International Ptrl Q3 2026 Earnings Call Transcript

International Ptrl (TSX:IPCO) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://ipc.videosync.fi/2026-11-03

Summary

International Ptrl’s Q3 production met forecasts at 44,000 barrels of oil equivalent per day, maintaining full-year guidance for 2026 at 44 to 47,000 barrels per day.

Operating costs per unit were $21 in Q3, with full-year guidance for 2026 remaining at $18 to $20. Capital expenditure for 2026 increased to $185 million, driven by additional projects at Canadian thermal assets.

Q3 operating cash flow was $79 million, with a full-year 2026 forecast of $275 to $350 million, assuming Brent prices of $80 to $110 per barrel. Free cash flow rose materially to $27 million in Q3, with full-year guidance adjusted to $35 to $110 million.

Net debt reduced by approximately 10% from Q2 to Q3, now at $473 million, with access to $200 million in liquidity. The company remains unhedged on Brent and WTI prices but has some differential hedges for WTI and WCS.

1.3 million shares were repurchased under the current NCIB program, with plans to renew it in December.

The Blackrod Phase 1 project is progressing well, with production exceeding 10,000 barrels per day and expected to reach 30,000 barrels by the end of 2027.

International Ptrl completed a non-core asset sale, gaining C$62 million, and has a strong M&A track record with no geographical restrictions for future opportunities. Management highlighted the potential for further growth through Blackrod and the positive impact of high oil prices on cash flow.

Full Transcript

William Lundin (Chief Executive Officer)

Hello and welcome everyone to International Ptrl’s third quarter results update presentation. I’m William Lundin, the President and CEO, and here today with Christoph Nergararian, our CFO, as well as Rebecca Gordon, our SVP of Corporate Planning and Investor Relations. I’ll start with the highlights and touch on an operational update per region. Then Christoph will expand on the financial highlights for the quarter. After the presentation we’ll take questions, which can be submitted from those tuned in through conference call or online via the web.

So starting with the highlights, our Q3 production was in line with forecast at 44,000 barrels of oil equivalent per day, and our full-year guidance for 2026 is maintained and unchanged at 44 to 47,000 barrels of oil equivalent per day. Operating costs per unit of production settled in at $21 for the period in Q3, and our full-year OpEx is also maintained at $18 to $20 for 2026. On the heels of successfully delivering the Blackrod Phase 1 project, we’re very pleased to see steadily growing production from this asset, with nameplate production of 30,000 barrels of oil equivalent per day expected by the end of 2027.

Capital expenditure guidance has been upped to $185 million for 2026, mainly due to the sanctioning of additional projects at our thermal assets in Canada, which I’ll elaborate on in the subsequent slides. The company generated strong operating cash flow for Q3 at US$79 million, and the rest-of-the-year outlook has been updated to reflect the higher pricing environment. 2026 full-year operating cash flow forecast is at $275 to $350 million, assuming $80 to $110 per barrel Brent for the remainder of the year.

Free cash flow was up materially for Q3 relative to the prior quarter. Notwithstanding the added capital, we generated $27 million in free cash flow in Q3, and our full-year free cash flow guidance is amended to $35 to $110 million. Our net debt saw a good step down from the prior quarter, currently standing at $473 million in net debt at the end of September, so leverage in the form of net debt to EBITDA has reduced by approximately 10% from Q2 to Q3.

We have access to around $200 million of liquidity availability through our Canadian bank syndicate. A non-core asset sale took place in the quarter, and we’re pleased with that valuation, representing a net book gain of C$62 million. IPC benefited from being fully exposed to Brent and WTI prices for the third quarter and remain unhedged going forward with respect to those benchmark oil prices. There are some differential hedges in place for the rest of 2026 between WTI and WCS and also into 2027.

Christoph will provide more detail on that in his section of the presentation. We’ve repurchased 1.3 million shares under this NCIB program, and we have the intention to renew the next NCIB program in December. Moving on to the production and operating cost guidance, as can be seen on the production chart at the bottom of this slide, we have a great track record of delivering within guidance, and we remain confident to do so for the full year 2026. Noting the full-year average of 44 to 47,000 barrels of oil equivalent per day is a full-year average, the first three quarters were in line with guidance for those reporting periods, and we’re thrilled to see the higher production quarterly average come through Q4, which will pull our overall production guidance within the range for the year.

