other Financial Measures" contained within this press release.

Non-GAAP financial measure or ratio that does not have a standardized meaning under International Financial Reporting Standards (IFRS) and GAAP and therefore may not be comparable with the calculations of similar measures for other companies. Please refer to "Non-GAAP and Other Financial Measures" contained within this press release and in our most recently filed MD&A.

Supplementary measure. See "Non-GAAP and Other Financial Measures" contained within this press release.

Common share and per common share amounts have been updated to reflect the six for one (6:1) common share consolidation effective April 14, 2025.

Reader Advisories

Hedging Summary

Q1/26

Q2/26

Q3/26

Q4/26

Q1/27

Q2/27

Natural Gas AECO Swap (mcf/d)

15,165

14,215

8,560

4,265

Hedged price ($AECO/mcf)

$2.85

$3.00

$3.05

$3.65

Natural Gas AECO Costless Collar (mcf/d)

12,320

11,375

16,400

18,950

Hedged price ($AECO/mcf)

$2.25 - $3.50

$2.45 - $3.50

$2.85 - $4.55

$3.00 - $4.85

Crude Oil WTI Swap (bbl/d)

3,750

2,000

Hedged price ($USD WTI/bbl)

$60.30

$60.90

$61.05

Crude Oil WTI Costless Collar (bbl/d)

500

Hedged price ($USD WTI/bbl)

$52.50 - $62.40

$52.50 - $62.45

Crude Oil WTI Three-way Collar (bbl/d)

1,000

2,500

1,750

1,000

Low sold put price ($USD WTI/bbl)

$50.00

$45.00

Mid bought put price ($USD WTI/bbl)

$57.50

$52.50

High sold call price ($USD WTI/bbl)

$72.10

$71.95

$72.15

$71.85

USD/CAD FX Forward Contract (US $'000s )

2,000

Hedged rate (USD/CAD)

1.379

USD/CAD Costless Collar (US $'000s )

2,000

Hedged rate (USD/CAD)

$1.35 - $1.40

USD/CAD Variable Rate Collar (US $'000s)

3,750

Put strike rate (USD/CAD)

$1.35

Restrike rate (USD/CAD)

$1.38

Call Strike rate (USD/CAD)

$1.40

Electricity AESO Swap (kW)

1,000

Hedged price ($kWh)

$0.06217

Reference currency

Buy / Sell

NIS Amount

($'000s)

Average forward rate

(NIS/CAD)

Expiry

ILS

Sell

516,135

2.2585

February 13, 2026

ILS

Buy

11,547

2.2235

June 12, 2026

ILS

Buy

17,179

2.2235

December 14, 2026

ILS

Buy

17,086

2.2235

June 14, 2027

ILS

Buy

50,179

2.2235

December 14, 2027

ILS

Buy

16,149

2.2235

June 14, 2028

ILS

Buy

49,149

2.2235

December 14, 2028

ILS

Buy

15,035

2.2235

June 14, 2029

ILS

Buy

481,081

2.2235

December 14, 2029

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 Profit Margin

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 profit margin is calculated by the Company as operating income as a percentage of oil and natural gas sales. Management considers operating income profit margin an important measure to evaluate its operational performance as it demonstrates how efficiently the Company generates field level profits from its sales revenue. Refer to the "Forward Looking Information and Statements" section for a calculation of forecast operating income, operating netback per boe and operating income profit margin.

Net Debt to EBITDA

Management considers Net Debt to EBITDA an important measure as it is a key metric to identify the Company's ability to fund financing expenses, net debt reductions and other obligations. EBITDA is calculated by the Company as adjusted funds flow before interest expense. When this measure is presented quarterly, EBITDA is annualized by multiplying by four. When this measure is presented on a trailing twelve month basis, EBITDA for the twelve months preceding the net debt date is used in the calculation. This measure is consistent with the EBITDA formula prescribed under the Company's Credit Facility. Net Debt to EBITDA is calculated as Net Debt divided by EBITDA. Refer to the "Forward Looking Information and Statements" section for a calculation of forecast Net Debt to EBITDA.

Capital Management Measures

Adjusted Funds Flow

Management considers adjusted funds flow to be an important measure of InPlay's ability to generate the funds necessary to finance capital expenditures. Adjusted funds flow is a GAAP measure and is disclosed in the notes to the Company's financial statements for the three and nine months ended September 30, 2025. All references to adjusted funds flow throughout this document are calculated as funds flow adjusting for decommissioning expenditures. Decommissioning expenditures are adjusted from funds flow as they are incurred on a discretionary and irregular basis and are primarily incurred on previous operating assets. The Company also presents adjusted funds flow per share whereby per share amounts are calculated using weighted average shares outstanding consistent with the calculation of profit per common share.

