International Petroleum Corp. (IPC) Vancouver, BC, has cut its total forecast 2020 expenditure by $125-190 million with total estimated 2020 capital and decommissioning expenditures accounting for $85 million of the total forecast reduction. Total forecast 2020 operating costs will be reduced by $40-105 million, depending on production levels and commodity prices.
Total 2020 average net production guidance has been revised to 30,000-45,000 boe/d from 46,000-50,000 boe/d.
“All remaining discretionary 2020 expenditures have been deferred or cancelled and we have built into our forecast range the temporary curtailment of production from those fields that are not expected to generate positive cash flows at these low pricing levels,” said Mike Nicholson, IPC’s chief executive officer.
The production curtailments relate to oil production. The company currently forecasts positive cash flows from gas production in Canada.
In early March, the company closed a deal to acquire Granite Oil Corp., Calgary. Granite’s core asset, the Upper Bakken in southern Alberta—also known as the Alberta Bakken—stretches over a 30-mile fairway and produces medium gravity (30-32° API) crude oil (OGJ Online, Mar. 6, 2020). Some $10 million of the company’s previously guided $149 million budget reported in February was to be spent to grow assets acquired in the transaction.
Previous guidance allocated funds to continue oil drilling and gas optimization activities in the Suffield area, Onion Lake Thermal facilities work, and Blackrod project activities in Canada, as well as carry-over drilling expenditures on the Bertam field in Malaysia. In France, the company previously planned to continue finalizing Phase I of the Vert La Gravelle redevelopment project and planned to begin the Villeperdue West development project.
Undrawn amounts under existing credit facilities are currently $90 million. The company expects to fully fund its revised 2020 expenditure program from cash flows and current borrowing capacity.
International Petroleum Corp. is a member of the Lundin Group of companies (OGJ Online, Feb. 13, 2017).