Q4
International Petroleum Corporation
Audited Consolidated Financial
Statements
For the years ended December 31, 2025 and 2024
2
Contents
Report of Management 3
Report of Independent Auditor 4
Consolidated Statement of Operations 9
Consolidated Statement of Comprehensive Income/(Loss) 10
Consolidated Balance Sheet 11
Consolidated Statement of Cash Flow 12
Consolidated Statement of Changes in Equity 13
Notes to the Consolidated Financial Statements 14
Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
3
Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
REPORT OF MANAGEMENT
The accompanying consolidated financial statements of International Petroleum Corporation (“IPC” or the “Corporation” and,
together with its subsidiaries, the “Group”) and other information contained in the management’s discussion and analysis are the
responsibility of management and have been approved by the Board of Directors. The consolidated financial statements have been
prepared by management in accordance with IFRS Accounting Standards as issued by the International Accounting Standards
Board (“IFRS Accounting Standards”) as outlined in Part 1 of the Handbook of the Chartered Professional Accountants of Canada,
and include some amounts that are based on management’s estimates and judgment.
The Board of Directors carries out its responsibility for the consolidated financial statements principally through its Audit
Committee, which is comprised solely of independent directors. The Audit Committee reviews the Group’s annual consolidated
financial statements and recommends its approval to the Board of Directors. The Corporation’s auditors have full access to the
Audit Committee, with and without management being present. These consolidated financial statements have been audited by
PricewaterhouseCoopers LLP, Chartered Professional Accountants, in accordance with Canadian generally accepted auditing
standards on behalf of the shareholders.
(Signed) William Lundin (Signed) Christophe Nerguararian
Director, President and Chief Executive Officer Chief Financial Officer
Vancouver, Canada
February 10, 2026
4
PricewaterhouseCoopers LLP
Suncor Energy Centre, 111 5th Avenue South West, Suite 2900
Calgary, Alberta, Canada T2P 5L3
T.: +1 403 509 7500, F.: +1 403 781 1825
Fax to mail: ca_calgary_main_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
Independent auditor’s report
To the Shareholders of International Petroleum Corporation
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of International Petroleum Corporation and its subsidiaries (together, the
Corporation) as at December 31, 2025 and 2024, and its financial performance and its cash flows for the
years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting
Standards Board (IFRS Accounting Standards).
What we have audited
The Corporation’s consolidated financial statements comprise:
• the consolidated statement of operations for the years ended December 31, 2025 and 2024;
• the consolidated statement of comprehensive income/(loss) for the years then ended;
• the consolidated balance sheet as at December 31, 2025 and 2024;
• the consolidated statement of cash flow for the years then ended;
• the consolidated statement of changes in equity for the years then ended; and
• the notes to the consolidated financial statements, comprising material accounting policy information and
other explanatory information.
5
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the Corporation in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2025. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter How our audit addressed the key audit matter
The impact of oil and gas reserves on oil and gas
properties within net property, plant and equipment
(PP&E) for the Malaysia segment
Refer to note 1 – Corporate information and material
accounting policies, note 2 - Critical accounting estimates and
judgements, and note 9 - Property, plant and equipment to the
consolidated financial statements.
The Malaysia segment had $86.1 million of oil and gas
properties within PP&E, as at December 31, 2025, and
Our approach to addressing the matter included the following
procedures, among others:
• Tested how management determined the total proved and
probable oil and gas reserves for the Malaysia segment,
which included the following:
6
depletion charges were $24.2 million for the year then ended.
Oil and gas properties are depleted based on the year's
production in relation to the estimated total proved and
probable oil and gas reserves in accordance with the unit of
production method. Significant assumptions developed by
management used to determine the proved and probable oil
and gas reserves include expected production volumes, future
oil and gas prices, future development costs and future
production costs. Independent qualified reserves auditors
(management’s experts) review these estimates.
We considered this a key audit matter due to i) the judgments
by management, including the use of management’s experts,
when estimating the proved and probable oil and gas reserves
and ii) a high degree of auditor judgment, subjectivity and effort
in performing procedures relating to the significant
assumptions.
