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Friday, May 8, 2020
InPlay Oil (IPOOF)(IPO:CA)
Making The Most of a Difficult Situation
As of April 24, 2020, Noble Capital Markets research on InPlay Oil is published under ticker symbols (IPOOF and IPO:CA). The price target is in USD and based on ticker symbol IPOOF. Research reports dated prior to April 24, 2020 may not follow these guidelines and could account for a variance in the price target. 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.
2020-1Q results above expectations. The company reported production of 4,784 boe/d slightly below our 5,000 boe/d estimate, with 304 boe/d lost due to cold weather. Production costs of C$14.67/boe were slightly above expectations due to the low production. Realized oil pricing held up better than expected ($46.17), but the impact will clearly be felt in future quarters. Adjusted Fund Flow of $3.4 million was above our $1.0 million estimate as were earnings $(0.07), excluding $1.41 in nonrecurring charges versus our estimate of $(0.11).
Tough times are coming. Keep an eye on debt. In April, management reduced salaries, deferred well workovers and sought concessions from vendors. Cost reductions are running 25-30% ahead of expectations but there will be an impact on production. Management indicated it will nominate oil sales in June at 20% of pre-curtailment capacity, or 2,300 boe/d, as it fills excess oil storage. These were difficult steps to take for a management team that prided itself on continual production growth. IPO has drawn down $52.6 million of its revolving credit facility. The facility will be reviewed on or…
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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.
