Presentation

International Petroleum Corp. (IPC) was spun off from Lundin Petroleum and listed as a separate company in Canada and Sweden in 2017. IPC’s asset portfolio consists of oil-weighted assets in Canada, France and Malaysia. The company had 2P reserves of 300 mill boe at YE’19 and guides 2020 production at 37-40,000/boepd. The IPC management team and Board of Directors are made up of individuals instrumental to the success of Lundin, and the Lundin Family holds a large equity ownership in IPC (~25%). The company has a market capitalization of USD 330m and net debt of USD 340m as of Q2’20.

Following the Covid-19 situation, IPC initially took significant steps to scale back production and capex to shore up liquidity. After oil prices rebounded in May, the company managed to stay FCF neutral in Q2 before WC changes and cash taxes, a testament to the benefits of having operational and financial flexibility to respond to market changes.

IPC is a relatively new Lundin Group E&P company with a stated strategy of acquisition-driven growth. The cash generation capacity of the asset portfolio is strong. With the oil market stabilizing and the company’s liquidity position improved, we expect IPC to return to evaluate potential acquisitions or return to share buybacks.