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

International Petroleum Corp. (“IPC”) (TSX, Nasdaq Stockholm: IPCO) is pleased to announce that it has entered into an agreement to acquire Granite Oil Corp. (“Granite”) (TSX: GXO) for total equity and debt consideration of approximately USD 59 million (CAD 77.2 million) (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 current production is approximately 1,500 barrels of oil per day (bopd) with further potential for light oil production and development upside, close to IPC’s current area of operations in southern Alberta.

The Acquisition is comprised of high netback, light oil producing assets in the Milk River area of Alberta, located southwest of IPC's existing operations in the Suffield area, just north of the US border (the "Assets"). The Assets are currently producing approximately 1,500 bopd of 29° API oil, from an oil pool which extends over a 50 kilometre fairway. 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. Granite reported combined average wellhead prices of CAD 68.50 per boe and operating netbacks of CAD 34.73 per boe for the third quarter of 2019.

On completion of the Acquisition, almost all of the current production and infrastructure will be 100% owned and operated by IPC. The Acquisition will complement IPC’s current southeast Alberta operations. The Assets will be managed by IPC’s existing Canadian management team, with support from the operational teams currently working with the Assets.

Total 2P reserves attributed to the Assets as at December 31, 2019 are 14.0 MMboe, of which close to 100% are light oil. The Assets also include 6.2 MMboe of unrisked contingent resources (best estimate) as at December 31, 2019. IPC has identified a number of drill-ready opportunities that it believes could add further near-term production of high netback, light oil barrels.

The Acquisition aligns with IPC’s strategy to target low risk production assets with further development potential. IPC expects to provide further information at its Capital Markets Day on February 11, 2020 regarding the Assets and IPC’s plans to optimise production and pursue further development activities.