Key Points: – Oil prices jumped over 4% after reports of a partial U.S. embassy evacuation in Iraq raised geopolitical concerns. – Additional support came from President Trump’s doubts over a nuclear deal with Iran, potentially limiting future oil supply. – A breakthrough in U.S.-China trade talks also boosted sentiment, helping crude extend its recent rally.
Crude oil prices soared on Wednesday, climbing more than 4% amid escalating geopolitical tensions and renewed concerns over global supply disruptions. The sharp move followed reports that the U.S. embassy in Baghdad is preparing for a partial evacuation due to rising security threats.
West Texas Intermediate (WTI) crude futures closed at $68.15 per barrel, up 4.5%, while Brent crude, the global benchmark, settled at $69.77, a gain of 4%. The rally reflects growing unease in energy markets over the stability of the Middle East, a region critical to global oil production and transportation.
The price spike was triggered by a Reuters report indicating that U.S. and Iraqi officials are coordinating plans for an “ordered departure” of embassy personnel in Iraq. The development comes amid mounting threats in the region, raising fears that oil infrastructure or transportation routes could be impacted if tensions escalate further.
In addition to the embassy-related concerns, oil prices were also supported by comments from President Donald Trump, who expressed skepticism over the prospects of reaching a new nuclear agreement with Iran — a major oil-producing nation. Speaking during a podcast, Trump said his confidence in a deal had “diminished,” casting doubt on the potential return of sanctioned Iranian barrels to the market.
Oil prices found further support from signs of easing trade tensions between the U.S. and China. Following high-level discussions in London, both nations reportedly agreed to a framework aimed at reducing tariffs and improving trade flows. President Trump hinted that a formal agreement could be imminent, pending final approval from Chinese President Xi Jinping.
The latest surge adds to a month-long recovery in oil prices, which have rebounded from a sharp sell-off in April driven by global economic concerns and softer demand projections. Despite the rebound, both WTI and Brent remain down year-to-date, reflecting the broader market’s caution around demand durability and geopolitical risk.
Analysts are closely watching developments in the Middle East and diplomatic signals from Washington and Beijing, noting that any further escalation or policy shifts could significantly impact global supply dynamics in the weeks ahead
In a strategic move set to reshape the industrial process technology sector, Chart Industries and Flowserve Corporation announced on June 4, 2025, that they will merge in an all-stock transaction, forming a combined company valued at approximately $19 billion. This merger of equals brings together two highly complementary businesses to create a global leader in flow and thermal management solutions.
The newly combined entity will boast an extensive installed base of over 5.5 million assets across more than 50 countries, offering a comprehensive platform that spans the full customer lifecycle—from process design to mission-critical equipment, aftermarket support, and digital monitoring solutions. With combined last twelve months (LTM) revenue of $8.8 billion, the new company is set to make a significant impact across a wide array of high-growth industries, including energy, power generation, chemical processing, data centers, and carbon capture.
At the heart of this merger is a shared commitment to delivering world-class technologies and services. Chart’s expertise in cryogenic, thermal, and specialty solutions blends seamlessly with Flowserve’s core strengths in flow management, including pumps, valves, and seals. This merger creates a differentiated industrial technology platform that is expected to enhance performance, increase predictability through market cycles, and expand customer reach globally.
A major benefit of the transaction is the expansion of aftermarket services, which will now account for roughly $3.7 billion annually, or 42% of total revenue. This significant recurring revenue stream positions the company for stable cash flow and long-term growth. Further, the merger is expected to generate approximately $300 million in annual cost synergies within three years, driven by procurement efficiencies, facility consolidations, and operational streamlining. On top of that, incremental revenue synergies of at least 2% are anticipated over time.
The transaction has been unanimously approved by both boards of directors. Upon completion, Chart shareholders will own 53.5% and Flowserve shareholders will own 46.5% of the combined company. Jill Evanko, current CEO of Chart, will serve as Chair of the Board, while Scott Rowe, CEO of Flowserve, will become the Chief Executive Officer. The board will be evenly split, with six directors from each company.
Financially, the combined company will aim to maintain an investment-grade balance sheet with a leverage ratio of 2.0x net debt to adjusted EBITDA at closing. The firm expects strong cash generation, supporting growth initiatives, debt reduction, and a continued shareholder dividend.
