Oil markets are experiencing their sharpest rally in months as geopolitical tensions surrounding Iran send shockwaves through global energy trading. Both Brent crude and West Texas Intermediate have climbed more than 10% over the past week, with prices reaching levels not seen since October.
The rally comes as widespread protests continue to rock Iran, prompting President Trump to warn that the country’s ruling regime would face serious consequences. This marks a significant shift in market attention from Venezuela, where oil shipments have recently resumed, back to Iran—what energy experts are calling the nerve center of global oil markets.
Iran’s position in the global oil landscape is uniquely influential for two critical reasons. First, the country produces over 3 million barrels daily and exports approximately 1.5 million barrels per day. Beyond current production, Iran sits atop more than 200 billion barrels of proven reserves, ranking third globally behind only Venezuela and Saudi Arabia. Unlike Venezuelan crude, Iran’s lighter, medium-weight oil is easier to refine and more desirable for buyers.
Second, and perhaps more critically, Iran largely controls the Strait of Hormuz—a narrow waterway that serves as one of the world’s most vital oil chokepoints. Roughly 20 million barrels per day, representing about 25% of global seaborne petroleum trade, flows through this strategic passage. Any closure or disruption would immediately send prices soaring.
Historical precedent underscores this vulnerability. When Israeli forces struck Iranian military and nuclear sites last June, Brent crude jumped 7% in a single day despite the Strait never actually closing.
Energy analysts warn that sustained civil unrest could disrupt Iran’s oil infrastructure. Widespread upheaval might prevent skilled workers from reaching production and export facilities, while basic services like electricity could become unreliable. Experts suggest at least limited production interruptions are likely if tensions continue escalating.
A worst-case scenario would mirror the 1979 Iranian Revolution, when political upheaval cut the country’s oil production nearly in half—from over 5.7 million barrels per day to just 3.2 million barrels. While analysts consider a complete production collapse unlikely, even partial disruptions would significantly impact global supplies.
The Trump administration has intensified pressure on Tehran, announcing immediate 25% tariffs on any country conducting business with Iran. The president has also signaled support for protesters facing violent crackdowns that have reportedly killed thousands amid internet blackouts.
China, which purchases more than 80% of Iranian crude, would feel immediate effects from any export disruptions. Chinese refiners might shift demand toward Russian oil or tap domestic reserves that Beijing has been stockpiling as geopolitical insurance.
Despite the price spike, some analysts urge caution. The global oil market currently faces a supply glut of approximately 3.6 million barrels per day, which could absorb moderate disruptions. However, trading activity tells a different story—Monday saw record volume in Brent crude call options as traders hedge against sudden price spikes, while volatility indicators have reached their highest levels since last summer’s strikes.
For now, markets remain on edge, closely watching whether Iran’s internal turmoil will translate into the sustained supply disruption that could send prices substantially higher.
When Michael Burry makes a move, investors pay attention. The man who famously predicted the 2008 housing crisis has been quietly holding a position since 2020 that suddenly looks prescient following this weekend’s dramatic events in Venezuela. In a Monday blog post on Substack, Burry revealed he’s owned Valero Energy for five years, describing himself as “more resolved to holding it even longer” after President Trump’s pledge to rebuild Venezuela’s oil sector.
Burry’s thesis is straightforward but powerful. Many Gulf Coast refineries were specifically designed to process Venezuelan heavy crude, meaning they’ve been operating with suboptimal feedstock for years due to sanctions and Venezuela’s production collapse. As Venezuelan oil flows return, these refineries should see improved margins across jet fuel, asphalt, and diesel. Valero shares surged nearly 10% on Monday, vindicating Burry’s patience. The refiner’s capability to efficiently process heavy, high-sulfur crude creates a natural moat that Burry clearly recognized back in 2020, long before this political inflection point.
But Burry isn’t just focused on the obvious large-cap play. He specifically mentioned that smaller refiners like PBF Energy and HF Sinclair could also benefit, even if Venezuelan oil returns only gradually. This acknowledgment of opportunity across the market cap spectrum is noteworthy and particularly relevant for small-cap investors looking beyond the headlines. While any meaningful recovery in Venezuelan exports will likely take years, Burry’s willingness to highlight mid-sized players suggests he sees value throughout the sector.