- The work of management’s experts was used in
performing the procedures to evaluate the
reasonableness of the proved and probable oil
and gas reserves used to determine the depletion
charges. As a basis for using this work, the
competence, capabilities and objectivity of
management’s experts were evaluated, the work
performed was understood and the
appropriateness of the work as audit evidence
was evaluated. The procedures performed also
included evaluation of the methods and
assumptions used by management’s experts,
tests of data used by management’s experts and
an evaluation of their findings.
- Evaluated the reasonableness of significant
assumptions used, including expected production
volumes, future development costs and future
production costs by considering current and past
performance of the Corporation and whether
these assumptions were consistent with evidence
obtained in other areas of the audit, as
applicable.
- Evaluated the reasonableness of future oil and
gas prices by comparing them with third party
industry forecasts.
• Recalculated the depletion charge for the Malaysia
segment.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
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In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate the
Corporation or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Corporation’s financial reporting process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with Canadian generally accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered
8
material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the consolidated financial statements, whether
due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness
of the Corporation’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Corporation’s ability to continue as a going concern. If we conclude that
a material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Corporation to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Corporation as a basis for forming an opinion on
9
the consolidated financial statements. We are responsible for the direction, supervision and review of the
audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the consolidated financial statements of the current period and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Kory Wickenhauser.
Chartered Professional Accountants
Calgary, Alberta
February 10, 2026
10
Consolidated Statement of Operations
For the years ended December 31, 2025 and 2024, AUDITED
USD Thousands
Note 2025 2024
Revenue
3
685,888 797,783
Cost of sales
Production costs
4
(427,623) (448,218)
Depletion and decommissioning costs
3,9
(122,749) (128,392)
Depreciation of other tangible fixed assets
3,9
(5,597) (8,933)
Exploration and business development costs
3
(1,799) (2,069)
Gross profit
3
128,120 210,171
Other income / (expense) 751 1,137
General and administrative expenses
(16,784) (16,055)
Profit before financial items
112,087 195,253
Finance income
5
18,088 17,721
Finance costs
6
(83,853) (77,430)
Net financial items
(65,765) (59,709)
Profit before tax
46,322 135,544
Income tax expense
7
(17,380) (33,325)
Net result
28,942 102,219
Net result attributable to:
Shareholders of the Parent Company 28,938 102,202
Non-controlling interest
4 17
28,942 102,219
Earnings per share – USD
1
16
0.25 0.82
Earnings per share fully diluted – USD
1
16
0.25 0.81
1
Based on net result attributable to shareholders of the Parent Company
See accompanying notes to the consolidated financial statements
11
Consolidated Statement of Comprehensive Income/(Loss)
For the years ended December 31, 2025 and 2024, AUDITED
USD Thousands
Note 2025 2024
Net result 28,942 102,219
Other comprehensive income/(loss)
Items that may be reclassified to profit or loss:
Reclassification of hedging (gains)/losses to profit or
loss
3, 6, 22
(14,650) (22,370)
Gain/(loss) on cash flow hedges 34,700 (35,498)
Income tax relating to these items (4,668) 13,753
Currency translation adjustments 50,651 (73,931)
Items that will not be reclassified to profit or loss:
Re-measurements on defined pension plan
20
654 (3,491)
Total comprehensive income/(loss)
95,629 (19,318)
Total comprehensive income/(loss) attributable to:
Shareholders of the Parent Company 95,620 (19,329)
Non-controlling interest
9 11
95,629 (19,318)
See accompanying notes to the consolidated financial statements
12
Consolidated Balance Sheet
As at December 31, 2025 and 2024, AUDITED
USD Thousands
Note December 31, 2025 December 31, 2024
ASSETS
Non-current assets
Exploration and evaluation assets
8
11,623 480
Property, Plant and Equipment
9
1,783,498 1,500,912
Right-of-use assets
10
3,070 3,103
Deferred tax assets
7
1,635 1,673