Headquartered in Dallas, Texas, with continued operations in Atlanta and Houston, the new company is poised to become a global industrial technology giant. A new brand identity will be unveiled upon closing, which is expected by Q4 2025, pending shareholder and regulatory approvals.
This transformative merger marks a significant step forward in innovation, scale, and service within the industrial process sector, positioning the company to capitalize on growing demand for integrated and sustainable technologies worldwide.
Key Points: – Meta signs 20-year deal for 1.1 GW of nuclear power from Clinton Clean Energy Center. – Supports grid stability and emissions goals, keeping the Illinois plant from closing. – Part of broader tech shift toward nuclear as AI and data center power demands grow.
Meta has taken a major step toward securing its clean energy future with the announcement of a 20-year agreement to purchase nuclear power from Constellation Energy. Beginning in 2027, the tech giant will buy approximately 1.1 gigawatts of electricity annually from the Clinton Clean Energy Center in Illinois—effectively the full output of the plant’s sole nuclear reactor.
This long-term deal highlights the increasing role of nuclear power in the digital economy, as energy-intensive data centers drive up electricity demand. For Meta, which has pledged to power its operations with 100% clean energy, the agreement is a crucial move to ensure long-term, zero-emission power availability.
The Clinton Clean Energy Center has faced financial uncertainty in recent years. It has operated with the support of zero-emissions credits since 2017, which recently expired. Without a new revenue source, the facility was at risk of early retirement. Meta’s commitment not only guarantees the plant’s continued operation but also supports its potential relicensing and even a modest expansion of its output by 30 megawatts.
While the electricity generated at Clinton will not directly power Meta’s data centers, the deal helps ensure a consistent flow of clean energy to the regional grid. In turn, this strengthens the broader power infrastructure that supports Meta’s energy goals.
This marks Meta’s first official investment in nuclear energy and comes amid a broader trend of tech companies aligning with the nuclear sector. In recent months, Microsoft agreed to buy power from a restarted reactor at Three Mile Island, and Amazon has poured over $500 million into the development of small modular reactors (SMRs). Google is also investing in new nuclear projects and advanced reactor developers.
All three tech giants—Meta, Google, and Amazon—signed a pledge earlier this year calling for a global tripling of nuclear energy production by 2050. The pledge reflects growing consensus in the tech world that nuclear power is essential for achieving deep decarbonization while meeting soaring energy demand.
This partnership also comes as the U.S. government accelerates support for nuclear expansion. President Trump recently signed a series of executive orders aimed at reducing regulatory barriers and developing a domestic supply chain for nuclear fuel. These actions are intended to pave the way for faster deployment of advanced reactors, especially SMRs, which are seen as more scalable and cost-effective than traditional nuclear facilities.
Although Meta’s current agreement focuses on a legacy reactor, the company has signaled strong interest in the next generation of nuclear technology. In December, it issued a request for proposals from developers of advanced nuclear projects, seeking to add between one and four gigawatts of new capacity in the U.S. That process is still underway and represents Meta’s broader ambition to shape the future of clean, reliable power.
Constellation, meanwhile, has hinted that it may pursue a new permit to build an SMR at the Clinton site, signaling long-term potential for growth and innovation at the facility.
Key Points: – Zeo to acquire Heliogen in an all-stock deal, expanding its clean energy reach. – Adds long-duration storage, targeting sectors like data centers and AI. – Boosts efficiency and financing for large-scale energy projects.
In a move that underscores the accelerating convergence of solar energy and long-duration storage solutions, Zeo Energy Corp. (Nasdaq: ZEO) has announced its acquisition of Heliogen, Inc. (OTCQX: HLGN) in an all-stock transaction valued at approximately $10 million. The deal aims to create a unified clean energy platform that serves residential, commercial, and utility-scale markets across the U.S. and beyond.
Zeo Energy, a Florida-based provider of residential solar and energy efficiency services, will integrate Heliogen’s advanced storage technologies to expand into commercial and industrial-scale clean energy applications. These include mission-critical sectors such as data centers, AI infrastructure, and cloud computing facilities—markets increasingly in need of reliable, scalable, and cost-effective energy solutions.
The acquisition represents the outcome of Heliogen’s comprehensive strategic alternatives review and is expected to close in the third quarter of 2025, pending regulatory and shareholder approvals. With the deal’s completion, Heliogen’s shareholders will receive Zeo Class A common stock and the combined entity will retain key technical personnel to drive innovation across new market segments.