The investor’s analysis extends beyond refining. Venezuela’s oil infrastructure has suffered from decades of underinvestment, creating substantial demand for oilfield services companies if large-scale rehabilitation begins. Burry disclosed he owns Halliburton and sees potential upside for Schlumberger and Baker Hughes, companies that could be contracted to rebuild deteriorated pipelines and refineries. His comment about potentially buying more Halliburton shares or LEAPs—long-term options contracts—reveals his conviction level and provides a template for how investors might gain leveraged exposure while managing risk.
The timing of Burry’s revelation is significant. He’s held Valero since 2020, a period when Venezuela remained under heavy sanctions and most investors dismissed Venezuelan oil as a dead opportunity. This patience reflects his contrarian nature and willingness to endure extended periods where the market disagrees with his thesis. Wall Street analysts are now rushing to validate what Burry saw years ago, with multiple firms highlighting Valero as a top beneficiary of increased Venezuelan supply.
For small-cap investors, Burry’s framework offers valuable lessons. His mention of PBF Energy and HF Sinclair demonstrates that opportunities exist throughout the market cap structure for companies with the right capabilities. His focus on oilfield services points to second-order effects many investors overlook while fixated on the obvious refining story. And his use of LEAPs shows how options strategies can create leveraged exposure to multi-year themes.
Several key themes emerge from Burry’s playbook. He identified a structural advantage that created long-term value regardless of short-term volatility. He took a multi-year view, holding through uncertainty when the thesis wasn’t working. He’s thinking beyond the obvious, considering services companies and smaller refiners alongside his flagship position. And he’s using options to potentially leverage conviction while managing downside.
The Venezuela oil story is just beginning, and meaningful recovery will take years. But Burry has never been deterred by uncertainty—he’s built his fortune by being right when conventional wisdom said he was wrong. His five-year bet is now in the spotlight, and for those willing to think in multi-year timeframes and look beyond the headlines, his framework offers a roadmap for finding similar asymmetric opportunities.
The U.S. oil industry is facing a sharp slowdown, with layoffs and spending cuts rippling across the sector as lower crude prices and industry consolidation squeeze margins. The wave of belt-tightening could mark the end of the rapid production growth that helped the United States overtake other producers to become the world’s top oil supplier in recent years.
International crude prices have fallen roughly 12% this year, dragged lower in part by rising output from OPEC and its allies, who have been steadily ramping up supply to reclaim market share lost to U.S. shale producers. Prices are now hovering just above $62 a barrel, uncomfortably close to breakeven levels for many U.S. operators. For companies already grappling with higher costs and trade-related tariffs, the weaker pricing environment is forcing tough decisions.
ConocoPhillips, the nation’s third-largest oil producer, recently announced plans to cut up to a quarter of its workforce. The move follows Chevron’s decision earlier this year to trim about 20% of its staff, amounting to roughly 8,000 jobs. Oilfield service providers such as SLB and Halliburton have also been cutting jobs, underscoring how the slowdown is spreading beyond producers to the broader energy ecosystem.
The cuts aren’t limited to people. According to a Reuters review of second-quarter results, 22 publicly traded U.S. producers—including ConocoPhillips, Diamondback Energy, and Occidental Petroleum—have reduced their combined capital spending by about $2 billion. Industry insiders say those pullbacks, along with falling rig counts, are early warning signs that production growth is set to level off. Baker Hughes data shows that the U.S. oil rig count has dropped by nearly 70 so far this year, down to just over 400.
In the Permian Basin, the heart of America’s shale boom, the tone has shifted from aggressive expansion to cautious retrenchment. “We’ve gone from ‘drill, baby, drill’ to ‘wait, baby, wait,’” said one Texas producer, pointing out that prices need to stabilize closer to $70–$75 a barrel before rig activity rebounds. Without that, analysts warn that U.S. output will plateau and could even begin to decline, with OPEC quickly stepping in to fill the gap.