As Blackrod ramps up, our weighting towards oil will increase relative to the current production mix average for 2026, which of course should translate into higher cash flow generation in the future. It’s really been an amazing evolution of oil prices throughout this year, which has translated into increased operating cash flow for the company compared to the opening-year Capital Markets Day OCF guidance. US$214 million is the year-to-date operating cash flow as at the end of September, with a sizable range for the rest of the year between $275 to $350 million and only a couple months left to the end of 2026. This demonstrates the torque IPC has to higher commodity prices.

For the low case for the rest of the year, we assume a Brent price of $80 with a Brent-to-WTI differential of $5; WTI-to-WCS differential of $22 for the quarter, noting October was already set in the mid to high teens, and for November and December we assume a $25 differential from WTI to WCS. For the high case of Brent, we are assuming $110 per barrel with a Brent-WTI differential slightly wider at $10 a barrel and the same assumption on the differential for WCS to WTI.

In light of the high oil commodity pricing environment, as well as taking advantage of our operatorship as we’ve done in the past, we’ve added some incremental projects to our 2026 capital expenditure program, raising the full-year aggregate capital spend from the prior forecast level of $163 million to $185 million inclusive of decommission spend. On the international side, we completed the drilling campaign in France, and in Canada we completed some capital activity at our properties in Southern Alberta.

Two infill wells at Onion Lake Thermal were recently drilled, and we expect those to be tied in at the end of the year, with the production contribution to come in at the end of the year and into the new year as well. Additional resource maturation works at Blackrod have also been included as we look to grow the bookable volumes at this asset. That activity will also commence at the end of this year and follow into 2027. Year-to-date free cash flow is a positive $14 million USD, with year-to-date prices of $94 Brent and a differential from Brent to WTI of $10 and between WTI and WCS of $14 as shown in the brackets, and the full-year free cash flow is estimated at $35 to $110 million USD for the rest of 2026. Very pleased to be returning to positive free cash flow generation as we inflect from the building out of Blackrod Phase 1 to production ramp-up in harvest mode.

Since the company’s formation as International Ptrl in 2017, IPC has repurchased in aggregate 78 million shares at a fraction of our current share price. When comparing the average repurchase price of all those shares compared to our current share price, that represents in excess of US$1.3 billion in value created. We’ve repurchased again 1.3 million shares under the 2526 NCIB program, and we intend to renew the next program in the beginning of December.

As we grow production and cash flow, we believe the compounding effect from share buybacks is an attractive form of shareholder returns. We’re laser focused on maximizing our per-share metrics, and we look forward to updating this slide in the new year when our production figure has a six handle in front of it as a result of the anticipated growth in production. So, Blackrod. As previously announced, the Phase 1 project was delivered ahead of schedule and on budget. The team are doing an excellent job at site managing the climbing throughput through the state-of-the-art central processing facility. Current spot rates, as shown on the production graph below, are in excess of 10,000 barrels per day, with 12 well pairs that were online at the end of Q3 and around 18 well pairs online now as we speak. We’re maintaining the guidance of plateau production rates of 30,000 barrels of oil per day expected to be achieved by end 2027.

The map on the right shows the pad drainage patterns, with the denoted drilled wells contributing to the initial production volumes. To recap, these are 1,400-meter-long horizontal wells with 50-meter well spacing, so a significant amount of drainage points, and we’re seeing solid conformance thus far. Further to the Phase 1 progress at Blackrod, we announced some additional resource maturation works to commence at the end of 2026 and continue into early 2027.

This will support additional resource conversion to reserves towards the northeast area of this field. With the heightened M&A activity around SAGD assets in Canada along with the exciting fiscal term improvements and enhancements, the backdrop for Blackrod and IPC has never been better as we look to grow Phase 1 and beyond. As a recap, we have 100% working interest and 100% ownership of Blackrod, which has total recoverable volumes of over 1.4 billion barrels inclusive of 2P plus 2C volumes.

