Q2 2024 International Petroleum Corp Earnings Call Transcript
Key Points
- International Petroleum Corp (IPCFF) delivered a strong Q2 with a net production average of 48,400 barrels of oil equivalent per day, in line with guidance.
- Operating costs for the quarter were below $15 per barrel of oil equivalent, driven by lower energy input costs at Canadian assets.
- The company generated robust operating cash flow of USD102 million and positive free cash flow of USD8 million despite significant CapEx spend.
- The balance sheet remains strong with net debt at USD88 million and gross cash resources of USD369 million.
- No material safety incidents were reported in the quarter, and the company issued its fifth sustainability report, showing progress towards emissions reduction goals.
- Despite strong performance, the company still forecasts a negative free cash flow for the full year 2024, ranging between minus USD146 to minus USD123 million.
- The company experienced reduced gas optimization activity due to lower natural gas prices, impacting overall production efficiency.
- CapEx spend was slightly lower than expected in Q2 due to weather conditions, potentially affecting project timelines.
- The company remains exposed to weak gas prices, which are expected to persist for the next two to three months.
- Despite significant share buybacks, the company continues to trade at a steep discount relative to its intrinsic value, indicating potential undervaluation by the market.
Welcome everybody to IPC's second quarter results update presentation. I'm William Lundin, the CEO; and joining me and presenting today is Christophe Nerguararian, our CFO. So I'll start in the usual format by touching on the highlights in the quarter as well as provide an operational update at our assets.
Then Christophe will expand in more detail on our financial numbers. Following that we will go into a Q&A session where the questions can be submitted via the operator on conference call or via the web.
So the second-quarter results for IPC were very strong yet again, we delivered a net production average in Q2 of 48,400 barrels of oil equivalent per day, which was in line with our guidance. Our full year production average for the year is 46,000 barrels to 48,000 barrels of oil equivalent per day. So that remains unchanged from the beginning of the year. And we're well on track to deliver within that production guidance.
Operating costs for the quarter settled just below $15
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