Derivative instruments
22, 23
1,285 –
Other non-current assets
11
46,216 48,665
Total non-current assets
1,847,327 1,554,833
Current assets
Inventories
12
19,990 20,073
Trade and other receivables
13
97,220 127,450
Derivative instruments
22, 23
1,644 3,219
Current tax receivables 4,411 1,514
Cash and cash equivalents
14
7,037 246,593
Total current assets
130,302 398,849
TOTAL ASSETS 1,977,629 1,953,682
LIABILITIES
Non-current liabilities
Financial liabilities
18, 22
38,709 1,719
Bonds
18, 22
442,324 439,862
Lease liabilities
10
2,956 2,728
Provisions
19
284,202 268,509
Deferred tax liabilities
7
122,013 92,754
Derivative instruments
22, 23
– 562
Total non-current liabilities
890,204 806,134
Current liabilities
Trade and other payables
21
149,708 176,371
Financial liabilities
18, 22
1,943 3,402
Derivative instruments
22, 23
422 19,869
Current tax liabilities 216 1,146
Lease liabilities
10
930 573
Provisions
19
7,029 6,717
Total current liabilities
160,248 208,078
EQUITY
Shareholders’ equity 927,029 939,315
Non-controlling interest
148 155
Net shareholders’ equity
927,177 939,470
TOTAL EQUITY AND LIABILITIES
1,977,629 1,953,682
Approved by the Board of Directors
(Signed) C. Ashley Heppenstall (Signed) William Lundin
Director Director
See accompanying notes to the consolidated financial statements
13
Consolidated Statement of Cash Flow
For the years ended December 31, 2025 and 2024, AUDITED
USD Thousands Note
2025 2024
Cash flow from operating activities
Net result 28,942 102,219
Depletion, depreciation and amortization
3, 9,10
129,754 138,566
Write-off of exploration costs
8
714 1,419
Income tax
7
17,380 33,325
Amortization of capitalized financing fees
6
4,370 2,057
Foreign currency exchange loss/(gain)
6
(14,654) 23,427
Interest income
5
(3,160) (17,721)
Interest expense
6
41,983 35,905
Unwinding of asset retirement obligation discount
6
16,498 14,568
Change in pension liability
20
816 682
Share-based costs
17
9,562 8,539
Changes in working capital 10,449 (47,092)
Decommissioning costs paid
19
(5,967) (7,711)
Other payments
19
(2,448) (1,997)
Net income taxes paid (3,500) (6,362)
Interest received 3,620 18,619
Interest paid (41,317) (32,821)
Other
954 465
Net cash flow from operating activities
193,996 266,087
Cash flow used in investing activities
Investment in oil and gas properties
9
(333,206) (432,794)
Investment in exploration and evaluation assets
8
(12,362) (1,919)
Disposal of assets
9
– 221
Investment in other tangible fixed assets
(640) (363)
Net cash (outflow) from investing activities
(346,208) (434,855)
Cash flow from financing activities
Proceeds from borrowings
18
38,709 –
Repayment of borrowings
18
(3,178) (3,910)
Bonds issuance proceeds
18
450,000 –
Repayment of Bonds
18
(450,000) –
Paid financing fees (8,765) –
Repurchase of own shares (“NCIB”)
15
(100,264) (102,188)
Lease payment (976) (964)
Dividend paid
(16) (41)
Net cash (outflow) from financing activities
(74,490) (107,103)
Change in cash and cash equivalents (226,702) (275,871)
Cash and cash equivalents at the beginning of the
year
246,593 517,074
Currency exchange difference in cash and cash
equivalents
(12,854) 5,390
Cash and cash equivalents at the end of the year
7,037 246,593
See accompanying notes to the consolidated financial statements
14
Consolidated Statement of Changes in Equity
For the years ended December 31, 2025 and 2024, AUDITED
USD Thousands
Share
capital and
premium
Retained
earnings
CTA
IFRS 2
reserve
MTM
reserve
Pension
reserve
Total
Non-
controlling
interest
Total
equity
Balance at January 1, 2025 141,173 875,952 (81,192) 18,092 (13,138) (1,572) 939,315 155 939,470
Net result – 28,938 – – – – 28,938 4 28,942
Re-measurements on defined
pension plan
– – – – – 654 654 – 654
Cash flow hedges – – – – 15,382 – 15,382 – 15,382
Currency translation difference
– – 50,598 867 (331) (488) 50,646 5 50,651
Total comprehensive income
– 28,938 50,598 867 15,051 166 95,620 9 95,629
Repurchase of own shares
1
(100,264) – – – – – (100,264) – (100,264)
Dividend Distribution – – – – – – – (16) (16)
Share based costs – – – 9,562 – – 9,562 – 9,562
Share based payments
2
– (8,198) – (9,006) – – (17,204) – (17,204)
Balance at December 31, 2025
40,909 896,692 (30,594) 19,515 1,913 (1,406) 927,029 148 927,177
1
See Note 15
2
The third instalment of IPC RSP 2022 awards, the second instalment of IPC RSP 2023 awards, the first instalment of IPC RSP 2024 awards and
the IPC PSP 2022 awards vested on February 1, 2025, at a price of CAD 18.89 per award. The difference between the value at vesting date and
at grant (respectively CAD 9.09 per award, CAD 14.24 per award, CAD 14.82 per award and CAD 8.40 per award) was offset against retained
earnings.
