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Thursday, March 19, 2020
InPlay Oil (IPOOF)
Results in line but dark clouds growing
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 OTCQZ Exchange under the symbol IPOOF.
Michael Heim, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Operational results strong. The company met production guidance with 7% year over year growth. Operating costs continue to decline (2019 LOE of $14.36/BBL vs $16.02). Reserves are being replaced (120% reserve replacement) even as the company limits cap exp to a level below operating cash flow. All in all, this was a good year for the company on an operational side as positive trends that have developed in recent years continued.
Financial results slightly below expectations. Realized oil and gas prices were near expectations (oil slightly below and gas above) leading to revenues being near expectations. Operating netbacks (sales less royalties, transportation and operating costs) were generally in line for the quarter and year. The same can be said for adjusted fund flow for the quarter and year which came in at $7.9 and $32.5 million versus our $8.2 and $34.2 million estimates. EPS of $(0.28) and $(0.39) were well below our $(0.01) and $(0.12) estimates. We speculate that interest expense and income taxes were greater than expected. Indeed, net debt levels…
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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).
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