InPlay Oil Corp press release

InPlay Oil Corp. Announces Second Quarter 2026 Financial and Operating Results

2026-08-13

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

Canada NewsWire

CALGARY, AB, Aug. 13, 2026/CNW/ -- InPlay Oil Corp. (TSX: IPO) (TASE: IPO) (OTCQX: IPOOF) ("InPlay" or the "Company") is pleased to announce its financial and operating results for the three and six months ended June 30, 2026. InPlay's unaudited interim financial statements and notes, and Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2026 will be available at "www.sedarplus.ca" and the Company's website at "www.inplayoil.com". An updated corporate presentation will be available on our website in due course.

Second Quarter 2026 Highlights:

Achieved average quarterly production of 18,663 boe/d(1)(62% light crude oil and NGLs), a 2% increase from Q1 2026. Improved light oil production to 9,382 bbl/d, a 6% increase from Q1 2026. Light crude oil weighting improved by 3% from Q1 2026 driving stronger per boe netbacks and returns. Realized strong operating income of $68.4 million, a 50% increase from Q1 2026, resulting in an operating income profit margin(4)of 55%, a 7% improvement from Q1 2026. Field operating netbacks(4)improved to $40.26/boe, an increase of 46% compared to Q1 2026. Delivered Adjusted Funds Flow ("AFF")(2)of $44.7 million ($1.61 per weighted average basic share(3)), a 48% increase from Q1 2026. Generated significant Free Adjusted Funds Flow ("FAFF")(4)of $28.4 million. Returned $7.6 million to shareholders via monthly dividends (7.2% yield relative to current share price). Since November 2022, InPlay has returned $82 million ($4.14/share) to shareholders through dividends, including dividends declared to date in the third quarter. Under the Normal Course Issuer Bid initiated on May 21, 2026, began repurchasing shares in June and 0.5% of outstanding shares were cancelled. Subsequent Events: On August 5, 2026, the Company announced it had entered into a definitive agreement to acquire a private oil and gas producer for cash consideration of $54.25 million, prior to closing adjustments adding 1,400 boe/d of current production and 50 additional net drilling locations all in our core Pembina area. On July 24, 2026, the Company renewed its Senior 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.

Message to Shareholders:

The second quarter of 2026 was another period of strong execution for InPlay. Operationally, InPlay's first half capital program was executed under budget and ahead of schedule, continuing our track-record of doing more with less. InPlay's H1 2026 drilling program also achieved IP rates that were 30% - 48% ahead of our internal projections, resulting in corporate oil production exceeding internal forecasts.

The combination of high oil prices and strong oil production led to InPlay delivering quarterly AFF of $44.7 million, the highest quarterly level in its 10- year history as a public company. InPlay also returned $7.6 million ($0.27/share) to shareholders through dividends and repurchased $2.2 million (0.5% of shares outstanding), while also reducing net debt.

InPlay's financial strength positioned the Company to be able to sign a definitive agreement to acquire a private oil and gas producer for cash consideration of $54.25 million (the "Acquisition"), funded entirely through our recently expanded credit capacity. Completing an acquisition of this quality without dilution to shareholders directly enhances per share growth and accretion. The Acquisition is expected to be 18% accretive on both AFF per share and FAFF per share, while adding 1,400 boe/d of production (85% liquids) and 50 net drilling locations in our core areas.

The Acquisition builds on InPlay's decade-long track record of value-add M&A, utilizing conservative leverage ratios to acquire high-quality, free cash flow generating assets to generate sustainable long-term shareholder returns while maintaining a conservative balance sheet. This approach supports the rapid repayment of acquisition debt, positioning the Company for the next accretive opportunity. The Acquisition advances InPlay's strategy of building a disciplined, sustainable light oil growth company by increasing production, AFF and FAFF per share while expanding its high-quality drilling inventory. The complementary assets of the Acquisition directly offset InPlay's existing operations and infrastructure, delivering immediate operational synergies.

InPlay's year to date capital program has been completed below budget, allowing the Company to increase the number of planned wells by 30% with only a 15% increase in capital (from mid-point). InPlay expanded its pre-acquisition capital program to drill a total of 15.0 net Cardium wells, an increase from 13.0 net (mid-point) Cardium wells in our original capital budget. In addition, 2.0 net Belly River wells are planned on the acquired assets, resulting in a pro forma capital program of $80 - $82 million drilling 17.0 net horizontal wells.