Research firms are already forecasting slower momentum. Energy Aspects expects U.S. onshore production to drop by 300,000 barrels per day in 2025, while Wood Mackenzie projects only modest growth of 200,000 barrels per day—far below the record-setting pace of recent years.
Adding to the pressure are rising costs, much of it tied to tariffs on steel and other inputs. Diamondback Energy expects the price of steel casing for wells to climb by nearly 25% this year, inflating breakeven costs across the industry. For ConocoPhillips, controllable costs have already risen by $2 per barrel since 2021, making profitability harder to sustain.
The impact on employment is significant. Texas labor data shows U.S. oil and gas production jobs fell by nearly 5,000 in the first half of 2025, while energy services jobs have dropped by about 23,000 since January. Even with gains in drilling efficiency, industry analysts caution that technology alone won’t be enough to offset the slowdown.
For now, the U.S. oil industry remains a global leader. But with lower prices, higher costs, and fewer rigs in action, the sector’s once-rapid growth story appears to be entering a more uncertain chapter.
Oil prices advanced on Thursday, August 28, 2025, as geopolitical tensions once again overshadowed fundamentals in the energy market. West Texas Intermediate (WTI) crude rose 0.7% to above $64 per barrel, while Brent crude gained 0.4%. The move reversed earlier declines and reflected renewed concerns about Russian supply disruptions.
The rebound followed comments from German Chancellor Friedrich Merz, who said that a potential meeting between Ukrainian President Volodymyr Zelenskiy and Russian President Vladimir Putin would not take place. Markets had viewed such talks as a possible first step toward easing restrictions on Russian crude exports. With negotiations shelved, traders adjusted expectations for any near-term increase in Moscow’s oil shipments.
Attention also turned to Washington, where President Donald Trump is preparing a statement on Russia and Ukraine. Investors are weighing the possibility that new sanctions could target Moscow’s energy exports more aggressively, raising the risk of further supply constraints.
Meanwhile, Ukraine has escalated military pressure on Russia’s oil sector, ramping up drone strikes against key infrastructure. Over the past month, two refineries were targeted, and tanker-tracking data compiled by Bloomberg showed Russian crude exports slipping last week. These developments highlight the vulnerability of Russia’s energy flows, which remain a critical part of the global supply chain despite sanctions already in place.
The U.S. administration has also taken steps to discourage purchases of Russian crude abroad. White House trade adviser Peter Navarro recently urged India to halt imports, following Washington’s decision to double tariffs on Russian oil shipments to 50%. Any reduction in Indian demand could force Moscow to discount barrels more deeply or find alternative buyers, further complicating the supply picture.
Despite short-term concerns about Russian output, broader fundamentals continue to point toward a weaker market in the months ahead. Analysts expect crude balances to shift into surplus by the end of 2025, as production increases from the OPEC+ alliance and non-OPEC producers outweigh global demand growth.
OPEC+ is scheduled to meet on September 7, though officials have not indicated any immediate plans to cut or adjust production targets. With supply growth already underway, the group faces a delicate balancing act between maintaining market share and stabilizing prices.
Adding to subdued activity, U.S. markets are entering a quiet period ahead of the Labor Day holiday. Thin liquidity has amplified volatility, with relatively small shifts in sentiment causing outsized price moves. Traders appear cautious about taking on new risk until there is clarity from both geopolitical developments and OPEC’s next steps.
For investors, the current environment offers a mixed picture. On one hand, geopolitical risks related to Russia and Ukraine may support periodic rallies in crude prices. On the other, rising global output and surplus forecasts suggest a ceiling on sustained gains.
Small- and mid-cap energy producers with efficient cost structures may remain more resilient if prices soften later in the year, while refiners could benefit from volatile spreads driven by supply disruptions. Commodity-focused investors may find opportunities in short-term volatility, but longer-term positioning will likely depend on how OPEC+ manages supply and whether sanctions meaningfully reduce Russian exports.
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.
