InPlay Oil Posts Lower Annual Production, Net Income Drop in 2024
InPlay Oil (TSX: IPO) has released its financial and operating results for 2024, posting adjusted funds flow of $68.5 million ($0.76 per basic share), compared to $91.8 million ($1.03 per basic share) in 2023. The company cites a 44% year-over-year drop in AECO natural gas pricing as a key factor behind this contraction.
AFF in Q4 2024 was $18.7 million, a 20.4% decline from $23.5 million in the same quarter of 2023.
The firm also recorded average annual production of 8,712 boe/d for 2024, which was a modest 3.5% decrease from 2023’s average of 9,025 boe/d. Q4 2024 contributed 9,376 boe/d, slightly down from 9,596 boe/d in the same period a year earlier, attributed to reduced drilling activity during the latter half of the year.
Notably, total oil and natural gas sales of $153.7 million for the full year declined from $179.4 million in 2023, reflecting weaker realized commodity prices. On a per boe basis, overall realized pricing declined 11% year over year.
Net income for the year was $9.5 million ($0.11 per basic share), also notably down from $32.7 million ($0.37 per basic share) in 2023. While the company maintained a strong operating income profit margin of 54% for 2024, this was lower than the 58% margin achieved in 2023.
Dividends amounted to $16.4 million in 2024, translating to a 10.4% yield relative to the company’s year-end market capitalization. This exceeded the $16.1 million distributed in 2023.
Total development capital expenditures were $63 million in 2024, coming in $2.5 million below the midpoint of the $64–$67 million budget range and about 25% lower than 2023.
Despite higher net debt of $60.9 million at the end of 2024, compared to $45.7 million a year earlier, the net debt to EBITDA ratio stood at 0.8×. InPlay renewed its $110 million revolving senior credit facility.
The company’s independent reserve evaluation pegged total proved plus probable reserves at 58,724 mboe, with an NPV (before tax, 10%) of $706 million, although these figures were affected by weaker forecast commodity prices compared to those used in 2023.
Proved developed producing reserves of 17,207 mboe carried an estimated NPV (before tax, 10%) of $222 million.
The pending acquisition of Pembina Cardium assets from Obsidian Energy is slated to close in April 2025. This move is expected to expand the company’s scale in a region where InPlay has proven operational expertise, particularly in drilling extended-reach horizontal wells.
InPlay anticipates upwards of three times FAFF coverage of its current base dividend (11.3%) in 2025 once the Pembina Cardium deal is integrated. The Company has also indicated it will update its full-year 2025 guidance after the acquisition closes.
InPlay Oil last traded at $1.58 on the TSX.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
