International Petroleum: CPI Annual Fact Sheet 2021

international oil company

Annual Information Form

For the year ended December 31, 2021

Dated: March 25, 2022

Contents

GLOSSARY OF TERMS 2

OTHER ADDITIONAL INFORMATION 3

CAUTION REGARDING FORWARD-LOOKING INFORMATION 4

NOTICE OF RESERVES AND RESOURCES 6

PRESENTATION 8

CORPORATE STRUCTURE 9

GENERAL DEVELOPMENT OF THE BUSINESS 10

DESCRIPTION OF THE ACTIVITY 13

INDUSTRY CONDITIONS 26

RISK FACTORS 39

DATA ON THE STATE OF RESERVES AND OTHER OIL AND GAS INFORMATION 47

DIVIDENDS AND DISTRIBUTIONS 63

DESCRIPTION OF CAPITAL STRUCTURE 63

SECURITIES MARKET 64

SECURITIES IN ESCROW AND SECURITIES SUBJECT TO CONTRACTUAL RESTRICTION OF TRANSFER 65

DIRECTORS AND OFFICERS 66

AUDIT COMMITTEE 69

PROMOTERS 70

LEGAL PROCEEDINGS AND REGULATORY ACTIONS 70

INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS 70

TRANSFER AGENTS AND REGISTRAR AGENTS 70

IMPORTANT CONTRACTS 70

NAMES AND INTERESTS OF EXPERTS 70

ADDITIONAL INFORMATION 71

ANNEX A – CONTINGENT RESOURCE STATUS DATA (RISK-FREE) 72

APPENDIX B – ADDITIONAL DATA ON EVENTUAL RESOURCES ABOUT BLACKROD 81

APPENDIX C – FORM 51-101 A2 (SPROULE) 85

APPENDIX D – FORM 51-101 A2 (ERCE) 88

APPENDIX E – FORM 51-101 A3 90

APPENDIX F – AUDIT COMMITTEE MANDATE 91

Annual Information Form

For the year ended December 31, 2021

GLOSSARY OF TERMS

“Annual Information Form” or “Annual Information Form” means this annual information form of IPC prepared for the fiscal year ended December 31, 2021 and dated March 25, 2022.

“Audited Financial Statements” means the audited consolidated financial statements of the Company for the year ended December 31, 2021.

“BlackPearl” means BlackPearl Resources Inc.

“Board” means the board of directors of the Company.

“COGE Handbook” means the Third Consolidated Edition of the Canadian Oil and Gas Valuation Handbook prepared by the Society of Petroleum Evaluation Engineers (Calgary Chapter), as amended from time to time.

“Common Shares” means common shares in the capital of International Petroleum Corporation.

“ERCE” means ERC Equipoise Ltd.

“FPSO” stands for Floating Production Storage and Offloading Vessel.

“Granite” means Granite Oil Corp.

“Group” means International Petroleum Corporation and its subsidiaries, or one or more of them.

“IFRS” means International Financial Reporting Standards issued by the International Accounting Standards Board and the IFRS Interpretations Committee.

“IPC” or the “Company” means the International Petroleum Company.

“MCR” means the material change report dated February 8, 2022 filed by the Company with respect to certain reserves and resources information.

“MD&A” means the Company’s management report for the year ended December 31, 2021.

“NASDAQ Stockholm” means the Nasdaq Stockholm stock exchange in Sweden.

“NI 51-101” means National Instrument 51-101 – Oil and Gas Disclosure Standards of the Canadian Securities Administrators.

“PSC” stands for Production Sharing Contract.

“SEDAR” means the Canadian Securities Administrator’s Electronic Document Retrieval System.

“Sproule” means Sproule Associates Limited.

“TSX” means the Toronto Stock Exchange in Canada.

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Annual Information Form

For the year ended December 31, 2021

OTHER ADDITIONAL INFORMATION

Abbreviations

CAD or $CA

Canadian dollar

EUR or

euro

USD or US$

American dollar

Terms and measures related to oil

AECO

The daily average natural gas benchmark price at the AECO hub in southeastern Alberta

ºAPI

An indication of the specific gravity of crude oil measured on the API (American Petroleum Institute)

severity scale

NEWT

Alkaline surfactant polymer (an EOR process)

bbl

Drum (1 drum = 159 litres)

boeh(1)

Barrels of oil equivalent

boepd

Barrels of oil equivalent per day

bopd

Barrels of oil per day

bcf

Billion cubic feet

Bscf

Billion standard cubic feet

CHOPS

Production of cold heavy oil with sand

Empress

The benchmark natural gas price at Point Empress at the Alberta/Saskatchewan border

EOR

Enhanced oil recovery

G.J.