Company strategy. Despite the recent improvement in oil prices, InPlay is maintaining its 2025 production guidance at 16,000 to 16,800 boe/d. Management reiterated that the strategy remains centered on capital discipline, prioritizing debt reduction over production growth. The company’s approach is supported by fluctuating oil prices and the performance of assets acquired from Obsidian Energy, which have demonstrated low decline rates and continue to well-exceed type curve expectations. Recall that as part of the transaction, Obsidian Energy received InPlay shares as part of the consideration.
Non-binding offer. InPlay Oil announced that Obsidian Energy has entered into a non-binding agreement with a third party for the sale of its entire position in InPlay, totaling 9,139,784 common shares. The proposed transaction is expected to occur at a premium to InPlay’s share price as of July 15, 2025. While the parties remain in discussions, no binding agreement has been finalized at this time.
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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.
Oil prices tumbled over 3% on Monday despite rising geopolitical tensions in the Middle East, as investors appeared to discount the threat of immediate disruptions to global crude supplies following Iran’s missile strike on a U.S. airbase in Qatar.
U.S. crude futures dropped by $2.32, or 3.14%, to settle at $71.52 per barrel, while global benchmark Brent crude declined by $2.41, or 3.13%, to $74.60. The sell-off marked a sharp reversal from gains seen Sunday evening, when Brent briefly surged above $81 following news of U.S. airstrikes on Iranian nuclear facilities.
Iran’s Revolutionary Guard confirmed it had launched missiles at Al-Udeid Air Base in Qatar, home to U.S. and coalition forces. While no casualties or infrastructure damage were reported, the strike underscored the escalating tit-for-tat between Tehran and Washington.
Despite the headline risk, oil markets remained notably calm. “The market is pricing in a de-escalation path,” said Jorge Leon, head of geopolitical risk at Rystad Energy. “But the potential for things to unravel very quickly still exists.”
President Donald Trump, meanwhile, took to social media to urge for lower oil prices, telling “everyone” — likely including domestic producers — to help keep prices in check. The president’s comments reflect his administration’s concern over inflation ahead of the November election.
Geopolitical Flashpoint: Strait of Hormuz
The key long-term risk remains Iran’s threat to close the Strait of Hormuz, through which nearly 20% of the world’s oil passes daily. Iranian state media reported that parliament supported shutting down the vital waterway, although the final decision lies with Iran’s national security council.
U.S. Secretary of State Marco Rubio warned that such a move would be “economic suicide” for Iran, noting that the Islamic Republic relies on the strait for its own oil exports. “We retain options to deal with that,” Rubio said, hinting at potential multilateral military responses.
Rubio also urged China, Iran’s top oil customer, to use its influence to dissuade Tehran from taking further steps that could disrupt regional stability. “About half of China’s seaborne oil comes through that corridor,” he said.
Market Psychology: Risk vs. Supply
Despite the barrage of developments, investors seem confident that major disruptions to supply remain unlikely in the short term. Iran continues to export nearly 1.84 million barrels per day, largely to China, and major production hubs remain operational.
Memories of 2019 — when Iranian-linked groups targeted Saudi oil facilities — and the subsequent quick recovery, may also be tempering investor anxiety. Additionally, diplomatic overtures between Iran and Saudi Arabia are viewed as a stabilizing factor in an otherwise volatile region.
The International Energy Agency (IEA) said it is closely monitoring the situation and is prepared to release strategic reserves if necessary. The IEA currently holds 1.2 billion barrels in emergency stockpiles.
For now, oil prices may remain rangebound as investors weigh the potential for further escalation against the apparent reluctance from both sides to push the conflict to extremes.
Oil markets wrapped up their third consecutive week of gains on Friday as investors watched closely for U.S. President Donald Trump’s next move regarding the Israel-Iran conflict. West Texas Intermediate (WTI) crude settled just below $75 per barrel, while Brent crude, the global benchmark, hovered around $76, both on track to post roughly 3% gains for the week.
The latest rally in oil prices was largely driven by geopolitical tensions ignited by renewed hostilities between Israel and Iran. While the conflict hasn’t disrupted oil flows yet, the mere prospect of a wider regional escalation has kept traders on edge.
