International Petroleum Corp. ("IPC") (TSX, Nasdaq Stockholm: IPCO) is
pleased to announce the closing of the previously announced acquisition
of Granite Oil Corp. ("Granite") (TSX:GXO; OTCQX:GXOCF) (the
"Acquisition"). The Acquisition includes total proved plus probable
("2P") reserves of 14.0 million barrels of oil equivalent (MMboe) and
6.2 MMboe of unrisked contingent resources (best estimate) as at
December 31, 2019.
The Acquisition is comprised of high netback, light oil producing assets
in southern Alberta (the "Assets"). The Assets include existing
infrastructure to enable the current gas injection enhanced oil recovery
(EOR) scheme, with capacity to allow for potential further field
development opportunities. The Assets also include associated oil and
gas processing and injection facilities located in proximity to key
sales points.
Under the terms of the Acquisition, IPC acquired all of the issued and
outstanding common shares of Granite ("Granite Shares") for
consideration of approximately USD 27 million (CAD 37.1 million) and IPC
assumed Granite's net debt of approximately USD 30 million (CAD 40
million). Each former Granite shareholder is entitled to receive CAD
0.95 for each Granite Share held prior to the Acquisition (the "Cash
Consideration").
The Granite Shares are expected to be delisted from the Toronto Stock
Exchange and the OTCQX on or around March 10, 2020.
Pursuant to the letter of transmittal mailed to Granite shareholders in
connection with the special meeting of Granite shareholders held on
March 5, 2020, in order to receive the Cash Consideration, registered
holders of Granite Shares are required to deposit a duly completed the
letter of transmittal together with their share certificates, with
Computershare Trust Company of Canada. Shareholders whose Granite Shares
are registered in the name of a broker, dealer, bank, trust company or
other nominee should contact their nominee with questions regarding
receipt of the Cash Consideration.
International Petroleum Corp. (IPC) is an international oil and gas
exploration and production company with a high quality portfolio of
assets located in Canada, Malaysia and France, providing a solid
foundation for organic and inorganic growth. IPC is a member of the
Lundin Group of Companies. IPC is incorporated in Canada and IPC's
shares are listed on the Toronto Stock Exchange (TSX) and the Nasdaq
Stockholm exchange under the symbol "IPCO".
For further information, please contact:
Rebecca Gordon Robert Eriksson
VP Corporate Planning and Investor Relations Media Manager
rebecca.gordon@international-petroleum.com reriksson@rive6.ch
Tel: +41 22 595 10 50 Tel: +46 701 11 26 15
The information was submitted for publication, through the contact
persons set out above, at 08:30 CET on March 6, 2020.
Forward-Looking Statements
This press release contains statements and information which constitute
"forward-looking statements" or "forward-looking information" (within
the meaning of applicable securities legislation). Such statements and
information (together, "forward-looking statements") relate to future
events, including IPC's performance, business prospects or
opportunities. Actual results may differ materially from those expressed
or implied by forward-looking statements. The forward-looking statements
contained in this press release are expressly qualified by this
cautionary statement. Forward-looking statements speak only as of the
date of this press release, unless otherwise indicated. IPC does not
intend, and does not assume any obligation, to update these
forward-looking statements, except as required by applicable laws.
All statements other than statements of historical fact may be
forward-looking statements. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans,
projections, forecasts, guidance, budgets, objectives, assumptions or
future events or performance (often, but not always, using words or
phrases such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "forecast", "predict", "potential",
"targeting", "intend", "could", "might", "should", "believe", "budget"
and similar expressions) are not statements of historical fact and may
be "forward-looking statements". Forward-looking statements include, but
are not limited to, statements with respect to: the expected timing of
which the Granite Shares will be de-listed from the TSX and OTCQX; the
ability of IPC to achieve and maintain current and forecast production
and take advantage of production growth and development upside
opportunities related to the Assets post-completion of the Acquisition;
the ability of IPC to integrate the Assets into its current operations;
the ability of existing infrastructure to enable EOR projects, as well
as capacity to allow for potential further field development
opportunities; the existence of drill-ready opportunities and their
ability to add further near-term production of high netback, light oil
barrels; estimates of reserves; estimates of contingent resources; the
ability to generate free cash flows; and future drilling and other
exploration and development activities. Statements relating to
"reserves" and "contingent resources" are also deemed to be
forward-looking statements, as they involve the implied assessment,
based on certain estimates and assumptions, that the reserves and
resources described exist in the quantities predicted or estimated and
that the reserves and resources can be profitably produced in the
future. Ultimate recovery of reserves or resources is based on forecasts
of future results, estimates of amounts not yet determinable and
assumptions of management.
