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

2025-08-14

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

Canada NewsWire

CALGARY, AB , Aug. 13, 2025 /CNW/ - InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (" InPlay " or the " Company ") announces its financial and operating results for the three and six months ended June 30, 2025 which is our first quarter following the April 7, 2025 closing date of the strategic acquisition of Cardium focused light oil assets in the Pembina area of Alberta (the " Acquisition "). InPlay's condensed unaudited interim financial statements and notes, as well as its Management's Discussion and Analysis ("MD&A") for the three and six months ended June 30, 2025 will be available at " www.sedarplus.ca " and on our website at " www.inplayoil.com ". An updated corporate presentation is available on our website.

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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. With a longer reserve life and an expanded inventory of high quality drilling locations, the combined Company is well positioned to generate strong free adjusted funds flow ("FAFF") (3) for many years to come.

InPlay is off to a very strong start with second quarter production exceeding expectations by approximately 1,000 boe/d. This outperformance was driven by base production performing above expectations and seven (7.0 net) wells brought onstream in March significantly outperforming our type curves by ~135% on average based on the first 120 days of initial production ("IP"). Notably, three wells brought onstream in March ranked among the top ten Cardium producers in April with two of them holding the number one and two spots in April and May, and ranking second and third in June. These wells achieved payout in under 90 days in a US$60 WTI pricing environment. As a result of this outperformance, current production based on field estimates remains at 19,400 boe/d even though no new wells have been brought on since March. We now expect 2025 average production to be at the upper end of our guidance range. In addition, strong capital efficiencies are expected to result in capital spending landing in the lower half of our previously announced capital budget of $53 – $60 million . The Company continues to prioritize free cash flow generation to be used for debt reduction and the continued return of capital to shareholders through our monthly dividend.

Another exciting development is the recent announcement that Delek Group Ltd. ("Delek") has become a 32.7% strategically aligned shareholder of InPlay. Delek brings a proven track record of value creation in the energy sector. They hold a 45% working interest in the largest natural gas field in the Mediterranean, with an estimated 23 TCF of recoverable natural gas. Additionally, Delek has been instrumental in the growth of Ithaca Energy plc, where they hold a 52% equity stake and have overseen production growth from 30,000 boe/d to over 120,000 boe/d since 2019.

For the remainder of 2025, InPlay plans to drill 5.0 – 5.5 net Cardium wells in Pembina. InPlay's second half drilling campaign recently commenced in August, with the spudding of a three well pad which are in close proximity to the Company's top producing Cardium wells and are expected to be on production near the beginning of October. The application of InPlay's drilling and completion techniques to the acquired assets is expected to drive continued strong performance from new wells with additional capital directed to facility upgrades, optimization and required infrastructure projects.

InPlay will continue to be disciplined and timely in capital spending in the current commodity price environment, maintaining a focus on strong FAFF, debt reduction, per share growth and continuation of our return to shareholder strategy. To further enhance stability and mitigate risk, the Company has secured commodity hedges extending through 2025 and into 2026. InPlay has hedged over 70% of natural gas production and approximately 60% of light crude oil production for the second half of 2025.

Second Quarter 2025 Highlights

Successfully closed the strategic acquisition of Cardium focused light oil assets at highly accretive metrics, enhancing FAFF by 65% on a per share basis, expanding our drilling inventory to over 400 locations, lowering our corporate base decline rate to 24% and strengthening dividend sustainability (2025 forecasted FAFF equal to 2.5 times base dividend). Achieved average quarterly production of 20,401 boe/d (1) (62% light crude oil and NGLs), a 125% increase from Q1 2025, including a 13% increase to light crude oil and liquids weighting to 62% from 55% and a 35% increase in light oil weighting to 51% from 38% in the first quarter of 2025 with oil being the main driver behind our netbacks. Generated strong quarterly Adjusted Funds Flow ("AFF") (2) of $40.1 million ( $1.49 per basic share (3) ). Achieved significant FAFF of $35.5 million ( $1.32 per basic share (3) ) allowing the Company to reduce net debt by approximately $26 million , more than originally forecasted, resulting in a quarterly annualized net debt to earnings before interest, taxes and depreciation ("EBITDA") (3) ratio of 1.2 times. Realized operating income of $50.5 million (3) , an increase of 140% compared to Q1 2025 leading to a strong operating income profit margin (3) of 55%, up from 54% in Q1 2025. Improved field operating netbacks (3) to $27.20 /boe, a 6% increase compared to Q1 2025 despite an 11% decrease to WTI pricing (13% decrease to realized crude oil pricing) and a 22% decrease in AECO natural gas pricing compared to Q1 2025. Returned $7.9 million to shareholders via monthly dividends, representing a 10% yield relative to the current share price. Since November 2022 , InPlay has distributed $52 million in dividends (including dividends declared to date in the third quarter).

Second Quarter 2025 Financial & Operations Overview:

InPlay's second quarter results exceeded expectations and marked the first reporting period incorporating the recently acquired assets, with pro forma operations effective April 8, 2025 . Due to the outstanding efforts of our team and InPlay's strong knowledge and focus in the area, the acquired assets were seamlessly integrated with no disruption to the Company's ongoing operations.