This transaction marks a strategic pivot for Zeo, positioning it as a more vertically integrated energy provider with diversified revenue streams and operational reach. The company expects to streamline corporate overhead, broaden its market appeal, and strengthen its balance sheet with the addition of Heliogen’s intellectual property and cash reserves.
Zeo also plans to leverage its affiliated financing arm—responsible for over $44 million in clean energy tax equity financing to date—to support future utility-scale and long-duration projects. This added financing capacity may be particularly beneficial as demand surges for low-carbon infrastructure driven by policy incentives, energy cost volatility, and technological adoption.
For investors, the combined company represents a multi-faceted play on the growing shift toward decarbonization and distributed energy. While Zeo brings an established presence in high-growth residential markets, Heliogen offers utility-grade thermal storage and dispatchable energy systems that address one of the most critical gaps in the clean energy transition: 24/7 reliability.
Both boards have unanimously approved the transaction, and early support from a significant portion of Heliogen’s shareholders has added momentum to the closing process. Once finalized, the deal is expected to create a scalable clean energy company well-positioned to meet rising demand across a broad spectrum of energy users.
As the energy landscape continues to evolve, the Zeo–Heliogen merger reflects a broader industry trend toward integrated platforms capable of delivering end-to-end clean energy solutions—from rooftop solar panels to large-scale grid storage.
Key Points: – Oil rises on U.S.-Iran tensions and Russia sanctions threat. – OPEC+ holds steady but may boost output in July. – Prices stay volatile amid supply risks and demand concerns
Oil prices edged higher Wednesday as traders reacted to a flurry of geopolitical developments that could disrupt supplies from two of the world’s key producers: Russia and Iran.
West Texas Intermediate (WTI) crude rose by 1.6%, settling just below $62 a barrel. The gains came as U.S. President Donald Trump warned that Russian President Vladimir Putin was “playing with fire” following a recent escalation of attacks in Ukraine. The remarks have fueled speculation that Washington could impose fresh sanctions on Russia’s energy sector — a move that would likely reduce Russian oil exports and tighten global supply.
Earlier this year, similar sanctions helped push crude prices above $80 per barrel before prices retreated amid growing fears of oversupply and global economic uncertainty. Although talks between Russia and Ukraine are scheduled to resume in Istanbul on June 2, markets remain on edge over the potential fallout of continued conflict.
Adding to the market tension is mounting uncertainty over Iran’s nuclear program. According to The New York Times, Israeli Prime Minister Benjamin Netanyahu has threatened military action that could target Tehran’s nuclear infrastructure, potentially derailing ongoing negotiations between Iran and the United States. A breakdown in talks could further hinder Iran’s ability to export oil, tightening the global supply picture.
Still, market optimism is tempered by bearish pressures, particularly around the role of the OPEC+ alliance. On Wednesday, the group ratified its existing production quotas through the end of next year, even as eight key member countries prepare for another round of discussions this weekend. Insiders say some members are pushing for a third consecutive monthly production hike starting in July.
“The early confirmation of quotas puts added pressure on this weekend’s decision,” said Robert Yawger, director of energy futures at Mizuho Securities USA. “The market is essentially at the mercy of OPEC on Saturday.”
Rising output from OPEC+ — particularly from members reviving previously idled capacity — has stoked concerns about oversupply. Some segments of the Brent futures curve have flipped into contango, a market condition where future prices are higher than current prices, signaling a supply glut.
Despite the recent uptick, oil prices have trended downward since mid-January, weighed down by global trade tensions, including sweeping tariffs introduced by the Trump administration and retaliatory measures from affected countries. These trade frictions have stoked fears of slower economic growth and weaker demand for fuel.
However, with tentative signs of easing trade disputes and renewed geopolitical risk in oil-producing regions, analysts say the next few weeks will be crucial in determining the market’s direction.
“Oil is being pulled in opposite directions,” said one market strategist. “If sanctions tighten and diplomacy falters, prices could surge. But if OPEC turns on the taps and global growth stalls, we could be looking at a very different scenario.”