USD Thousands
Share
capital and
premium
Retained
earnings
CTA
IFRS 2
reserve
MTM
reserve
Pension
reserve
Total
Non-
controlling
interest
Total
equity
Balance at January 1, 2024 243,361 795,490 (10,745) 18,838 31,344 1,786 1,080,074 185 1,080,259
Net result – 102,202 – – – – 102,202 17 102,219
Re-measurements on defined
pension plan
– – – – – (3,491) (3,491) – (3,491)
Cash flow hedges – – – – (44,115) – (44,115) – (44,115)
Currency translation difference
– – (70,447) (3,244) (367) 133 (73,925) (6) (73,931)
Total comprehensive income
– 102,202 (70,447) (3,244) (44,482) (3,358) (19,329) 11 (19,318)
Repurchase of own shares
1
(102,188) – – – – – (102,188) – (102,188)
Dividend distribution – – – – – – – (41) (41)
Share based costs – – – 8,629 – – 8,629 – 8,629
Share based payments
2
– (21,740) – (6,131) – – (27,871) – (27,871)
Balance at December 31, 2024
141,173 875,952 (81,192) 18,092 (13,138) (1,572) 939,315 155 939,470
1
See Note 15
2
The third instalment of IPC RSP 2021 awards, the second instalment of IPC RSP 2022 awards, the first instalment of IPC RSP 2023 awards and
the IPC PSP 2021 awards vested on February 1, 2024, at a price of CAD 14.90 per award. The difference between the value at vesting date and
at grant (respectively CAD 4.07 per award, CAD 9.09 per award, CAD 14.27 per award and CAD 3.61 per award) was offset against retained
earnings.
See accompanying notes to the consolidated financial statements
15
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
1. CORPORATE INFORMATION AND MATERIAL ACCOUNTING POLICIES
A. The Group
International Petroleum Corporation (“IPC” or the “Corporation” and, together with its subsidiaries, the “Group”) is in the business
of exploring for, developing and producing oil and gas. IPC holds a portfolio of oil and gas production assets and development
projects in Canada, Malaysia and France with exposure to growth opportunities.
The Corporation’s common shares are listed on the Toronto Stock Exchange in Canada and the Nasdaq Stockholm Exchange in
Sweden. The Corporation is incorporated and domiciled in British Columbia, Canada under the Business Corporations Act. The
address of its registered office is Suite 3500, 1133 Melville Street, Vancouver, BC V6E 4E5, Canada and its business address is
Suite 2800, 1055 Dunsmuir Street, Vancouver, BC V7X 1L2, Canada.
B. Basis of preparation
The consolidated financial statements have been prepared in accordance with IFRS Accounting Standards as issued by
the International Accounting Standards Board (“IFRS Accounting Standards”).
These consolidated financial statements are presented in United States Dollars (USD), which is the Group’s presentation and
functional currency. The consolidated financial statements have been prepared on a historical cost basis, except for items that are
required to be accounted for at fair value as detailed in the Group’s accounting policies. Intercompany transactions and balances
have been eliminated.
These consolidated financial statements have been approved by the Board of Directors of IPC and authorized for issuance on
February 10, 2026.
C. Change in presentation
Certain comparative figures have been reclassified to conform with the financial statements presentation in the current year.
D. Going concern
The Group’s consolidated financial statements for the year ended December 31, 2025, have been prepared on a going concern
basis, which assumes that the Group will be able to realize its assets and discharge its liabilities in the normal course of business
as they become due in the foreseeable future.
