During the third quarter, InPlay continued to build on the momentum generated by its April 7, 2025 acquisition of Cardium-focused light oil assets in the Pembina area of Alberta (the "Acquisition"). Due to the outperformance of base production and material outperformance of our 2025 drilling program, current production rates are ahead of forecast at 19,750 boe/d (61% light oil and NGLs), with two (2.0 net) operated ERH wells scheduled to come onstream in the next week. As a result, InPlay is increasing its 2025 average annual production guidance to 16,900 boe/d, 17,100 boe/d(1) (60% - 62% light oil and NGLs), up 4% from the mid-point of the previous guidance range of 16,000 boe/d, 16,800 boe/d(1) (60% - 62% light oil and NGLs).
The third quarter marked InPlay's most active capital program of the year, as the Company advanced the development of its expanded inventory of high-quality locations. InPlay drilled six (5.2 net) wells in Pembina during the third quarter. Three (3.0 net) of these wells were completed through quarter end and brought on production in mid-October and two (2.0 net) wells are currently being completed and are expected to be brought on production in mid-November. The Company also participated in one (0.2 net) non-operated well, which was drilled, completed, and brought on production in September.
The efficient application of InPlay's drilling and completion techniques on the acquired assets has led to strong well performance and significant capital cost reductions of approximately 20% compared to recent nearby locations of other operators, with InPlay's wells having 50% more frac stages. The three (3.0 net) wells brought on production in October have delivered strong results, with initial production ("IP") rates of 515 boe/d (85% light oil and NGLs) per well over the first 29 days of production.
In addition, the seven (7.0 net) Extended Reach Horizontal ("ERH") wells brought onstream in February/March of 2025 continue to perform at or above internal expectations, highlighted by two (2.0 net) wells which paid out in approximately 75 days and have averaged 700 boe/d to date, approximately 260% above type curve. Cumulatively, all wells drilled in the first quarter of 2025 have produced at an average rate of 410 boe/d over their first 8, 9 months, which is approximately 73% ahead of type curves.
InPlay's 2025 drilling program is now complete, with 8.2 net wells drilled this year, with an additional 4.0 net wells drilled on the acquired assets in the first quarter. InPlay's disciplined approach in this focused area has resulted in strong capital efficiencies, with forecasted 2025 exploration and development expenditures expected to be approximately $53 million, at the lower end of our previous guidance range of $53 - $60 million. This includes the acceleration of our 2026 capital program by building three leases and initiating drilling operations on our first 2026 planned well before year-end. With the majority of capital spending completed by the end of October, and new wells coming online from the third and fourth quarter, InPlay expects to deliver strong free adjusted funds flow ("FAFF")(3) in the fourth quarter.
The oil and gas industry continues to experience volatile commodity prices. Oil and related product inventories in the United States remain near five year lows which provides cushion as there are many varying near term opinions around supply and demand. The majority of analysts agree this is setting the stage for a significant price recovery in 2026. Average Western Canadian and United States natural gas inventories remain close to five-year highs. In Canada, producers have increased production in anticipation of increased demand from LNG Canada Phase 1, which became operational earlier this year. As LNG Canada approaches full design capacity, this is expected to improve forward AECO prices, especially from the lows experienced in the third quarter of 2025 ($0.63/mcf) and 2024 ($0.69/mcf), which were the lowest average quarterly prices on record dating back to 1988. To mitigate downside risk, InPlay has implemented a comprehensive hedging program providing protection against current market volatility. Details of the Company's current hedges are provided in the "Hedging Summary" section of the Reader Advisories.
The continued development of our high-quality assets combined with InPlay's strong operational track record, positions the Company to deliver sustainable FAFF for many years ahead. InPlay remains focused on disciplined capital spending in the current commodity price environment, prioritizing FAFF, long-term debt reduction, per-share growth and continuing our return to shareholder strategy.