The forward-looking statements are based on certain key expectations and
assumptions made by IPC, including expectations and assumptions
concerning: prevailing commodity prices and currency exchange rates;
applicable royalty rates and tax laws; interest rates; future well
production rates and reserve and contingent resource volumes; operating
costs; the timing of receipt of regulatory approvals; the performance of
existing wells; the success obtained in drilling new wells; anticipated
timing and results of capital expenditures; the sufficiency of budgeted
capital expenditures in carrying out planned activities; the timing,
location and extent of future drilling operations; the successful
completion of acquisitions and dispositions; the benefits of
acquisitions; the state of the economy and the exploration and
production business in the jurisdictions in which IPC operates and
globally; the availability and cost of financing, labour and services;
and the ability to market crude oil, natural gas and natural gas liquids
successfully.
Although IPC believes that the expectations and assumptions on which
such forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because IPC
cannot give assurances that they will prove to be correct. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated due to
a number of factors and risks. These include, but are not limited to:
the risks associated with the oil and gas industry in general such as
operational risks in development, exploration and production; delays or
changes in plans with respect to exploration or development projects or
capital expenditures; the uncertainty of estimates and projections
relating to reserves, resources, production, revenues, costs and
expenses; health, safety and environmental risks; commodity price and
exchange rate fluctuations; interest rate fluctuations; marketing and
transportation; loss of markets; environmental risks; competition;
incorrect assessment of the value of acquisitions; failure to complete
or realize the anticipated benefits of acquisitions or dispositions; the
ability to access sufficient capital from internal and external sources;
failure to obtain required regulatory and other approvals; and changes
in legislation, including but not limited to tax laws, royalties and
environmental regulations. Readers are cautioned that the foregoing list
of factors is not exhaustive.
Additional information on these and other factors that could affect IPC,
or its operations or financial results, are included in the management
discussion and analysis for the year ended December 31, 2019 (MD&A) (See
"Cautionary Statement Regarding Forward-Looking Information" therein),
the Corporation's Annual Information Form (AIF) for the year ended
December 31, 2018 (See "Cautionary Statement Regarding Forward-Looking
Information", "Reserves and Resources Advisory" and "Risk Factors"
therein) and other reports on file with applicable securities regulatory
authorities, which may be accessed through the SEDAR website
(www.sedar.com) or IPC's website (www.international-petroleum.com).
Disclosure of Oil and Gas Information
This press release contains references to estimates of gross 2P reserves
of IPC's oil and gas assets. Gross reserves are the total working
interest reserves before the deduction of any royalties and including
any royalty interests receivable.
Reserve estimates, contingent resource estimates and estimates of future
net revenue in respect of IPC's oil and gas assets acquired in the
Acquisition are effective as of December 31, 2019, and are included in
reports prepared by Sproule Associates Limited (Sproule), an independent
qualified reserves evaluator, in accordance with National Instrument
51-101 -- Standards of Disclosure for Oil and Gas Activities (NI 51-101)
and the Canadian Oil and Gas Evaluation Handbook (the COGE Handbook) and
using Sproule's December 31, 2019, price forecasts.
The price forecasts used in the reserve reports are as at December 31,
2019 and are available on the website of Sproule (sproule.com).
"2P reserves" means gross proved plus probable reserves. "Proved
reserves" are those reserves that can be estimated with a high degree of
certainty to be recoverable. It is likely that the actual remaining
quantities recovered will exceed the estimated proved reserves.
"Probable reserves" are those additional reserves that are less certain
to be recovered than proved reserves. It is equally likely that the
actual remaining quantities recovered will be greater or less than the
sum of the estimated proved plus probable reserves.