E. Changes in accounting policies and disclosures
During the year ended December 31, 2025, the Group applied the amended accounting standards, interpretations and annual
improvement points that are effective as of January 1, 2025. The application of the amendments did not have a material impact on
the consolidated financial statements.
There are no plans for the early adoption of published standards, interpretations, or amendments prior to their mandatory effective
date. The Group does not expect that other changes in IFRS Accounting Standards will have a material impact on the consolidated
financial statements.
F. Future accounting changes
Recent amendments to IFRS 9 and related IFRS 7 disclosure requirements address the settlement of financial liabilities via
electronic payment systems and refine the assessment of contractual cash flow characteristics for financial assets. The
amendments are effective for annual reporting periods beginning on or after January 1, 2026. These changes are not expected to
have a material impact on the financial statements.
IFRS 18 replaces IAS 1 and introduces expanded requirements for how financial information is presented and disclosed. The
standard adds new subtotals, categories for income and expenses, and mandates disclosure of management performance
measures. It also enhances rules around aggregation and disaggregation. Adoption is retrospective, and the Corporation is
currently assessing system changes, preparing draft disclosures, and planning comparative restatements ahead of the 2027
effective date.
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Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
G. Basis of Consolidation
Subsidiaries
Subsidiaries are all entities over which the Group has control and are consolidated. The Corporation controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through
its power over the entity.
The non-controlling interest in a subsidiary represents the portion of the subsidiary not owned by Group companies. The equity of
the subsidiary relating to the non-controlling shareholders is shown as a separate item within changes in net equity.
Inter-company transactions, balances, income and expenses on transactions between companies are eliminated. Profits and losses
resulting from intercompany transactions that are recognized in assets are also eliminated.
H. Joint Arrangements
Oil and gas operations of the Group are conducted as co-licensees in unincorporated joint ventures with other companies and are
classified as joint operations. The consolidated financial statements reflect the relevant proportions of production, capital costs,
operating costs and current assets and liabilities of the joint operation applicable to the Corporation’s interests.
I. Foreign Currency Translation
Transactions and balances
Monetary assets and liabilities denominated in foreign currencies are translated at the rates of exchange prevailing at the balance
sheet date and foreign exchange currency differences are recognized in the consolidated statement of operations. Transactions
in foreign currencies are translated at exchange rates prevailing at the transaction date. Foreign exchange gains and losses are
presented within finance income and costs in the consolidated statement of operations.
Functional and presentation currency
Items included in the financial statements of each of the operational entities are measured using the currency of the primary
economic environment in which the entity operates (the “functional currency”). The functional currency of the Corporation’s
operational entities are the USD, CAD, MYR and EUR. The consolidated financial statements are presented in USD which is the
Corporation’s presentation currency. The balance sheets and income statements of foreign companies are translated using the
current rate method. All assets and liabilities are translated at the balance sheet date rates of exchange, whereas the income
statements are translated at average rates of exchange for the year, except for transactions where it is more relevant to use the
rate of the day of the transaction. The translation differences which arise are recorded directly in net assets.
Exchange rates for the relevant currencies of the Group with respect to the US Dollar are as follows:
December 31, 2025 December 31, 2024Average Year end Average Year end1 EUR equals USD 1.1293 1.1750 1.0821 1.03891 USD equals CAD 1.3975 1.3692 1.3698 1.43881 USD equals MYR 4.2791 4.0580 4.5759 4.4715
J. Classification of assets and liabilities
Non-current assets, long-term liabilities and provisions consist of amounts that are expected to be recovered or paid more than
twelve months after the balance sheet date. Current assets and current liabilities consist solely of amounts that are expected to be
recovered or paid within twelve months after the balance sheet date.
K. Exploration and evaluation assets
Costs directly associated with an exploration well are capitalized until the determination of reserves is evaluated. If it is determined
that a commercial discovery has not been achieved or if there is a decision to not continue with a field specific exploration
program, the costs will be expensed at the time the decision is made. During the exploration and development phases, no
depletion is charged. The field will be transferred from the non-producing assets to the producing assets within oil and gas
properties once production commences and accounted for as a producing asset.
L. Property, Plant and Equipment
Oil and gas properties
Oil and gas properties are recorded at historical cost less depletion. All costs for acquiring concessions, licences or interests in
production sharing contracts and for the survey, drilling and development of such interests are capitalized on a field area cost
center basis. Routine maintenance costs for producing assets are expensed to the statement of operations when they occur.