Graham Corporation designs, manufactures and sells critical equipment for the energy, defense and chemical/petrochemical industries. The Company designs and manufactures custom-engineered ejectors, vacuum pumping systems, surface condensers and vacuum systems. It is a nuclear code accredited fabrication and specialty machining company. It supplies components used inside reactor vessels and outside containment vessels of nuclear power facilities. Its equipment is found in applications, such as metal refining, pulp and paper processing, water heating, refrigeration, desalination, food processing, pharmaceutical, heating, ventilating and air conditioning. For the defense industry, its equipment is used in nuclear propulsion power systems for the United States Navy. The Company’s products are used in a range of industrial process applications in energy markets, including petroleum refining, defense, chemical and petrochemical processing, power generation/alternative energy and other.
Joe Gomes, CFA, Managing Director, Equity Research Analyst, Generalist , Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
New Award. Yesterday, Graham announced that its Barber-Nichols subsidiary was awarded a $136.5 million follow-on contract to support the U.S. Navy’s Virginia Class Submarine program. This new award strengthens Graham’s position as a critical supplier to the U.S. Navy’s undersea programs.
Details. The contract period of performance extends from April 2025 through February 2034. Graham recognized approximately $50 million in backlog from the contract during the fourth quarter of the fiscal year ended March 31, 2025 to procure long-lead-time materials. As a reminder, the backlog at the end of the fiscal third quarter totaled $384.7 million, just below a record high.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Key Points: – Oil inches up as U.S.-Iran nuclear talks stall without resolution. – Geopolitical risks and strong U.S. data support prices amid market fears. – Bearish sentiment persists due to OPEC+ supply hikes and rising U.S. stockpiles.
Oil prices edged higher this week as U.S.-Iran nuclear negotiations failed to deliver significant progress, deepening market uncertainty and raising concerns over potential disruptions in global supply. West Texas Intermediate (WTI) crude hovered near $61 a barrel following a fifth round of talks in Rome, where both sides reported “some but not conclusive progress.”
Iranian Foreign Minister Abbas Araghchi acknowledged that while talks had moved forward, critical issues remain unresolved. The lack of a breakthrough is fueling doubts about whether Iranian crude will re-enter the market anytime soon. Traders are watching closely, as failed negotiations could restrict supply from the OPEC member and tighten global markets.
Geopolitical tension is further intensifying sentiment. Reports from U.S. intelligence suggesting that Israel may be preparing to strike Iranian nuclear facilities have added to anxiety in the energy sector. While Iranian officials indicated that a deal limiting nuclear weapons development might be possible, Tehran remains firm on continuing uranium enrichment—an issue that could derail diplomacy.
Meanwhile, strong U.S. economic data helped buoy prices after a brief dip triggered by fresh tariff threats from former President Donald Trump. In a social media post, Trump criticized the European Union as “very difficult to deal with” and suggested a sweeping 50% tariff on EU imports starting June 1. The rhetoric briefly shook markets, but solid U.S. consumer and industrial data helped counterbalance demand fears.
Despite the recent uptick, oil’s broader outlook remains bearish. Crude prices are down about 14% year-to-date, recently touching lows not seen since 2021. A faster-than-anticipated easing of production limits by OPEC+ and rising U.S. commercial oil stockpiles have both added to concerns about oversupply.
Energy strategist Jens Naervig Pedersen from Danske Bank emphasized that bearish sentiment persists. He cited ongoing output hikes by OPEC+, lackluster progress in both trade and nuclear talks, and the possibility of sanctions relief for Iran as factors undermining oil prices.
Looking ahead, a virtual meeting of key OPEC+ producers, including Saudi Arabia, is set for June 1 to decide on output levels for July. Most analysts surveyed by Bloomberg anticipate a continued rise in production, which could further pressure prices.
Adding another wrinkle, the European Commission is proposing to lower the price cap on Russian oil to $50 a barrel. Currently set at $60, the cap was designed to punish Russia for its war in Ukraine while keeping oil flowing. With prices already low, the existing ceiling is seen as ineffective.
In summary, oil is caught in a tug-of-war between geopolitical risk and structural oversupply. Unless a clear resolution emerges in U.S.-Iran talks or OPEC+ shifts its stance on production, the market may remain volatile with a downward bias.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First quarter financial results. Hemisphere generated first quarter oil and gas revenue of C$27.3 million, an increase of 30.4% year-over-year, and above our estimate of C$24.4 million. Net income amounted to C$8.9 million or C$0.09 per share compared to C$6.8 million or C$0.07 per share during the prior year period and our estimates of C$8.2 million or C$0.08 per share. The strong earnings were reflective of a 22.3% year-over-year increase in production to 3,833 barrels of oil equivalent per day (boe/d) from 3,133 boe/d, along with better-than-expected commodity pricing due to the company’s strategic hedging. Adjusted funds flow (AFF) amounted to C$12.7 million or C$0.13 per diluted share compared to C$10.1 million or C$0.10 per diluted share during the prior year period. We had forecasted AFF of C$11.2 million.