We have regulatory approval to produce up to 80,000 barrels of oil per day. Phase 1 targets 30,000 barrels of oil per day. The Blackrod reservoir is a massive, uniform sandstone that’s very homogeneous—no vertical baffles or barriers. It’s predictable, scalable, and very much repeatable. We’re super excited to unlock this transformational asset. Onion Lake Thermal production for the third quarter was in line with the guidance for the period at this asset. We did drill a couple more infill wells during the quarter, as can be seen on the graphic to the right, and we expect those to contribute closer to the end of this year and into the beginning of 2027 when they’re put on stream. Moving to the Suffield area assets, which continue to deliver really stable production, we stand to benefit from the four production wells that we recently drilled in the Brooks area, just adjacent to the Suffield block within the Suffield area, and early indications look very positive.

Internationally, France and Malaysia have been exposed to extremely strong Brent pricing year to date. Notably, it’s been a record premium year for Bertam, and in France we recently completed four sidetracks with positive results. As we can see, the first well that was drilled is delivering strong rates of around 500 barrels of oil per day, as can be seen in the bottom right production plot. That well is close to a kilometer-long horizontal drain; it’s one of the longer horizontal wells in the basin. We’re very pleased to see this production response in the fab field that didn’t have any horizontal producers within this field previously, so pleased with that. So with that, I will hand it over to Christoph to expand on the financial highlights for the quarter.

Christoph

Thank you very much, Will. Good morning, everyone. So indeed a very good quarter, both from an operational performance front and supported by very high oil prices. So production during this quarter was 44,000 barrels of oil equivalent per day, 43 year to date on average, and during that third quarter we saw the oil prices rebound very significantly in September, with dated Brent averaging close to $97 per barrel during this quarter. We are maintaining the guidance for operating cost per barrel of oil equivalent for the whole year.

They were a bit higher during this quarter due to some workovers, in fact bringing the first production on stream at Blackrod with some fixed element in the OPEX there. On a unit basis at Blackrod, the costs are a bit higher, but of course they’re going to trend lower and lower as we head into Q4 and subsequently in 2027. So the operating cash flows and EBITDA for the third quarter was in excess of 75… 79, sorry, million dollars, with some capital expenditure at 37. That translated into a very healthy free cash flow for the second quarter in a row at 37. For this, at 27 for this quarter, the net result sits just shy of 60 million US dollars, helped by the positive asset disposal at Mooney, and all of that translated into, i.e., a reduced net debt at the end of the quarter at US$473 million.

Of course you can see here that the realized prices were very strong, especially in Q3. We’ve seen very significant dated Brent premium on top of the ICE Brent, and that meant a very strong realized price in Malaysia when we sold the cargo in September at a very, very high premium to the Brent. Otherwise, in France we’re continuing to sell on parity with Brent, and that goes the same for Suffield and Onion Lake in line with WCS. It’s been a bit patchy, the first sales at Blackrod, but we’ll give you more information when we move into Q4 and 27, and you expect Blackrod to sell on parity with WCS.

Gas prices remained relatively weak, of course, during this third quarter. That includes the months of July and August, which are traditionally, from a seasonal perspective, a bit weak—some weak months from a gas perspective. I think one of the positive elements here for the mid to long term is the new government in British Columbia that has expressed its strong support and willingness to improve the infrastructure between British Columbia and Alberta from a gas pipeline infrastructure perspective, and also the willingness to support the gas industry across those two provinces. So that should bode well for the future gas prices.

If you look at the year-to-date operating cash flow and EBITDA, you can see here that we are, for nine months, the year-to-date numbers were in excess of $200 million, both on the EBITDA and operating cash flow, and posting better results than last year for the comparable period. In terms of operating costs, as I mentioned earlier on, some slightly higher costs during this quarter—that was anticipated with the increased workload in Malaysia and also the first barrels at Blackrod, which are a bit more expensive to produce. But all of this, you can see, is going to improve going into Q4, and we’re expecting the trend of OPEX per barrel reduction to continue moving into 2027. In terms of netback, we can see here a cash margin in excess of $20 per barrel in the third quarter, and operating cash flow and EBITDA just shy of $20—very, very strong cash flow generation during this quarter.