17
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
Oil and gas properties are depleted based on the year’s production in relation to estimated total proved and probable reserves of
oil and gas in accordance with the unit of production method. Depletion of a field area is charged to the statement of operations
through cost of sales once production commences.
Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated
with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current
economic conditions, operating methods and governmental regulations. Proved reserves can be categorized as developed or
undeveloped. If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence
that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90 percent probability that the
quantities actually recovered will equal or exceed the estimates.
Probable reserves are those unproved reserves which analysis of geological and engineering data suggests are more likely than
not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50 percent probability that
the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves.
Proceeds from the sale or farm-out of oil and gas concessions in the exploration stage are offset against the related capitalized
costs of each cost center with any excess of net proceeds over the costs capitalized included in the statement of operations. In
the event of a sale in the exploration stage, any deficit is included in the statement of operations.
When there are facts and circumstances that suggest that the net book value of capitalized costs within each field area cost
center is higher than anticipated future net cash flow from oil and gas reserves attributable to the Corporation’s interest in the
related field areas, the Corporation performs an assessment as to whether an asset may be impaired. Management determines
the recoverable amounts of property, plant and equipment based on the higher of fair value less costs of disposal and value in use
using estimated future discounted net cash flows of proved and probable oil and gas reserves. The Corporation’s estimates of
proved and probable oil and gas reserves used in the calculations for impairment tests and accounting for depletion are reviewed
annually by Management’s experts, specifically independent qualified reserves auditor (“IQRE”).
The recoverable amount of the asset or cash-generating unit (“CGU”) is estimated as the the higher of fair value less costs of
disposal (“FVLCOD”) and value in use (“VIU”). In determining FVLCOD, recent market transactions are considered, if available. In
the absence of such transactions, FVLCOD is estimated based on the discounted after-tax cash flows of reserves using forward
prices, costs to develop and operating costs, consistent with IPC’s IQREs. Value in use is estimated by discounting future cash
flows expected to arise from the continuing use of a CGU or asset, to their present value, using a discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset. When the recoverable amount is less
than the carrying value an impairment loss is recognized with the expensed charge to the statement of operations. If indications
exist that previously recognized impairment losses no longer exist or are decreased, the recoverable amount is reversed. When
a previously recognized impairment loss is reversed the carrying amount of the asset is increased to the estimated recoverable
amount but the increased carrying amount may not exceed the carrying amount after depreciation that would have been
determined had no impairment loss been recognized for the asset in prior years. If the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets, the asset is tested as part of a CGU, which is the smallest
identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or
groups of assets.
Other tangible fixed assets
Other tangible fixed assets are stated at cost less accumulated depreciation. The cost includes the original purchase price of the
asset and the costs attributable to bringing the asset to its working condition for its intended use. Depreciation is based on cost
and is calculated on a straight line basis over the estimated economic life of 3 to 5 years for office equipment and other assets.
The Floating Production Storage and Offloading (“FPSO”) located on the Bertam field, Malaysia, has been depreciated to its
residual value.
Additional costs to existing assets are included in the assets’ net book value or recognized as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The net book value of any replaced parts is written off. Other additional expenses are deemed to be repair and
maintenance costs and are charged to the statement of operations when they are incurred.
The net book value is written down immediately to its recoverable amount when the net book value is higher. The recoverable
amount is the higher of an asset’s fair value less cost of disposal and value in use. The assets’ residual values and useful lives are
reviewed, and adjusted if appropriate, at the end of each reporting period.
M. Leases
The Group leases various offices, warehouses, equipment and cars. Rental contracts are typically made for fixed periods of 3 to
5 years but may have extension options. Lease terms are negotiated on an individual basis and contain a wide range of different
terms and conditions.
Right-of-use assets and corresponding liabilities are recognized when the leased asset is available for use by the Group. Each
lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the period so
as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is
depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis.
18
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the fixed and variable lease payments and the exercise price of the purchase option. The lease payments are discounted
using the incremental borrowing rate and are classified as finance leases. The right-of-use assets are measured at cost comprising
the amount of the initial measurement of the lease liability, any lease payments made and any initial direct costs.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-line basis as an expense
in profit or loss.