Third Quarter 2025 Highlights
Achieved average quarterly production of 18,970 boe/d(1) (60% light crude oil and NGLs), a 131% increase from Q3 2024.
Third quarter light oil weighting increased to approximately 50% driving stronger per boe netbacks and returns.
Generated strong quarterly adjusted funds flow ("AFF")(2) of $26.8 million ($0.96 per basic share(4)) a 104% increase from Q3 2024 despite a 14% decrease in WTI prices.
Realized operating income(3) of $34.7 million, a 112% increase compared to Q3 2024.
Returned $7.5 million to shareholders via monthly dividends (9% yield relative to current share price). Since November 2022, InPlay has distributed $60 million in dividends, including dividends declared to date in the fourth quarter.
Third Quarter 2025 Financial & Operations Overview:
Quarterly production averaged 18,970 boe/d(1) (60% light crude oil and NGLs), exceeding expectations by approximately 700 boe/d despite no new wells coming on production for the past six and a half months. This strong performance was driven by low decline base production and continued outperformance of wells drilled in the first quarter of 2025, as outlined above.
September production was affected by a heavy turnaround period, including downtime at non-operated and operated facilities and four days of planned outage to support expansion of an operated gas plant in our second largest producing area. These items impacted production by approximately 750 boe/d (50% light oil and NGLs) during the month. The impacted production had a higher gas weighting as we shut-in lower rate oil wells with higher gas rates in this period, which mitigated the revenue impact and had the indirect benefit of deferring natural gas production to realize stronger natural gas pricing in the fourth quarter.
In the third quarter, three (3.0 net) ERH wells were drilled on the acquired assets with average length of 2.2 miles. Drilling operations averaged 11 days per well, approximately 7 days faster than offsetting wells recently drilled by other operators. Initial production from these wells, which are still in the clean-up stage, is comparable with other wells that have significantly exceeded type curves at this stage.
Additionally, InPlay drilled two (2.0 net) ERH wells, which are currently being completed and are expected to come on production in mid-November. Drilling operations on these wells averaged 10 days per well, approximately 5 days faster than offsetting wells recently drilled by other operators. Due to production exceeding forecast, completion operations were strategically delayed on these two wells to align with the stronger winter natural gas pricing season, and to provide a higher production rate heading into 2026. The Company also completed a significant operated gas plant expansion ahead of schedule and with minimal downtime, doubling the plant's capacity from 5 mmscfd to 10 mmscfd.
Royalty rates increased to 15.7% in the third quarter compared to 12.9% in the second quarter of 2025. The increase was primarily driven by the strong performance and exceptionally short payout periods of two wells drilled in the first quarter of 2025. These wells came off the Crown royalty holiday period earlier than anticipated, resulting in higher royalty payments for the quarter. Looking ahead, royalty rates are expected to decrease in the fourth quarter, as five new wells are brought on production with the Crown royalty holiday period.
Quarterly operating costs were higher due to slightly higher well servicing costs, additional facility maintenance costs associated with turnarounds and one-time prior period costs being recognized in the quarter. The Company's hedging program realized $2 million in hedging gains in the third quarter, predominantly driven by the natural gas hedges placed as protection for the low gas price environment that was anticipated.
InPlay generated AFF of $26.8 million ($0.96 per basic share) a 104% increase from the third quarter of 2024. These results were achieved despite a 14% decline in WTI pricing and lower than forecasted natural gas prices, with AECO pricing being 8% lower than the previous multi-decade low levels experienced in Q3 2024. During the Q3 2025, the Company paid $7.5 million in dividends, bringing the total dividends paid for the first nine months of 2025 to $19.5 million.