Contingent resources are those quantities of petroleum estimated, as of
a given date, to be potentially recoverable from known accumulations
using established technology or technology under development, but which
are not currently considered to be commercially recoverable due to one
or more contingencies. Contingencies are conditions that must be
satisfied for a portion of contingent resources to be classified as
reserves that are: (a) specific to the project being evaluated; and (b)
expected to be resolved within a reasonable timeframe. Contingencies may
include factors such as economic, legal, environmental, political, and
regulatory matters, or a lack of markets. It is also appropriate to
classify as contingent resources the estimated discovered recoverable
quantities associated with a project in the early evaluation stage.
Contingent resources are further classified in accordance with the level
of certainty associated with the estimates and may be sub-classified
based on a project maturity and/or characterized by their economic
status.
There are three classifications of contingent resources: low estimate,
best estimate and high estimate. Best estimate is a classification of
estimated resources described in the COGE Handbook as being considered
to be the best estimate of the quantity that will be actually recovered.
It is equally likely that the actual remaining quantities recovered will
be greater or less than the best estimate. If probabilistic methods are
used, there should be at least a 50% probability that the quantities
actually recovered will equal or exceed the best estimate.
Contingent resources are further classified based on project maturity.
The project maturity subclasses include development pending, development
on hold, development unclarified and development not viable. All of the
contingent resources acquired in the Acquisition are classified as
development unclarified. Development unclarified is defined as a
contingent resource that requires further appraisal to clarify the
potential for development and has been assigned a lower chance of
development until contingencies can be clearly defined. Chance of
development is the probability of a project being commercially viable.
References to "unrisked" contingent resources volumes means that the
reported volumes of contingent resources have not been risked (or
adjusted) based on the chance of commerciality of such resources. In
accordance with the COGE Handbook for contingent resources, the chance
of commerciality is solely based on the chance of development based on
all contingencies required for the re-classification of the contingent
resources as reserves being resolved. Therefore unrisked reported
volumes of contingent resources do not reflect the risking (or
adjustment) of such volumes based on the chance of development of such
resources. Chance of development is the probability of a project being
commercially viable and the chance of development risk of 70% has been
applied by IPC to all of the contingent resources acquired in the
Acquisition. The risked contingent resources (best estimate) as at
December 31, 2019 is 4.3 MMboe. The contingency for all of the unrisked
best estimate contingent resources is IPC's corporate commitment whether
to proceed with the specific opportunities.
The contingent resources reported in this press release are estimates
only. The estimates are based upon a number of factors and assumptions
each of which contains estimation error which could result in future
revisions of the estimates as more technical and commercial information
becomes available. The estimation factors include, but are not limited
to, the mapped extent of the oil and gas accumulations, geologic
characteristics of the reservoirs, and dynamic reservoir performance.
There are numerous risks and uncertainties associated with recovery of
such resources, including many factors beyond the Corporation's control.
There is uncertainty that it will be commercially viable to produce any
portion of the contingent resources referred to in this press release.
2P reserves and contingent resources have been aggregated in this press
release by IPC. Estimates of reserves and future net revenue for
individual properties may not reflect the same level of confidence as
estimates of reserves and future net revenue for all properties, due to
aggregation. There is no assurance that the forecast prices and cost
assumptions used in the reserve evaluations will be attained and
variances could be material.
BOEs may be misleading, particularly if used in isolation. A BOE
conversion ratio of 6 thousand cubic feet (Mcf) per 1 barrel (bbl) is
based on an energy equivalency conversion method primarily applicable at
the burner tip and does not represent a value equivalency at the
wellhead. As the value ratio between natural gas and crude oil based on
the current prices of natural gas and crude oil is significantly
different from the energy equivalency of 6:1, utilizing a 6:1 conversion
basis may be misleading as an indication of value.
Currency
All dollar amounts in this press release are expressed in United States
dollars, except where otherwise noted. References herein to USD mean
United States dollars. References herein to CAD mean Canadian dollars.
Attachment
-- IPC PR V5 Granite closing 06-03-2020
https://ml-eu.globenewswire.com/Resource/Download/f66a152a-fc61-4c84-9c7a-3b240bb786ab
(END) Dow Jones Newswires
March 06, 2020 02:30 ET (07:30 GMT)
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