Quarterly production averaged 20,401 boe/d (1) (62% light crude oil and NGLs) which was approximately 1,000 boe/d above internal forecasts. Base production exceeded expectations, and the seven (7.0 net) wells drilled on the combined assets in the first quarter significantly outperformed internal forecasts by approximately 135% (based on IP 120) as highlighted in the table below.

| | 02-25 Pad (per well average) | 14-33 Pad (per well average) | 08-01 Pad (per well average) | | | | | | boe/d | Oil and NGLs % | boe/d | Oil and NGLs % | boe/d | Oil and NGLs % | | IP 30 | 887 | 88 % | 680 | 75 % | 265 | 89 % | | IP 60 | 937 | 87 % | 493 | 66 % | 290 | 87 % | | IP 90 | 922 | 85 % | 569 | 63 % | 288 | 86 % | | IP 120 | 892 | 85 % | 430 | 60 % | 285 | 83 % | | IP 150 | N/A | N/A | 487 | 58 % | 275 | 82 % | | Current | 791 | 82 % | 299 | 44 % | 217 | 77 % | | | >300% above type curve | >75% above type curve | >25% above type curve | | | |

InPlay generated AFF of $40.1 million ( $1.49 per basic share) a 138% increase from the first quarter of 2025. Limited capital spending in the second quarter of $4.6 million , resulted in $35.5 million of FAFF ( $1.32 per basic share), highlighting the strong FAFF generation of the combined Company. These strong results were achieved despite an 11% decrease to WTI pricing (13% decrease to realized crude oil pricing) and a 22% decrease in AECO natural gas pricing compared to Q1 2025. The Company paid $7.9 million ( $12.0 million in the first half of 2025) in dividends during the quarter.

During the quarter InPlay generated a net loss of $3.2 million . After excluding one-time transaction costs and the impact of unrealized mark-to-market hedging gains/losses, InPlay generated adjusted net income (3) of $2.0 million ( $0.08 per basic share) in the quarter.

Strong results had net debt levels at the end of the quarter at $223 million , $5 million lower than originally anticipated. The quarterly annualized net debt to EBITDA ratio for the second quarter of 1.2x is evidence that our post-Acquisition accelerated debt reduction goals are well on track.

Operating synergies and stronger production allowed InPlay to maintain operating costs per boe in the second quarter in line with pre-acquisition levels and synergies have started to show a reduction in G&A cost per boe.

Financial and Operating Results:

| (CDN) ($000's) | Three months ended June 30 | Six months ended June 30 | | | | | 2025 | 2024 | 2025 | 2024 | | Financial | | | | | | Oil and natural gas sales | 91.6 | 41.5 | 130.6 | 79.5 | | Adjusted funds flow (2) | 40.1 | 20.1 | 56.9 | 36.7 | | Per share – basic (3)(5) | 1.49 | 1.34 | 2.71 | 2.44 | | Per share – diluted (3) (5) | 1.49 | 1.30 | 2.71 | 2.36 | | Per boe (3) | 21.59 | 25.57 | 21.27 | 23.34 | | Comprehensive income (loss) | (3.2) | 5.4 | (6.1) | 7.1 | | Per share – basic (5) | (0.12) | 0.36 | (0.29) | 0.47 | | Per share – diluted (5) | (0.12) | 0.35 | (0.29) | 0.46 | | Dividends | 7.9 | 4.1 | 12.0 | 8.2 | | Per share | 0.09 | 0.09 | 0.09 | 0.09 | | Capital expenditures – PP&E and E&E | 4.6 | 6.2 | 18.5 | 31.7 | | Property acquisitions (dispositions) | 293.3 | - | 293.6 | (0.0) | | Net debt (2) | (223.2) | (50.8) | (223.2) | (50.8) | | Shares outstanding (5) | 27.8 | 15.0 | 27.8 | 15.0 | | Basic weighted-average shares (5) | 26.9 | 15.0 | 21.0 | 15.0 | | Diluted weighted-average shares (5) | 26.9 | 15.5 | 21.0 | 15.5 | | Operational | | | | | | Daily production volumes | | | | | | Light and medium crude oil (bbls/d) | 10,328 | 3,671 | 6,898 | 3,561 | | Natural gas liquids (boe/d) | 2,401 | 1,438 | 1,989 | 1,462 | | Conventional natural gas (Mcf/d) | 46,029 | 21,291 | 35,300 | 21,645 | | Total (boe/d) | 20,401 | 8,657 | 14,770 | 8,631 | | Realized prices (3) | | | | | | Light and medium crude oil & NGLs ($/bbls) | 75.13 | 83.24 | 72.50 | 78.07 | | Conventional natural gas ($/Mcf) | 1.83 | 1.43 | 2.00 | 2.05 | | Total ($/boe) | 49.36 | 52.63 | 48.84 | 50.58 | | Operating netbacks ($/boe) (4) | | | | | | Oil and natural gas sales | 49.36 | 52.63 | 48.84 | 50.58 | | Royalties | (6.35) | (6.43) | (6.20) | (6.10) | | Transportation expense | (0.71) | (0.98) | (0.84) | (1.04) | | Operating costs | (15.10) | (14.81) | (15.06) | (15.09) | | Operating netback (4) | 27.20 | 30.41 | 26.74 | 28.35 | | Realized gain (loss) on derivative contracts | (0.20) | 0.25 | (0.12) | 0.27 | | Operating netback (including realized derivative contracts) (4) | 27.00 | 30.66 | 26.62 | 28.62 |