Early Friday trading saw a slight dip in prices as Trump signaled a potential preference for diplomacy over immediate military intervention. “We’ll give diplomacy a chance,” he told reporters on Thursday, suggesting that a final decision on U.S. involvement is still pending. This hint of restraint helped cool the market’s reaction temporarily but did little to derail the broader upward trend in crude prices.
Despite rising oil prices, analysts from major financial institutions remain cautious about the long-term impact of the conflict on global energy markets. Citi’s commodities research team believes the risk of significant supply disruption remains limited.
“Disrupting oil supply isn’t in the interest of either Iran or the U.S.,” said Spiro Dounis, Citi’s senior energy analyst. He noted that even if Iran’s 1.1 million barrels per day of oil exports were completely halted, Brent prices would likely rise only modestly to the $75–78 range — not far above current levels.
Goldman Sachs offered a more dramatic short-term outlook, estimating that in the event of an actual disruption, oil prices could temporarily surge to $90 per barrel. However, the bank expects prices to normalize over the next year, potentially falling back to the $60 range in 2026 as supply recovers.
Importantly, current oil flows remain uninterrupted. Shipments through the Strait of Hormuz — one of the world’s most crucial maritime oil chokepoints — continue unimpeded, and Iranian exports have not declined, easing some of the market’s worst fears.
A key factor cushioning the market is spare production capacity among OPEC+ members. The alliance, which includes major oil producers like Saudi Arabia and Russia, has been gradually increasing output in recent months, providing a potential buffer against sudden supply shocks.
“Above-average global spare capacity — equivalent to 4–5% of global demand — is the main cushion against Iran-specific disruptions,” said Goldman’s Daan Struyven. He pointed to the bloc’s strategic unwinding of production cuts as a stabilizing force in the current market environment.
With uncertainty still looming over the geopolitical situation in the Middle East, oil prices are likely to remain volatile in the near term. Much will depend on whether Trump follows through with military action or continues to push for a diplomatic resolution. For now, investors will be watching closely, knowing that even the perception of risk can be enough to sway global oil markets.
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.
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
U.S. oil production is approaching a turning point, according to Diamondback Energy CEO Travis Stice. In a letter to shareholders this week, Stice warned that domestic output has likely peaked and will begin to decline in the coming months, citing falling crude prices and slowing industry activity as key factors.
“U.S. onshore oil production has likely peaked and will begin to decline this quarter,” Stice wrote. “We are at a tipping point for U.S. oil production at current commodity prices.”
The warning comes as U.S. crude prices have dropped roughly 17% this year, weighed down by fears of a global economic slowdown tied to President Donald Trump’s renewed tariffs and an aggressive supply push from OPEC+ producers. Prices for West Texas Intermediate (WTI) crude briefly surged 4% on Tuesday to $59.56 per barrel amid expectations that U.S. supply will tighten.
Stice emphasized that adjusted for inflation, oil is now cheaper than it has been in nearly every quarter since 2004—excluding the pandemic collapse in 2020. That pricing reality, he said, is forcing producers to slash spending and slow operations, threatening broader economic impacts.
Diamondback, a major producer in the Permian Basin and one of the largest independent oil companies in the U.S., has already reduced its capital spending by $400 million for the year. The company now plans to drill between 385 to 435 wells and complete 475 to 550, while maintaining reduced rig and crew levels.
“We’ve dropped three rigs and one completion crew, and expect to stay at those levels for most of Q3,” Stice said.
The U.S. shale boom of the last 15 years helped make the country the world’s top fossil fuel producer, outpacing even Saudi Arabia and Russia. That shift reshaped the U.S. economy, reduced reliance on foreign energy, and strengthened national security. But Stice now warns that this progress is at risk.
“Today’s prices, volatility and macroeconomic uncertainty have put this progress in jeopardy,” he said.
Fracking activity is already falling sharply. The number of completion crews is down 15% nationwide and 20% in the Permian Basin since January, Stice said. Oil-directed drilling rigs are expected to drop nearly 10% by the end of Q2, with further declines projected in the third quarter.