InPlay has increased 2026 average annual production guidance to 18,900 boe/d – 19,400 boe/d(1)(61% - 63% light oil and NGLs). The Company also increased 2026 AFF by 12% to $165 million (mid-point) from $147 million (mid-point), with no change to commodity price assumptions. This is expected to increase FAFF by 9% from $77 million (mid-point) to $84 million (mid-point), equating to a FAFF yield(4)of 20% (mid-point). The Company's leverage metrics are projected to remain strong with net debt to Q4 2026 EBITDA(4)now forecasted to be 1.25x (mid-point).

Further information related to the Acquisition and revised pro forma guidance is outlined in the Company's August 5, 2026 Press Release (Press Release - August 5, 2026).

Second Quarter 2026 Financial & Operations Overview:

InPlay completed an active capital program during the second quarter, investing $16.3 million to complete and bring on production three (3.0 net) Pembina Cardium wells drilled in the first quarter of 2026, and to drill and complete three (3.0 net) additional Pembina Cardium wells. Operational execution remained strong during the quarter, with drilling and completion operations under budget. The three most recent wells were drilled approximately 40 days ahead of schedule, as field access occurred earlier than typically anticipated following spring break-up, which was beneficial as wet weather in the second half of June and into mid-July caused delays to the start of our H2 2026 drilling program.

Quarterly production averaged 18,663 boe/d(1)(62% light crude oil and NGLs), representing a 2% increase from the first quarter of 2026. Quarterly crude oil production averaged 9,382 bbl/d, a 6% increase from the first quarter of 2026. Oil production remained strong throughout the quarter and exceeded internal forecasts.

The second quarter was our largest to date for turnaround activity and resulted in slightly increased operating costs compared to the first quarter of 2026, as well as the reactivation of shut-in, low-rate wells that went down in a lower commodity environment and are economic to return to production in the strong commodity price environment.

InPlay generated record quarterly AFF of $44.7 million ($1.61 per basic share), representing a 48% increase from the first quarter of 2026. These results were achieved despite realizing $14.1 million in hedging losses, primarily reflecting the significant increase in WTI during the quarter relative to the hedges required by our first-lien lenders to facilitate the 2025 acquisition. The Company expects minimal hedge losses in the future at our current commodity price forecast as significantly less crude oil volumes are hedged going forward and due to our strong natural gas hedges. This is reflected in the mark-to-market value of the Company's hedges, which was an asset of $6.9 million at June 30, 2026 compared to a liability of $30.5 million at March 31, 2026. Details of the Company's current hedges are provided in the "Hedging Summary" section of the Reader Advisories.

During the quarter, InPlay paid dividends of $7.6 million to shareholders, representing a 7.2% yield relative to our current share price. Since November 2022, InPlay has distributed $82 million ($4.14/share) in dividends, including dividends declared to date in the third quarter.

Net income of $22.9 million ($0.82 per basic share; $0.78 per diluted share), was realized in the second quarter of 2026 which includes a $37 million unrealized mark-to-market gain on the Company's hedge portfolio.

Financial and Operating Results:

