InPlay Oil (IPOOF)
Another solid quarter with results generally in line with expectations
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.
Michael Heim, CFA, Senior Research Analyst, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
InPlay reported sold 2022-2Q results. Production (9,063 boe/d) was a bit below our expectations due to difficulties trucking out oil due to wet weather (55 boe/d reduction). On the other hand, oil and natural gas pricing was above expectations at C$116.74 (versus our C$105 estimate) and C$7.61 per mcf. (versus our C$6.90 per mcf. estimate). Notably, lifting and operating costs were a modest $12.28/boe down from first quarter LOE of $12.96. The net effect was adjusted fund flow (C$40.9m vs. C$38.7m) and net income (C$29.0m/$0.32 vs. C$27.8m/$0.32) in line with expectations.
Accelerated drilling program is showing signs of success. InPlay drilled five wells during the quarter. Drill time has been reduced to 10-11 days. InPlay did not indicate the cost to drill the wells, but we assume original drilling cost of C$2.5 million may be coming down. The company anticipates drilling three wells in the third quarter despite delays due to wet weather. …
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