Adding to the pressure are rising costs tied to tariffs. Stice said Trump’s steel tariffs have added around $40 million annually to Diamondback’s expenses, raising well costs by about 1%. While some of this impact may be offset by operational efficiencies, the CEO warned that sustaining current output levels at lower prices may no longer be financially viable.
Stice likened the situation to approaching a red light while driving: “We are taking our foot off the accelerator. If the light turns green, we’ll hit the gas again—but we’re prepared to brake if needed.”
As the U.S. energy sector confronts an increasingly uncertain landscape, the prospect of declining domestic production is no longer just a possibility—it’s becoming a reality.
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.
Full-year 2024 financial results. Hemisphere Energy reported full-year net income and earnings per share of C$33.1 million and C$0.33, respectively, slightly above our estimates of C$32.3 million and C$0.32. The variance is mainly due to stronger oil pricing of $79.48, compared to our estimate of $76.31. Year-over-year, oil and natural gas revenue increased ~18% to C$79.7 million from C$67.7 million. This increase was driven by increased production and more robust pricing of 3,436 barrels of oil equivalent per day (boe/d) and $79.48, respectively, compared to 3,125 boe/d and $74.07. Likewise, adjusted funds flow (AFF) increased 16% in 2024 to C$45.8 million from C$39.4 million in 2023. We had forecast AFF of C$45.4 million.
Updating estimates. Based on lower crude oil price estimates, we are lowering our 2025 net income and earnings per share estimates to C$30.3 million and C$0.29, respectively, from C$37.2 million and C$0.37. Additionally, we are decreasing our adjusted funds flow estimate to C$42.9 million from C$50.6 million. We are maintaining our 2025 average daily production estimate of 3,900 boe/d, an increase of ~14% over 2024.
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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. – April 3, 2025) – Hemisphere Energy Corporation (TSXV: HME) (OTCQX: HMENF) (“Hemisphere” or the “Company”) is pleased to announce that its board of directors has approved the declaration of a special dividend to shareholders.
Special Dividend
Given the strong financial position and performance outlook of the Company, Hemisphere’s board of directors has approved the declaration of a special dividend of C$0.03 per common share, in accordance with its dividend policy. The special dividend will be paid on April 28, 2025, to shareholders of record on April 17, 2025, and is designated as an eligible dividend for Canadian income tax purposes. It is in addition to the Company’s quarterly base dividend of C$0.025 per common share.
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 EOR 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
Certain statements included in this news release constitute forward-looking statements or forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable securities legislation. Forward-looking statements are typically identified by words such as “anticipate”, “continue”, “estimate”, “expect”, “forecast”, “may”, “will”, “project”, “could”, “plan”, “intend”, “should”, “believe”, “outlook”, “potential”, “target” and similar words suggesting future events or future performance. In particular, but without limiting the generality of the foregoing, this news release includes forward-looking statements including that a special dividend will be paid to shareholders on April 28, 2025, to shareholders of record on April 17, 2025.
Forward‐looking statements are based on a number of material factors, expectations or assumptions of Hemisphere which have been used to develop such statements and information, but which may prove to be incorrect. Although Hemisphere believes that the expectations reflected in such forward‐looking statements or information are reasonable, undue reliance should not be placed on forward‐looking statements because Hemisphere can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified herein, assumptions have been made regarding, among other things: the timing for payment of the special dividend; the general continuance of current industry conditions; the timely receipt of any required regulatory approvals; the ability of Hemisphere to obtain qualified staff, equipment and services in a timely and cost efficient manner; drilling results; the ability of the operator of the projects in which Hemisphere has an interest in to operate the field in a safe, efficient and effective manner; the ability of Hemisphere to obtain financing on acceptable terms; field production rates and decline rates; the ability to replace and expand oil and natural gas reserves through acquisition, development and exploration; the timing and cost of pipeline, storage and facility construction and expansion and the ability of Hemisphere to secure adequate product transportation; future commodity prices; currency, exchange and interest rates; regulatory framework regarding royalties, taxes and environmental matters in the jurisdictions in which Hemisphere operates; and the ability of Hemisphere to successfully market its oil and natural gas products.