Updating estimates. Based on first quarter results and management’s production guidance of 3,800 boe/d for the second quarter, we are raising our 2025 revenue estimates to C$98.2 million from C$94.8 million. We have modestly increased our operating expense estimate to C$38.4 million from C$37.6 million. Additionally, we are raising our net income and earnings per share (EPS) estimates to C$31.3 million and C$0.30, from C$30.3 million and C$0.29. We expect full year 2025 AFF of C$44.7 million, up from our previous estimate of C$43.0 million.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
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*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
Vancouver, British Columbia–(Newsfile Corp. – May 22, 2025) – Hemisphere Energy Corporation (TSXV: HME) (OTCQX: HMENF) (“Hemisphere” or the “Company”) provides its financial and operating results for the first quarter ended March 31, 2025, declares a quarterly dividend payment to shareholders, renews credit facility, and provides operations update.
Q1 2025 Highlights
Attained record quarterly production of 3,833 boe/d (99% heavy oil), a 21% increase over the same period of last year.
Generated $27.3 million in revenue, a 30% increase over the first quarter of 2024.
Achieved total operating and transportation costs of $14.63/boe.
Delivered an operating netback1 of $17.0 million, or $49.27/boe.
Realized quarterly adjusted funds flow from operations (“AFF”)1 of $12.7 million, or $36.83/boe, a 26% increase over the first quarter of 2024.
Generated free funds flow1 of $11.5 million, or $0.12 per share.
Distributed $2.4 million, or $0.025 per share, in dividends to shareholders during the quarter.
Purchased and cancelled 709,700 shares for $1.3 million under the Company’s Normal Course Issuer Bid (“NCIB”).
Exited the first quarter with positive working capital1 of $14.1 million, compared to $4.2 million at the end of March 2024.
(1) Operating netback, adjusted funds flow from operations (AFF), free funds flow, capital expenditure, and working capital are non-IFRS measures, or when expressed on a per share or boe basis, non-IFRS ratio, that do not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other entities. Non-IFRS financial measures and ratios are not standardized financial measures under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Refer to the section “Non-IFRS and Other Specified Financial Measures”.
Selected financial and operational highlights should be read in conjunction with Hemisphere’s unaudited condensed interim consolidated financial statements and related notes, and the Management’s Discussion and Analysis for the three months ended March 31, 2025 which are available on SEDAR+ at www.sedarplus.ca and on Hemisphere’s website at www.hemisphereenergy.ca. All amounts are expressed in Canadian dollars unless otherwise noted.
Quarterly Dividend
Hemisphere is pleased to announce that its Board of Directors has approved a quarterly cash dividend of $0.025 per common share in accordance with the Company’s dividend policy. The dividend will be paid on June 30, 2025 to shareholders of record as of the close of business on June 19, 2025. The dividend is designated as an eligible dividend for income tax purposes.
Including Hemisphere’s special dividend of $0.03 per common share paid in April and base quarterly dividends of $0.025 per common share in February and June, Hemisphere will have paid its shareholders $0.08 per common share in dividends during the first half of 2025.
Credit Facility
The Company has completed its annual bank review and renewed its $35.0 million two-year extendible credit facility with the same key terms, and the next annual review date set for May 31, 2026.
Operations Update
With the majority of Hemisphere’s 2025 capital spending scheduled for the latter half of the year, the Company generated $11.5 million in free funds flow during the first quarter. Current second quarter production of approximately 3,800 boe/d (99% heavy oil, field estimates between April 1 – May 15, 2025) is consistent with that of the first quarter, and represents an increase of 13% over fourth quarter production of 3,359 boe/d (99% heavy oil), due both to downtime in November and continued injection support from Hemisphere’s polymer floods at its Atlee Buffalo projects in southeast Alberta.
At Hemisphere’s Marsden pilot polymer flood project, injection continues to repressure the reservoir. Management anticipates that polymer response could take until late 2025, at which time the Company will determine economics of further development.