On behalf of the entire InPlay team and our Board of Directors, we thank our shareholders for their ongoing support as we execute our strategy of disciplined growth, reliable returns, and long-term value creation. We would like to send a special thanks to our employees for their significant effort in enabling a smooth integration of the new assets. We are very optimistic about building on the momentum from our strategic Acquisition that has transformed the future of the Company.

| 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. | 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. | | 4. | Supplementary measure. See "Non-GAAP and Other Financial Measures" contained within this press release. | | 5. | 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. |

For further information please contact:

| Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632 | | Darren Dittmer Chief Financial Officer InPlay Oil Corp. Telephone: (587) 955-0634 |

Reader Advisories

Hedging Summary

| | Q3/25 | Q4/25 | Q1/26 | Q2/26 | Q3/26 | Q4/26 | Q1/27 | | | | | | | | | | | | | | | Natural Gas AECO Swap (mcf/d) | 17,060 | 15,800 | 15,165 | 14,215 | 14,215 | 8,560 | 4,265 | | | | Hedged price ($AECO/mcf) | $2.30 | $2.65 | $2.85 | $3.00 | $3.00 | $3.05 | $3.65 | | | | | | | | | | | | | | | Natural Gas AECO Costless Collar (mcf/d) | 13,270 | 12,640 | 12,320 | 11,375 | 11,375 | 16,400 | 18,950 | | | | Hedged price ($AECO/mcf) | $2.10 - $3.20 | $2.20 - $3.40 | $2.25 - $3.50 | $2.45 - $3.50 | $2.45 - $3.50 | $2.80 - $4.40 | $2.90 - $4.85 | | | | | | | | | | | | | | | | | | | | | | | | | | Crude Oil WTI Swap (bbl/d) | 3,250 | 2,500 | 3,750 | 2,000 | 2,000 | 2,000 | 2,000 | | | | Hedged price ($USD WTI/bbl) | $62.50 | $62.20 | $60.30 | $60.90 | $60.90 | $61.05 | $61.05 | | | | Crude Oil WTI Costless Collar (bbl/d) | 1,300 | 1,300 | - | - | - | - | - | | | | Hedged price ($USD WTI/bbl) | $55.00 - $59.35 | $55.00 - $59.35 | - | - | - | - | - | | | | | | | | | | | | | | | Crude Oil WTI Three-way Collar (bbl/d) | 1,300 | 1,300 | - | - | - | - | - | | | | Low sold put price ($USD WTI/bbl) | $59.50 | $59.50 | - | - | - | - | - | | | | Mid bought put price ($USD WTI/bbl) | $67.50 | $67.50 | - | - | - | - | - | | | | High sold call price ($USD WTI/bbl) | $83.00 | $83.00 | - | - | - | - | - | | | | | | | | | | | | | | | Electricity AESO Swap (kW) | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | 1,000 | | | | Hedged price ($kWh) | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 | $0.06217 | | | | | | | | | | | | | |

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 per share

Management considers FAFF and FAFF per share 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 that can be used for additional capital activity, corporate acquisitions, repayment of debt or decommissioning expenditures or potentially return of capital to shareholders. FAFF per share is calculated by the Company as FAFF divided by weighted average shares outstanding. Refer below for a calculation of Free Adjusted Funds Flow and FAFF per share. Refer to the "Forward Looking Information and Statements" section for a calculation of forecast FAFF and FAFF per share.

| (thousands of dollars) | Three Months Ended

June 30 | Six Months Ended

June 30 | | | | | 2025 | 2024 | 2025 | 2024 | | Adjusted funds flow | 40,080 | 20,145 | 56,863 | 36,671 | | Exploration and dev. capital expenditures | 4,613 | 6,156 | 18,500 | 31,687 | | Property acquisitions (dispositions) | - | - | 343 | (25) | | Free adjusted funds flow | 35,467 | 13,989 | 38,020 | 5,009 | | Weighted average number of common shares (basic) | 26,903 | 15,020 | 21,007 | 15,026 | | FAFF per share | 1.32 | 0.93 | 1.81 | 0.33 | | | | | | |

Free Adjusted Funds Flow Yield

InPlay uses "free adjusted funds flow yield" as a key performance indicator. When presented on a corporate basis, free adjusted funds flow is calculated by the Company as free adjusted funds flow divided by the market capitalization of the Company. When presented on an asset basis for acquisition purposes, free adjusted funds flow is calculated by the Company as free adjusted funds flow divided by the operating income of the Acquired Assets. Management considers FAFF yield to be an important performance indicator as it demonstrates a Company or asset's ability to generate cash to pay down debt and provide funds for potential distributions to shareholders. Refer to the "Forward Looking Information and Statements" section for a calculation of forecast 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.