Financial and Operating Results:
(CDN) ($000's)
Three months ended September 30
Nine months ended September 30
2025
2024
2025
2024
Financial
Oil and natural gas sales
79.3
34.2
209.9
113.7
Adjusted funds flow(2)
26.8
13.1
83.7
49.8
Per share, basic(3)(5)
0.96
0.87
3.59
3.31
Per share, diluted(3) (5)
0.96
0.84
3.59
3.18
Per boe(3)
15.36
17.36
18.93
21.40
Comprehensive income (loss)
(4.8)
0.1
(10.9)
7.2
Per share, basic(5)
(0.17)
0.01
(0.47)
0.48
Per share, diluted(5)
(0.17)
0.01
(0.47)
0.47
Dividends
7.5
4.1
19.5
12.3
Per share(5)
0.27
0.27
0.84
0.82
Capital expenditures, PP&E and E&E
22.3
25.2
40.8
56.8
Property acquisitions (dispositions)
(1.7)
(0.0)
291.9
(0.0)
Net debt(2)
(228.4)
(68.0)
(228.4)
(68.0)
Shares outstanding(5)
27.8
15.0
27.8
15.0
Basic weighted-average shares(5)
27.8
15.0
23.3
15.0
Diluted weighted-average shares(5)
27.8
15.5
23.3
15.5
Operational
Daily production volumes
Light and medium crude oil (bbls/d)
9,122
3,279
7,647
3,467
Natural gas liquids (boe/d)
2,334
1,418
2,105
1,448
Conventional natural gas (Mcf/d)
45,081
21,052
38,596
21,446
Total (boe/d)
18,970
8,206
16,185
8,489
Realized prices(3)
Light and medium crude oil & NGLs ($/bbls)
72.35
75.77
72.88
77.33
Conventional natural gas ($/Mcf)
0.75
0.76
1.51
1.63
Total ($/boe)
45.47
45.32
47.50
48.87
Operating netbacks ($/boe)(4)
Oil and natural gas sales
45.47
45.32
47.50
48.87
Royalties
(7.13)
(6.78)
(6.56)
(6.33)
Transportation expense
(0.87)
(0.88)
(0.85)
(0.99)
Operating costs
(17.61)
(16.01)
(16.06)
(15.39)
Operating netback(4)
19.86
21.65
24.03
26.16
Realized gain (loss) on derivative contracts
1.07
1.24
0.35
0.58
Operating netback (including realized derivative contracts) (4)
20.93
22.89
24.38
26.74
On behalf of the entire InPlay team and our Board of Directors, we extend our sincere gratitude to our shareholders for their continued support as we execute our strategy focused on disciplined growth, shareholder returns, and long-term value creation. We are excited by our operational momentum and strong production performance, which positions the Company for a successful, capital efficient 2026. We look forward to sharing our 2026 capital budget in January.
Notes:
1.
See "Production Breakdown by Product Type" at the end of this press release.
2.
Capital management measure. See "Non-GAAP and Other Financial Measures" contained within this press release.
3.
Non-GAAP financial measure or ratio that does not have a standardized meaning under International Financial Reporting Standards (IFRS) and GAAP and therefore may not be comparable with the calculations of similar measures for other companies. Please refer to "Non-GAAP and Other Financial Measures" contained within this press release and in our most recently filed MD&A.
4.
Supplementary measure. See "Non-GAAP and Other Financial Measures" contained within this press release.
5.
Common share and per common share amounts have been updated to reflect the six for one (6:1) common share consolidation effective April 14, 2025.
For further information please contact:
Doug BartolePresident and Chief Executive OfficerInPlay Oil Corp. Telephone: (587) 955-0632
Darren Dittmer Chief Financial Officer InPlay Oil Corp. Telephone: (587) 955-0634
Reader Advisories
Hedging Summary
Q4/25
Q1/26
Q2/26
Q3/26
Q4/26
Q1/27
Natural Gas AECO Swap (mcf/d)
15,800
15,165
14,215
14,215
8,560
4,265
Hedged price ($AECO/mcf)
$2.65
$2.85
$3.00
$3.00
$3.05
$3.65
Natural Gas AECO Costless Collar (mcf/d)
12,640
12,320
11,375
11,375