Management continues to closely monitor the volatility of the oil market and will adjust capital spending accordingly. With over $14 million in working capital and an undrawn credit line, Hemisphere will prioritize shareholder returns, share buybacks, and potential acquisition activity over accelerated capital spending.
Annual General and Special Meeting of Shareholders
Hemisphere’s Annual General and Special Meeting of Shareholders will be held at 10:00 am (Pacific Daylight Time) on June 2, 2025 in the Walker Room of the Terminal City Club located at 837 West Hastings Street, Vancouver, British Columbia.
About Hemisphere Energy Corporation
Hemisphere is a dividend-paying Canadian oil company focused on maximizing value-per-share growth with the sustainable development of its high netback, ultra-low decline conventional heavy oil assets through polymer flood enhanced oil recovery methods. Hemisphere trades on the TSX Venture Exchange as a Tier 1 issuer under the symbol “HME” and on the OTCQX Venture Marketplace under the symbol “HMENF”.
For further information, please visit the Company’s website at www.hemisphereenergy.ca to view its corporate presentation or contact:
Don Simmons, President & Chief Executive Officer Telephone: (604) 685-9255 Email: info@hemisphereenergy.ca
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Investor webinar. Century Lithium recently discussed the Angel Island Lithium project during an insightful investor webinar. Key highlights included: 1) Angel Island is an advanced project with one of the largest lithium deposits in the United States, 2) the project employs a proven patent-pending process for chloride leaching, along with direct lithium extraction to produce lithium carbonate, 3) Century has a secured a 1,770 acre-feet per year water rights permit, and 4) the company has demonstrated its ability to consistently produce battery grade lithium carbonate on-site at its pilot plant in Amargosa Valley, Nevada.
Nearing completion of a Plan of Operations. Management expects to submit a Plan of Operations to the Bureau of Land Management within the next few months, which would enable the company to initiate the National Environmental Policy Act (NEPA) permitting process. We anticipate the NEPA permitting process could take between 12 and 24 months, depending on whether an environmental assessment or environmental impact statement is required. An environmental impact statement generally takes longer.
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This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
InPlay Oil is a junior oil and gas exploration and production company with operations in Alberta focused on light oil production. The company operates long-lived, low-decline properties with drilling development and enhanced oil recovery potential as well as undeveloped lands with exploration possibilities. The common shares of InPlay trade on the Toronto Stock Exchange under the symbol IPO and the OTCQX Exchange under the symbol IPOOF.
Mark Reichman, Managing Director, Equity Research Analyst, Natural Resources, Noble Capital Markets, Inc.
Hans Baldau, Associate Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
First quarter financial results. InPlay Oil reported a first quarter net loss of C$2.9 million or C$0.18 per share compared to net income of C$1.7 million or C$0.02 per share during the prior year period. This was below our net income estimate of C$4.2 million or C$0.15 per share, primarily due to an unrealized loss on derivative contracts of C$4.6 million and higher-than-expected expenses. Moreover, commodity prices declined slightly during the first quarter, leading to lower revenues of C$38.4 million compared to our estimate of C$40.4 million.
Corporate 2025 guidance. The company generated quarterly production of 9,076 barrels of oil equivalent per day (boe/d), a 5% increase year-over-year and above our expectations of 8,800 boe/d. The company is raising its estimated field production expectations to 21,500 boe/d, a marked increase from 18,750 boe/d, and expects 2025 full year production to be in the range of 16,000 to 16,800 boe/d. Revenue guidance has been adjusted downward to C$46.75 to C$51.75 boe/d from C$56.50 to C$61.50 boe/d. Adjusted funds flow is expected to be between C$124 million and C$133 million, down from $204 million.
Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
CALGARY, AB, May 8, 2025 /CNW/ – InPlay Oil Corp. (TSX: IPO) (OTCQX: IPOOF) (“InPlay” or the “Company“) announces its financial and operating results for the three months ended March 31, 2025 and an updated 2025 capital budget following the successful completion of the strategic acquisition of Cardium light oil focused assets (the “Acquired Assets“) in the Pembina area of Alberta (the “Acquisition“) from Obsidian Energy Ltd. And certain of its affiliates (collectively “Obsidian“). InPlay’s condensed unaudited interim financial statements and notes, as well as Management’s Discussion and Analysis (“MD&A”) for the three months ended March 31, 2025 will be available at “www.sedarplus.ca” and on our website at “www.inplayoil.com“. All figures presented herein reflect the Company’s six (6) to one (1) share consolidation, which was effective April 14, 2025. An updated corporate presentation will be available on our website shortly.
