Friday, February 21, 2025
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, Research Associate, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Strategic acquisition. InPlay Oil Corp. executed a definitive agreement to acquire light oil-focused assets from Obsidian Energy Ltd. (TSX: OBE, NYSE American: OBE) in the Pembina area of Alberta. The assets have a current production rate of approximately 10,000 barrels of oil equivalent per day (boe/d), with 68% consisting of oil and natural gas liquids (NGLs). The total purchase price is C$309 million and will consist of C$220 million in cash, C$85 million in InPlay common shares priced at C$1.55 per share, and the inclusion of InPlay’s non-operated 34.6% working interest in the Willesden Green Cardium Unit #2 oil field, which has a year-end 2023 Proved Developed Producing (PDP) value of about C$4.4 million.
Transaction highlights. The acquisition appears to offer significant synergies and benefits to InPlay’s operations. InPlay’s production is expected to more than double to 18,750 boe/d from previous guidance of 8,650-9,150. Additionally, on a per share basis, 2025 adjusted funds flow (AFF) is expected to increase to C$204 million from previous guidance of C$69-75 million. Furthermore, the nature of the assets acquired is expected to enhance operational efficiencies to InPlay’s existing Pembina asset base by increasing the scale and contributing to lower decline, higher oil-weighting, and less capital-intensive production.
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