Net Debt

Net debt is a GAAP measure and is disclosed in the notes to the Company's financial statements for the three and nine months ended September 30, 2025. The Company closely monitors its capital structure with the goal of maintaining a strong balance sheet to fund the future growth of the Company. The Company monitors net debt as part of its capital structure. The Company uses net debt (bank debt plus accounts payable and accrued liabilities less accounts receivables and accrued receivables, prepaid expenses and deposits and inventory) as an alternative measure of outstanding debt. Management considers net debt an important measure to assist in assessing the liquidity of the Company.

Supplementary Measures

"Average realized crude oil price" is comprised of crude oil commodity sales from production, as determined in accordance with IFRS, divided by the Company's crude oil volumes. Average prices are before deduction of transportation costs and do not include gains and losses on financial instruments.

"Average realized NGL price" is comprised of NGL commodity sales from production, as determined in accordance with IFRS, divided by the Company's NGL volumes. Average prices are before deduction of transportation costs and do not include gains and losses on financial instruments.

"Average realized natural gas price" is comprised of natural gas commodity sales from production, as determined in accordance with IFRS, divided by the Company's natural gas volumes. Average prices are before deduction of transportation costs and do not include gains and losses on financial instruments.

"Average realized commodity price" is comprised of commodity sales from production, as determined in accordance with IFRS, divided by the Company's volumes. Average prices are before deduction of transportation costs and do not include gains and losses on financial instruments.

"Adjusted funds flow per weighted average basic share" is comprised of adjusted funds flow divided by the basic weighted average common shares.

"Adjusted funds flow per weighted average diluted share" is comprised of adjusted funds flow divided by the diluted weighted average common shares.

"Adjusted funds flow per boe" is comprised of adjusted funds flow divided by total production.

Preliminary Financial Information

The Company's expectations set forth in the updated forecasted 2025 guidance are based on, among other things, the Company's anticipated financial results for the three and twelve month periods ended December 31, 2025. The Company's anticipated financial results are unaudited and preliminary estimates that: (i) represent the most current information available to management as of the date of hereof; (ii) are subject to completion of audit procedures that could result in significant changes to the estimated amounts; and (iii) do not present all information necessary for an understanding of the Company's financial condition as of, and the Company's results of operations for, such periods. The anticipated financial results are subject to the same limitations and risks as discussed under "Forward Looking Information and Statements" below. Accordingly, the Company's anticipated financial results for such periods may change upon the completion and approval of the financial statements for such periods and the changes could be material.

Forward-Looking Information and Statements

This document contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "expect", "anticipate", "continue", "estimate", "may", "will", "project", "should", "believe", "plans", "intends", "forecast" and similar expressions are intended to identify forward-looking information or statements. In particular, but without limiting the foregoing, this document contains forward-looking information and statements pertaining to the following: the Company's business strategy, milestones and objectives; the Company's planned 2026 capital program; the Company's anticipated 2026 annual average production and product mix; the Company's expectations regarding FAFF and dividend sustainability; the Company's plans to use excess FAFF to reduce debt and the anticipated benefits therefrom; InPlay's current and future commodity hedges and the anticipated benefits thereof; 2026 guidance based on the planned capital program and all associated underlying assumptions set forth in this news release including, without limitation, forecasts of 2026 annual average production levels, adjusted funds flow, free adjusted funds flow, Net Debt/EBITDA ratio, operating income profit margin, net debt and management's belief that the Company can grow some or all of these attributes and specified measures; the anticipated timing and allocations of capital spending in 2026; the Company's drilling program and the anticipated timing and benefits thereof; anticipated timing of the 3 ERH well-pad coming on-line; expectations regarding future commodity prices; that the Company will remain flexible and make decisions based on its core strategies; the Company's expectations regarding full year 2025 annual average production and product mix; future oil and natural gas prices; future liquidity and financial capacity; future results from operations and operating metrics; future costs, expenses and royalty rates; future interest costs; the exchange rates between USD and CAD and NIS and CAD; future development, exploration, acquisition, development and infrastructure activities and related capital expenditures, including our planned 2026 capital program; the amount and timing of capital projects; methods of funding our capital program; and other such similar statements.

The internal projections, expectations, or beliefs underlying the 2026 capital budget and associated guidance are subject to change in light of, among other factors, changes to U.S. economic, regulatory and/or trade policies (including tariffs), the impact of world events including the Russia/Ukraine conflict and war in the Middle East, ongoing results, prevailing economic circumstances, volatile commodity prices, and changes in industry conditions and regulations. InPlay's 2026 financial outlook and revised guidance provides shareholders with relevant information on management's expectations for results of operations, excluding any potential acquisitions or dispositions, for such time periods based upon the key assumptions outlined herein. Readers are cautioned that events or circumstances could cause capital plans and associated results to differ materially from those predicted and InPlay's revised guidance for 2026 may not be appropriate for other purposes. Accordingly, undue reliance should not be placed on same.

Earlier from InPlay Oil Corp

InPlay Oil Corp. Completes $242 Million Bond Offering 2026-02-11
InPlay Oil Corp. Announces Bond Offering 2026-02-05
InPlay Oil Corp. Confirms Monthly Dividend for February 2026 2026-02-02