First Quarter 2025 Highlights
Achieved average quarterly production of 9,076 boe/d(1) (55% light crude oil and NGLs), a 5% increase over Q1 2024 and ahead of internal forecasts.
Generated strong quarterly Adjusted Funds Flow (“AFF”)(2) of $16.8 million ($1.10 per basic share(3)).
Returned $4.1 million to shareholders by way of monthly dividends, equating to a 16% yield relative to the current share price. Since November 2022 InPlay has distributed $44 million in dividends including dividends declared to date.
Maintained a strong operating income profit margin(3) of 54%.
Improved field operating netbacks(3) to $25.71/boe, an increase of 3% compared to Q4 2024.
First quarter results exceeded expectations, driven in part by the outperformance of newly drilled wells at Pembina Cardium Unit #7 (PCU#7). A two well pad delivered average initial production (“IP”) rates of 677 boe/d (75% light oil and NGLs) over the first 30 days and 492 boe/d (66% light oil and NGLs) over the first 60 days, both significantly above expectations. Over the initial two-month period, production from these wells was more than 100% above our type curve. These wells ranked in the top-ten for production rates for all Cardium wells in the basin for the month of March.
Complementing InPlay’s strong operational momentum, Obsidian drilled four (4.0 net) wells on the Acquired Assets in the first quarter. The first two (2.0 net) wells, which started production mid quarter, are outperforming our internal type curve by approximately 50% with average IP rates of 304 boe/d (91% light oil and NGLs) over the first 30 days and 295 boe/d (85% light oil and NGLs) over the first 60 days. The remaining two wells, brought online in the final days of the first quarter, are performing more than 350% above our internal type curve, with average IP rates per well of 887 boe/d (88% light oil and NGLs) over their initial 30 day period.
The Company is very excited about the highly accretive Pembina Acquisition announced February 19, 2025 and had anticipated strong results from the combined assets. The exceptional results from the first quarter drilling program, combined with the outperformance of base production, have driven current field estimated production to approximately 21,500 boe/d (64% light oil and NGLs) significantly exceeding what we had initially forecasted at the announcement of the Acquisition. Given the current volatility in commodity prices, this material outperformance provides the Company with significant flexibility to scale back our capital program, providing “more for less” while maintaining our production forecasts, allowing for more aggressive debt repayment even in a lower pricing environment.
2025 Capital Budget and Associated Guidance
Following the closing of the highly accretive Acquisition on April 7, 2025, InPlay is pleased to provide initial pro forma guidance inclusive of the Acquired Assets. This guidance reflects the exceptional operational performance across the Company’s expanded asset base, while taking into account the current volatile commodity price environment. It also underscores InPlay’s continued commitment to maximizing free cash flow to support ongoing debt reduction, while positioning the Company to support its return to shareholder strategy.
InPlay’s Board has approved an updated capital program of $53 – $60 million for 2025. InPlay plans to drill approximately 5.5 – 7.5 net Extended Reach Horizontal (“ERH”) Cardium wells over the remainder of the year. A significant portion of the remaining 2025 capital budget is expected to be directed toward the Acquired Assets, which (as outlined above) continue to materially outperform internally modelled type curves. Cost efficiencies realized through InPlay’s recent drilling program, combined with the application of InPlay’s drilling and completion techniques to the Acquired Assets, are expected to further enhance well economics. Capital will also be spent tying in certain InPlay assets into the newly acquired facilities, eliminating significant trucking costs, and marks the first step in our synergy cost savings strategy. Due to the outperformance of production across our asset base, InPlay has reduced total capital spending for the remainder of 2025 by approximately 30% (relative to initial expectations) without reducing production estimates.
Key highlights of the updated 2025 capital program include:
Production per Share Growth:
Forecasted average annual production of 16,000 – 16,800 boe/d(1) (60% – 62% light oil and NGLs), a 15% increase (based on mid-point) in production per weighted average share compared to 2024 despite 30% less capital spending than initially expected, driven by:
Lower corporate base decline rate of 24% due to the favorable decline profile of the Acquired Assets;
Improved corporate netbacks driven by the higher oil and liquids weighting of the Acquired Assets; and
Enhanced capital efficiencies from high graded drilling inventory of the pro forma assets.