From a liquidity perspective going forward, there was an announcement in Canada called—or so-called—the Mega Deduction, which is a Canada federal measure that is going to allow all companies in Canada to expense 100% of the CapEx spent in Canada from the 15th of September this year. So this is improving the liquidity by allowing us to depreciate 100% of our CapEx in Canada from the 15th of September this year. Looking at the net debt, it’s reduced from the end of 2025 from $484 million down to 473 at the end of September, and you should expect that trend to continue.

Our leverage is around slightly under 1.8 times if you comp debt to our 12 months trailing EBITDA at the end of September, and you should expect that to continue to improve—i.e., reduce—until the end of this year and moving into 2027. Just a comment here: you can see that we’re back to more of a normal stage where our operating cash flow more than covers all of our CapEx, and that liquidity buffer is going to increase further with Q4 and going into 20. You see here the positive impact of our sale of assets with more than $50 million year to date, and we bought back shares for $27 million—so 1.3 million shares which we bought back and canceled, mostly in Q3. Looking at the financial items, that’s very stable quarter to quarter, with around $10 million in bond and revolving credit facility interest—very stable month on month and quarter on quarter.

The G&A remained very stable as well, slightly in excess of $4 million per quarter, or around $1 per barrel of oil equivalent. So the financial results for the first nine months: you can see here close to $600 million of revenues for the first nine months, a cash margin of close to $220 million, gross profit of $128 million, translating into a solid net profit of $83 million for the first nine months. The balance sheet you can see here in big aggregates—you can notice the increased current assets as well as the increased current liabilities. This is really a reflection of increased production and increased value in our production.

So the receivables are very significant at the end of September because we sold cargo in Malaysia, and we’re increasing our sales in Canada with Blackrod. So increased current assets from the future receivables, and the same goes with liabilities with quite important activity still in Canada. The capital structure is very stable. We repaid our French loan in the second quarter. So we’re really left with US$400 million of bonds. The coupon here is 7.5%, and as you may recall, we will have a mandatory $25 million repayment, or amortization, under the bond starting in April 2028—so after plateau—and that will continue every six months. The Canadian RCF, which is roughly a total amount of 250 million US dollars—we had less than $50 million drawn at the end of September, so in excess of US$200 million of liquidity.

In terms of hedges, no new hedges on the oil front, but if you look forward, during the second half of 2026 and the fourth quarter we have some hedges for the differential at minus 12.50, which is going to generate gains again in the fourth quarter. And we also have some transportation differential hedged for around 10,000 barrels at minus 7.50 for 2027. We decided to hedge because the local currencies where we operate—in Canada, France, and in Malaysia—were relatively weak compared to the US dollar, and we’re spending our OPEX in local currencies.

So we decided to hedge for 2027 roughly between 40% and 50% of our OPEX going forward. So with that I will conclude this good quarter.

William Lundin (Chief Executive Officer)

Thanks very much, Christoph. And indeed a strong quarter for the company, and overall here to conclude, production guidance is maintained for 2026 with major growth expected as Blackrod progressively ramps up production. Year to date, production is around 43,000 barrels of oil equivalent per day. We expect a 50% increase to that level in corporate rates by 2028. Of huge resource upside with over half a billion barrels of 2P reserves, in excess of 1.2 billion barrels of 2C resource as certified by an independent reserve auditor at year-end 25.

Strong cash flow in 2026 with a range of 275 to 350 million USD for the year, and a clean balance sheet with good access to liquidity of over $200 million and reducing leverage. Differentiated shareholder returns in the form of buybacks, with a whopping reduction of more than a quarter of our absolute shares outstanding when comparing our current shares outstanding against the amount that was at the beginning of 2022. There’s been major growth in our portfolio that has been achieved through accretive M&A—a total of five acquisitions—and, as previously mentioned, the non-core asset disposal took place in the quarter for gross proceeds of 70 million CAD.

