International Petroleum Corp. Announces Completion of Acquisition of Light Oil Assets in Southern Alberta

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 
 [e-mail]       [e-mail] 
 Tel: [phone]                            Tel: [phone] 
 
 
 
   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)