FAFF Generation and Dividend Sustainability:
AFF(2) per weighted average share(4) of $5.00 – $5.35, a 13% increase (based on mid-point) compared to 2024.
Free adjusted funds flow (“FAFF”)(3) of $68 – $76 million equating to a 35% – 40% FAFF Yield(3), a 10x increase (based on mid-point) in FAFF per share compared to 2024 despite a 17% year over year reduction in forecasted WTI price.
Top Tier Returns:
Total return of 50% – 55% after combining FAFF Yield and production per share growth(4), which is expected to be at the high end of our peer group.
Debt Reduction:
Excess FAFF(3) is planned to be used to reduce debt.
Projected year-end Net Debt(2) of $213 – $221 million equating to a $31 – $39 million reduction from closing of the Acquisition.
Year-end Net Debt to Q4 2025 annualized EBITDA(3) ratio of 1.1x – 1.3x.
InPlay continues to monitor global trade and commodity dynamics, including United States tariffs on Canada. Capital spending will be weighted towards the back end of the year with drilling expected to resume again in August, providing ample time to finalize capital spending allocation depending on commodity pricing and continued asset performance. As a result of minimal capital spending in the second quarter, InPlay anticipates generating significant FAFF which will be directed to reducing debt. InPlay will remain flexible and will make decisions based on our core strategy of disciplined capital allocation, maintaining financial strength to ensure the long term sustainability of our strategy and return to shareholder program.
Updated 2025 Guidance Summary:
Following closing of the Acquisition, a significant hedging program was undertaken to help provide downside commodity price protection. As further detailed in the hedging summary section in this press release, InPlay has hedged approximately 75% of its net after royalty oil production and 67% of its net after royalty production on a BOE basis for the remainder of 2025. InPlay’s strong hedge book provides insulation to the current commodity price volatility which is highlighted in the sensitivity table below.
With low decline high netback assets, a flexible budget, a resilient balance sheet, and becoming a larger company, InPlay remains well positioned to sustainably navigate future commodity price cycles. Adhering to this disciplined strategy has allowed the Company to navigate previous commodity price cycles including the COVID-19 pandemic price environment.
Financial and Operating Results:
First Quarter 2025 Financial & Operations Overview:
The year has begun with strong momentum as production for the quarter exceeded internal forecasts, largely due to the outperformance of new ERH wells in PCU#7. Three (3.0 net) ERH wells were brought online at the end of February as part of a $13.9 million capital program, inclusive of $1.4 million invested in well optimization initiatives which continues to lower corporate declines. Production averaged 9,076 boe/d(1) (55% light crude oil and NGLs) in the quarter, a 5% increase from 8,605 boe/d(1) in the first quarter of 2024.
Notably, a two well pad drilled in PCU#7 exceeded expectations, delivering average IP rates of 677 boe/d (75% light oil and NGLs) and 492 boe/d (66% light oil and NGLs) per well over their first 30 and 60 days, respectively, which is over 100% above our internally modeled type curve for these wells.
Obsidian drilled four (4.0 net) wells on the Acquired Assets in the first quarter. The first two (2.0 net) wells, which came on production mid quarter, are outperforming the internal type curve with IP rates averaging 304 boe/d (91% light oil and NGLs) and 295 boe/d (85% light oil and NGLs) over the first 30 and 60 days, respectively (approximately 50% above our internally modelled type curve). The last two wells were brought online in the final days of the quarter and are performing significantly above internal forecasts with IP rates averaging 887 boe/d (88% light oil and NGLs) per well over their first 30 days (more than 350% above our type curve).
AFF for the quarter was $16.8 million. In addition, the Company returned $4.1 million ($0.09 per share) in base dividends to shareholders which equates to a yield of 16% based on the current share price. Net debt at quarter-end totaled $63 million, with a net debt to EBITDA ratio(3) of 0.8x, reflecting a healthy financial position.
On behalf of the entire InPlay team and the Board of Directors, we thank our shareholders for their continued support as we advance our strategy of disciplined growth, returns, and long-term value creation. We are excited to report our progress with respect to the strategic Acquisition.
For further information please contact:
Doug Bartole President and Chief Executive Officer InPlay Oil Corp. Telephone: (587) 955-0632
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