| | Three months ended

June 30 | Six months ended

June 30 | | | | | 2026 | 2025 | 2026 | 2025 | | Financial(CDN - $millions) | | | | | | Oil and natural gas sales | 124.1 | 91.6 | 212.6 | 130.6 | | Adjusted funds flow(2) | 44.7 | 40.1 | 74.9 | 56.9 | | Per share – basic(3) | 1.61 | 1.49 | 2.69 | 2.71 | | Per share – diluted(3) | 1.53 | 1.49 | 2.54 | 2.71 | | Per boe(3) | 26.31 | 21.59 | 22.37 | 21.27 | | Comprehensive income (loss) | 22.9 | (3.2) | (11.7) | (6.1) | | Per share – basic | 0.82 | (0.12) | (0.42) | (0.29) | | Per share – diluted | 0.78 | (0.12) | (0.42) | (0.29) | | Dividends | 7.6 | 7.9 | 15.1 | 12.0 | | Per share - declared | 0.27 | 0.27 | 0.54 | 0.54 | | Capital expenditures – PP&E and E&E | 16.2 | 4.6 | 39.2 | 18.5 | | Property acquisitions | - | 293.3 | 0.4 | 293.6 | | Net debt(2) | (216.0) | (223.2) | (216.0) | (223.2) | | Shares outstanding | 27.7 | 27.8 | 27.7 | 27.8 | | Basic weighted-average shares | 27.8 | 26.9 | 27.9 | 21.0 | | Diluted weighted-average shares | 29.3 | 26.9 | 27.9 | 21.0 | | Operational | | | | | | Daily production volumes | | | | | | Light and medium crude oil (bbls/d) | 9,382 | 10,328 | 9,099 | 6,898 | | Natural gas liquids (boe/d) | 2,224 | 2,401 | 2,259 | 1,989 | | Conventional natural gas (Mcf/d) | 42,345 | 46,029 | 42,856 | 35,300 | | Total (boe/d) | 18,663 | 20,401 | 18,501 | 14,770 | | Realized prices(3) | | | | | | Light and medium crude oil & NGLs ($/bbls) | 110.95 | 75.13 | 95.42 | 72.50 | | Conventional natural gas ($/Mcf) | 1.80 | 1.83 | 2.11 | 2.00 | | Total ($/boe) | 73.08 | 49.36 | 63.47 | 48.84 | | Operating netbacks ($/boe)(4) | | | | | | Oil and natural gas sales | 73.08 | 49.36 | 63.47 | 48.84 | | Royalties | (12.51) | (6.35) | (9.69) | (6.20) | | Transportation expense | (1.07) | (0.71) | (1.00) | (0.84) | | Operating costs | (19.24) | (15.10) | (18.76) | (15.06) | | Operating netback(4) | 40.26 | 27.20 | 34.02 | 26.74 | | Realized gain (loss) on derivative contracts | (8.33) | (0.20) | (5.87) | (0.12) | | Operating netback (including realized derivative contracts)(4) | 31.93 | 27.00 | 28.15 | 26.62 |

On behalf of our employees, management team and Board of Directors, we thank our shareholders for their continued support. With a high-quality asset base, a strengthened outlook and the recently announced acquisition, InPlay is well positioned to continue generating sustainable free cash flow and long-term shareholder value.

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 "Production Breakdown by Product Type" at the end of this press release. | | 2. | Capital management measure. See "Non-GAAP and Other Financial Measures" contained within this press release. | | 3. | Supplementary financial measure. See "Non-GAAP and Other Financial Measures" contained within this press release. | | 4. | 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. |

Reader Advisories

Hedging Summary

Commodity Hedges

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

Foreign Exchange Hedges

| | | 2026 | 2027 | 2028 | 2029 | | USD/CAD Variable Rate Collar (US $'000s) | 70,500 | 96,000 | - | - | | | Put strike rate (USD/CAD) | $1.347 | $1.342 | - | - | | | Restrike rate (USD/CAD) | $1.376 | $1.372 | - | - | | | Call Strike rate (USD/CAD) | $1.403 | $1.402 | - | - | | | NIS/CAD FX Forward Contract (NIS ₪'000s) | 17,179 | 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 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 below for a calculation of operating income, operating netback per boe and operating income profit margin. 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.

| (thousands of dollars) | Three Months Ended

June 30 | Six Months Ended

June 30 | | | | | 2026 | 2025 | 2026 | 2025 | | Revenue(1) | 124,113 | 91,639 | 212,550 | 130,575 | | Royalties | (21,248) | (11,795) | (32,453) | (16,568) | | Operating expenses | (32,675) | (28,033) | (62,813) | (40,250) | | Transportation expenses | (1,816) | (1,311) | (3,333) | (2,246) | | Operating income | 68,374 | 50,500 | 113,951 | 71,511 | | | | | | | | Sales volume (Mboe) | 1,698.4 | 1,856.5 | 3,348.7 | 2,673.4 | | Per boe | | | | | | Revenue(1) | 73.08 | 49.36 | 63.47 | 48.84 | | Royalties | (12.51) | (6.35) | (9.69) | (6.20) | | Operating expenses | (19.24) | (15.10) | (18.76) | (15.06) | | Transportation expenses | (1.07) | (0.71) | (1.00) | (0.84) | | Operating netback per boe | 40.26 | 27.20 | 34.02 | 26.74 | | Operating income profit margin | 55 % | 55 % | 54 % | 55 % |

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.