I would like to thank all the members of the Mooney asset team for doing a great job under the IPC tenure and wish you all the best for the new company that the asset has been transferred over to. Mooney had minimal book value assigned upon the business combination with Black Pearl Resources, delivered around $30 million US in free cash flow since 2019, and had a net gain of $45 million, with an effective date sale in May and the transaction closed at the beginning of August.

And on the ESG side, our sustainability report was issued in August, making our seventh successive annual report. So that concludes our presentation, and I’ll pass it now to the operator to initiate our Q&A segment of the presentation.

OPERATOR

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We will now take our first question from Christopher Basquet of Clarksons Securities. Your line is open. Please go ahead.

Christopher Basquet (Analyst)

Good morning, guys. Christopher from Clarksons here, and congratulations on a strong quarter. I have a couple questions today. So first is on the Blackrod ramp-up, and with the production now exceeding 10,000 barrels a day, how is the actual well performance tracking against your initial expectations? And what do you see as the main risk to reaching the 30,000 plateau level by the end of 2027? And as a follow-up on that, and given, of course, the encouraging early results, what are the key milestones you need to see before moving forward with the phase two, and how quickly could the potential development progress?

William Lundin (Chief Executive Officer)

Okay, thanks very much for the questions there, Christopher. So as you noted, the Blackrod production is in excess of 10,000 barrels per day, which I highlighted as well in the presentation. Overall well performance has been fantastic. As we’ve been seeing, each of the well pairs have been contributing in line, if not slightly ahead of their type curve estimates for those well pairs. So that’s been very positive to see and something that we’ve always pounded the table about with this asset: there is a significant amount of delineation and pilot well pair testing prior to making the commercial decision.

To see this translating into fruition in terms of production performance is very, very satisfying. Looking forward to reaching the plateau production rates of 30,000 barrels per day, we don’t see any major risks to getting there beyond standard oilfield risks of ramping the asset up. We’ve got a lot of penetrations, reservoirs performing well. The topsides and facilities are working well. This facility is ultimately designed to handle 30,000 barrels of oil and barrels of steam. As we’re progressively ramping up those levels, it’s all hands on deck between the operator teams to make sure the plant is functioning properly, which we’re pleased to see is the case through the start of operations there.

As we look forward to future phase expansion, as I announced, we are increasing some of the resource maturation work at this asset. We also are carrying out some early engineering studies for the debottlenecking expansion project at the Blackrod Phase 1 asset. And there is further growth optionality to build an entirely new central processing facility at this asset. Having 100% working interest and positive indications on Phase 1 ramping up puts us in a great place overall for planning for that next phase expansion.

As we continue into 2027, we look to see production volumes ramp up as well as cash flow generation, and we’ll be continuing to mature the opportunity set in growth projects and be monitoring commodity prices and our overall balance sheet, which, subject to all of those elements working in the right direction, should put us in a place to make a future phase expansion. At the earliest we would say probably the beginning of 2028, subject to all those elements that I had mentioned.

Christopher Basquet (Analyst)

The last one, if I may, and that’s on M&A. I’m just curious to hear how you’re assessing potential acquisition opportunities in the current market and whether you would prioritize opportunities within your existing core regions or consider expanding into new geographies in that sense.

William Lundin (Chief Executive Officer)

Yeah. On the M&A side of things, we always say, you know, M&A is in our DNA. We are opportunistic and we don’t have any limitations in terms of geographical sandbox that we have to stay strict to. We’re opportunistic at our core and we’re really focused on accretive acquisitions that can maximize value for our shareholders. And so, you know, with us being very long resource and having in excess of 1.2 billion barrels of contingent resource with the lion’s share of that sitting at Blackrod, we’re very much grounded when we’re looking at growing through M&A to ensure that, you know, the opportunity set that we already have within that, we’re not diluting that and doing a transaction for the sake of doing a transaction.

We have been actively involved in several processes in Canada and elsewhere in Southeast Asia this year. None have translated into a successful result, as of course that would have otherwise been made public. But it’s been a remarkable year on the M&A landscape, especially for peers of our similar size. You know, we’ve seen in Canada the Headwater combination with Tamarack Valley. We’ve seen Blue Nord go to Vore Energy, a company based in the North Sea there.