gigajoules

Mbbl

thousand barrels

MMbbl

million barrels

Mboe

thousand barrels of oil equivalent

Mboepd

Thousand barrels of oil equivalent per day

Mbopj

Thousand barrels of oil per day

Mboe

Million barrels of oil equivalent

mcf

thousand cubic feet

MMcf

Million cubic feet

NGL

Natural gas liquid

SAGD

Steam Assisted Gravity Drainage (a heat recovery process)

WTI

West Texas Intermediate (a light oil benchmark price)

WCS

Western Canadian Select (a heavy oil benchmark price)

(1) All boe volume references are calculated on the basis of six thousand cubic feet of natural gas per barrel of oil equivalent (6 Mcf: 1 barrel), unless otherwise specified. This conversion ratio is based on an energy equivalence conversion method primarily applicable to the burner nose and does not represent a value equivalence at the wellhead. Boes can be deceiving, especially if used in isolation. Since the value ratio based on the current price of crude oil to natural gas is significantly different from the energy equivalence of 6:1, using a conversion on a 6:1 basis can be misleading. as an indication of value.

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Annual Information Form

For the year ended December 31, 2021

CAUTION REGARDING FORWARD-LOOKING INFORMATION

This Annual Information Form contains statements and information that constitute “forward-looking statements” or “forward-looking information” (as defined in applicable securities laws). These statements and information (collectively, “forward-looking statements”) relate to future events, including the Company’s performance, prospects or future business opportunities. Actual results may differ materially from those expressed or implied by forward-looking statements. The forward-looking statements contained in this Annual Information Form are expressly qualified by this cautionary statement. Forward-looking statements speak only as of the date they are made, unless otherwise stated. IPC does not intend and undertakes no obligation to update these forward-looking statements, except as required by applicable law.

The Covid-19 virus and related restrictions and disruptions have had a significant effect on global demand and prices for oil and gas as well as the market price of oil and gas company shares generally. Although demand, commodity prices and equity prices have recovered, there can be no assurance that these effects will not continue or that commodity prices will not decline or remain volatile in the future. These factors are beyond the Company’s control and it is difficult to assess how these and other factors will continue to affect the Company and the market price of IPC’s common stock. In light of the current situation, as of the date of this Annual Information Form, the Company continues to review and assess its business plans and assumptions regarding the business environment, as well as its production estimates, future cash flows, operating costs and capital expenditures.

All statements other than statements of historical fact may be forward-looking statements. Any statement that expresses or involves discussions regarding predictions, expectations, beliefs, plans, projections, forecasts, directions, budgets, goals, 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”, ” plan”, “predict”, “potential”, “targeting”, “”intend”, “could”, “could”, “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 regarding:

  • IPC’s ability to maximize liquidity and financial flexibility in connection with the current and future Covid-19 outbreak;

  • the potential for the future economic environment to improve, including due to a lack of capital investment and drilling in the oil and gas industry;

  • Estimates of production range, operating costs and capital and decommissioning expenses for 2022;

  • estimates of future production, cash flows, operating costs and capital expenditures that are based on IPC’s current business plans and assumptions regarding the business environment, which are subject to change;

  • IPC’s financial and operational flexibility to continue to respond to recent events and lead the Company through periods of commodity price volatility;

  • IPC’s continued access to its existing credit facilities, including current financial headroom, on terms acceptable to the Company;

  • the ability to fully fund 2022 expenses from cash flow and current borrowing capacity;

  • IPC’s ability to maintain operations, production and business in light of current and future Covid-19 outbreaks and related restrictions and disruptions, including risks related to production delays and disruptions, changes in laws and regulations and dependence on third-party operators and infrastructure;

  • IPC’s intention and ability to continue to implement our strategies to create long-term shareholder value;

  • the ability of IPC’s portfolio of assets to provide a solid foundation for organic and inorganic growth;

  • the continued availability of facilities and performance of reservoirs in IPC’s operating areas;

  • the potential for future development of the Suffield and Ferguson operations in Canada, including the timing and success of future oil and gas drilling and optimization programs;

  • development of the Blackrod Project in Canada, including estimates of resource volumes, future production, timing, break-even prices and net present value;

  • current and future production from drilling rigs and the timing and success of facility upgrades, tie-in work and infill drilling at Onion Lake Thermal;

  • the potential improvement in the oil outflow situation in Canada and IPC’s ability to benefit from such improvements;

  • the timing and success of future development projects and other organic growth opportunities in France;

  • the ability to maintain current and forecast production in France;

  • IPC’s ability to achieve and maintain current and expected production in Malaysia;

  • the successful drilling of the A15 deviated well and the production well pumping rate optimization project in Malaysia;

  • IPC’s ability to acquire additional common stock under the share buyback program, including the timing of such purchases;

  • the return of value to IPC shareholders following the share buyback program;

  • IPC’s ability to implement other distributions to shareholders in addition to the share buyback program;

  • IPC’s ability to implement its climate and greenhouse gas (GHG) emissions intensity strategies and achieve its net GHG emissions intensity reduction targets;

  • estimates of reserves and contingent resources;

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