The forward‐looking statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements, including the assumptions made in respect thereof, involve known and unknown risks, uncertainties and other factors that may cause actual results or events to defer materially from those anticipated in such forward‐looking statements including, without limitation: changes in project timelines and workstreams; changes in commodity prices; changes in the demand for or supply of Hemisphere’s products, the early stage of development of some of the evaluated areas and zones; unanticipated operating results or production declines; changes in tax or environmental laws, royalty rates or other regulatory matters; changes in development plans of Hemisphere or by third party operators of Hemisphere’s properties, increased debt levels or debt service requirements; inaccurate estimation of Hemisphere’s oil and gas reserve volumes; limited, unfavourable or a lack of access to capital markets; increased costs; a lack of adequate insurance coverage; the impact of competitors; and certain other risks detailed from time‐to‐time in Hemisphere’s public disclosure documents, (including, without limitation, those risks identified in this news release and in Hemisphere’s Annual Information Form).
The forward‐looking statements contained in this news release speak only as of the date of this news release, and Hemisphere does not assume any obligation to publicly update or revise any of the included forward‐looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Oil prices took a dramatic hit on Thursday, tumbling over 7% as panic selling gripped financial markets. The sharp decline followed former President Donald Trump’s announcement of sweeping new tariffs and an unexpected supply increase from OPEC+, both of which fueled uncertainty about global demand and market stability.
By mid-morning, West Texas Intermediate (WTI) crude oil (CL=F), the U.S. benchmark, had fallen 7.5% to around $66.10 per barrel, while Brent crude (BZ=F), the global benchmark, dropped below $70 per barrel. This marked one of the largest single-day declines in recent months and signaled a potential shift in market sentiment.
The steep decline was largely driven by fear and uncertainty rather than immediate changes in supply and demand fundamentals, according to market analysts.
“Current discussions about an expected increase in oil production by the OPEC+ and uncertainties about the real impact of the recently announced tariffs are creating downward pressure on oil prices,” said Francisco Penafiel, managing director of investment banking at Noble Capital Markets. “We feel this volatility will continue at least in the near term, until we start measuring the effects from the tariffs and favorable oil market fundamentals prevail over fears of a global economic downturn affecting global demand.”
“The panic selling that’s occurring is very likely an over-exaggeration of the true fundamentals,” said Dennis Kissler, senior vice president for trading at BOK Financial Securities. “Near term, however, there’s a lot of unknowns, so you’re seeing a lot of funds unwind positions.”
Investors had been bullish on oil prices in recent weeks, expecting geopolitical tensions and supply constraints to keep the market tight. However, the combination of Trump’s aggressive trade policies and OPEC+’s decision to boost production has introduced fresh concerns about oversupply and weaker global demand.
Adding to the selloff, the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, announced they would increase oil production by 411,000 barrels per day starting in May.
While markets had anticipated some additional supply, the move was larger than expected, deepening losses in crude prices.
With global supply now expected to rise and demand potentially slowing due to economic uncertainty, traders are recalibrating their outlooks for oil prices heading into the second half of 2025.
Trump’s new tariff policies have raised concerns about the broader impact on economic growth. While energy imports were not specifically targeted in the latest round of tariffs, the indirect effects could be significant.
China, the world’s largest crude importer, now faces a 54% tariff on U.S. goods. If the Chinese economy slows as a result, its demand for oil could weaken, further pressuring global crude markets.
Before Thursday’s selloff, oil prices had been rising due to Trump’s pressure on Iran, Venezuela, and Russia to curb their oil exports. This rally had already driven U.S. gas prices to their highest levels since September, with the national average nearing $3.25 per gallon.
With oil prices now plunging, the outlook remains uncertain. If crude prices continue to fall, gas prices could stabilize or even decline. However, if global trade tensions persist and economic growth slows, oil demand could remain under pressure in the months ahead.
For now, investors are bracing for more volatility as geopolitical risks and market uncertainty take center stage.