We’ve seen Capricorn also been sold as well, Egypt to DNO. So there’s been a lot of activity and of course notably Athabasca recently went to Synovus who just acquired MEG Energy. So it’s been very active on the M&A landscape and especially as it looked at the oil sands assets in Canada. There’s clearly a scarcity of sizable new major assets. And to have Blackrod within the portfolio is a huge cornerstone growth element to the portfolio.

Christopher Basquet (Analyst)

Oh, definitely. Thank you very much, Will. That’s all for me.

OPERATOR

Thank you. We’ll now take our next question from Theodore Nilsson of SB1 Markets. Your line is open. Please go ahead.

Theodore Nilsson (Analyst)

Morning, Will and Christoph. Thanks for taking my questions and congrats on a strong quarter. A few questions from me: first on the Mooney asset sale, could you remind us of the 2C resources that were booked on that asset and assume there are no 2P booked on it? Second question is on the small additional CapEx that you guide for this year; how should we think around production impact of that CapEx? And my third question is on exit rate production for this year.

Of course you expect higher production in Q4 than in Q3 and also year to date, and how to think around the production level going into January 2027? Thanks.

William Lundin (Chief Executive Officer)

Thanks, Theodore. I’ll touch on the Mooney. I might have to ask you to repeat the production question after I answer the Mooney question, as I didn’t hear it fully through the microphone there. Mooney was an asset not necessarily core within the portfolio. In terms of volumes it had around 4 million barrels of 2P reserves assigned to it. That translates into a circa USD $12 per barrel in sale proceeds, which is quite accretive relative to the rest of the portfolio and 2P volumes traded across our enterprise value.

And on the production side, do you mind repeating the question there, Theodore?

Theodore Nilsson (Analyst)

Yeah, well there were actually two questions on production. The first was the additional CapEx that you spent this year. Should we expect that to impact production anything going into 2027? And the second question was on expected exit rate production this year.

William Lundin (Chief Executive Officer)

Thanks for that. That was very clear. Yes, the additional capital expenditure elements that we’ve added, you know, in Q1 that was announced and now in Q3, some drilling in southern Alberta — talked about the Brooks four-well campaign. We’ve done some infills at Onion Lake Thermal as well. Of course, the France program, as I’d highlight, is starting to contribute now, but the majority of these investments are more back-end weighted with production contributions and running into 2027.

With respect to exit rates, we haven’t guided. Of course, it’s a pretty wide range to exit the year, largely from the Blackrod asset. But what I can say is we expect to be in excess of 50,000 barrels of oil equivalent per day for sure, exiting this year.

Theodore Nilsson (Analyst)

Okay, understood. Thanks.

William Lundin (Chief Executive Officer)

Thank you.

OPERATOR

Thank you once again. As a reminder, if you would like to ask a question, please press Star one on your telephone keypad. We’ll pause for a brief moment. Thank you. We’ll take a follow-up question from Jada Nilfon. Your line is open. Please go ahead.

Jada Nilfon

Yeah, thanks. Just one question. You highlighted there’s been a very active M&A environment globally the past quarters. I totally agree on that one. Should we think of IPC being a net buyer or net seller over the next few years?

William Lundin (Chief Executive Officer)

Yeah. I wouldn’t put us in one particular categorization. Of course we remain steadfast to maximizing our value for our shareholders, and we’re opportunistic at our core, and it’s a very volatile industry, of course, that we’re in. So subject to market environment, pricing — you know, it depends. And of course, willing sellers of assets and value expectations. We’re generally opportunistic and we consider ourselves to be ruthless capital allocators. So, provided a right opportunity comes forward for an asset coming to market or a company in particular, if it fits the build of what we think to be a complementary asset within our portfolio, we’ll take a close look at that, but be grounded by ensuring any acquisition that we make is accretive or it is absolutely transformational — transformational that takes us to the next level.

And then on the disposition side, we’re not running any active sales processes. We’re opportunistic at our core here. So that’s how we look to approach the A&D side of the business.

Jada Nilfon

Understood. Sounds reasonable. Are there any regions that we should rule out that you’re looking at in a potential expansion scenario? Okay, that’s fair. Thank you. That’s all for me, thanks.

OPERATOR

Thank you. We have no further questions in queue. I will now hand it over to the company.

Rebecca Gordon (SVP IR and Corporate Planning)

Thank you very much, Operator. Just a couple of questions here — very detailed on 2027 on the asset level and free cash flow. Obviously at the moment we’re going through our budget process and we will present all of those numbers on our capital markets day next year in the details that’s requested. So just moving on to some other questions here. Christoph, question from Jonas from Clarksons. A question in relation to hedging. Beyond some hedges related to the differential, you have limited direct oil price hedges.

Will you be considering putting on hedges given the current elevated oil price environment and also considering potential future investments in Blackrod?

Christoph

Yeah, no, that’s a very good question and one which is being discussed inside the company at this stage. Up to now we’ve taken the view that the market is quite volatile but the prices are very dislocated and pretty strong. And we have limited — like we have no significant debt maturities into 2027 and we’re expecting to have also a limited CapEx program at least immediately in 2027. And so for those two main reasons, at this stage we’ve decided not to hedge any benchmark oil prices.

But we follow the backwardation of the oil curve very closely and if we believe that there are really good opportunities, we may consider it. But at this stage the policy of the company has been stated very clearly: absent any significant debt maturities or significant CapEx, we are not going to hedge benchmark oil prices.

Rebecca Gordon (SVP IR and Corporate Planning)

Okay, thanks, Christoph. Will, how do you prioritize balance between different capital allocation priorities?

William Lundin (Chief Executive Officer)

Yeah, it’s a great question. And as we’re transforming and inflecting here to a period of generating much more free cash flow as we’ve completed successfully the build-out of Blackrod, we have quite a good optionality set in terms of organic growth potential, shareholder returns, and M&A. Those key capital allocation and strategic pillars for the company are ones that we constantly review and look to strike the best balance, subject to the market conditions, in order to maximize our value.

Ultimately, we’re not strict with our shareholder return framework, but we look, with the climbing production volumes, with further growth optionality in the portfolio, and shareholder returns reinitiating this year, we feel like we’re poised to be able to really do it all.

Rebecca Gordon (SVP IR and Corporate Planning)

Great. And perhaps quite a topical question to finish off, Will, from David Linskog, and it is: has AI changed the way you work in any way — thinking in terms of well optimization, drill programs — and can it have a material impact on your business?

William Lundin (Chief Executive Officer)

Yeah, for sure. I mean International Ptrl, I would characterize this more as a fast follower rather than a company that, you know, is going to be implementing, you know, R and D and early stage technologies. However, with that being said, there’s been an amazing evolution of artificial intelligence and platforms that really can drive efficiency and overall day-to-day business activity across all industries. And we’re definitely partaking in some of those platforms that help drive those efficiencies as it comes to drilling and the, the application towards our assets, specifically with data management, data interrogation, you know, that is something that is, is definitely under review and being looked into and I think, you know, as, as time progresses and this, this artificial intelligence continues to, to evolve and come stronger and stronger, it’s going to undoubtedly, you know, bring additional efficiency to the business all around.

Rebecca Gordon (SVP IR and Corporate Planning)

Okay, very good. Those are the questions we have time for today. So thanks everyone for tuning in.

William Lundin (Chief Executive Officer)

Yeah, thanks everyone for tuning in to the third quarter results update presentation. We’re very pleased with our results and it’s a really exciting backdrop for International Ptrl to be in this position where we’re growing production to record production levels for the company in the imminent future. Here we’re fully exposed to benchmark oil prices in Brent and WTI. In the landscape where it’s one of the biggest energy supply shocks of all time, we feel like we’re very, very strongly positioned relative to the peer group to be able to perform very well.

So thanks for tuning in and we will look forward to update the following presentation for our year-end results and capital markets day in early February 2027. Thank you.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.