N. Financial Instruments
Financial assets and financial liabilities are recognized on the consolidated balance sheet on the trade date, the date on which
the Group becomes a party to the contractual provisions of the financial instrument. All financial instruments are required to
be classified and measured at fair value on initial recognition. Measurement in subsequent periods is dependent upon the
classification of the financial instrument. The Group classifies its financial instruments in the following categories:
Financial Assets at Amortized Cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and
interest are measured at amortized cost. The Group’s loans and receivables consist of fixed or determined cash flows related
solely to principal and interest amounts or contractual sales of oil. The Group’s intent is to hold these receivables until cash flows
are collected. Loans and receivables are recognized initially at fair value, net of any transaction costs incurred and subsequently
measured at amortized cost.
Financial Assets at Fair Value through Profit or Loss (“FVTPL”)
Financial assets measured at FVTPL are assets which do not qualify as financial assets at amortized cost or at fair value through
other comprehensive income.
Financial Liabilities at Amortized Cost
Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL, or the Group has opted
to measure them at FVTPL. Borrowings and accounts payable are recognized initially at fair value, net of any transaction costs
incurred, and subsequently at amortized cost using the effective interest method.
Financial Liabilities at FVTPL
Financial liabilities measured at FVTPL are liabilities which include embedded derivatives and cannot be classified as amortized
cost.
Impairment of Financial Assets
The measurement of impairment of financial assets is based on the expected credit losses model. For the trade and other
receivables, the Group applies the simplified approach which requires the use of the lifetime expected loss provision for all trade
receivables. In estimating the lifetime expected loss provision, the Group considered historical industry default rates as well as
credit ratings of major customers. Additional disclosure related to the Group’s financial assets is included in Note 22.
O. Derivative Financial Instruments and Hedging Activities
Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured
to their fair value. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either hedges of a
particular risk associated with a recognized asset or liability or a highly probable forecasted transaction, hedges of the fair value of
recognized assets and liabilities or a firm commitment, or hedges of a net investment in a foreign operation.
The Group documents at the inception of the transaction the relationship between hedging instruments and the hedged items, as
well as its risk management objectives and strategy for undertaking various hedging transactions. The Group also documents its
assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions
are highly effective in offsetting changes in fair values or cash flows of the hedged items. The fair values of various derivative
financial instruments used for hedging purposes are disclosed in Note 22. Movements on the hedging reserve is reflected in other
comprehensive income. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining
maturity of the hedged item is more than twelve months and as a current asset or liability when the remaining maturity of the
hedged item is less than twelve months.
Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in
other comprehensive income. The gain or loss relating to the ineffective portion, if any, is recognized immediately within statement
of operations. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects
profit or loss. When a hedging instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting,
any cumulative gain or loss existing in equity at that time remains in equity and is recognized when the forecast transaction is
ultimately recognized in the statement of operations. When a forecasted transaction is no longer expected to occur, the cumulative
gain or loss that was reported in equity is immediately recognized in the statement of operations.
19
P. Inventories
Inventories of consumable well supplies are stated at the lower of cost and net realizable value, cost being determined on a
weighted average cost basis. Net realizable value is the estimated selling price in the ordinary course of business, less applicable
variable selling expenses. Inventories of hydrocarbons are stated at the lower of cost and net realizable value. Under or overlifted
positions of hydrocarbons are valued at market prices prevailing at the balance sheet date. An underlift of production from a field
is included in the current receivables and valued at the reporting date spot price or prevailing contract price and an overlift of
production from a field is included in the current liabilities and valued at the reporting date spot price or prevailing contract price.
A change in the over or underlift position is reflected in the statement of operations as revenue.
Q. Cash and cash equivalents
Cash and cash equivalents include cash at bank and cash in hand.
R. Provisions
A provision is reported when the Group has a legal or constructive obligation as a consequence of a past event and when it is
more likely than not that an outflow of resources is required to settle the obligation and a reliable estimate can be made of the
amount.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a discount
rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in
the provision due to passage of time is recognized as financial expense.
On fields where there is an obligation to contribute to asset retirement obligation costs, a provision is recorded to recognize the
future commitment. An asset is created, as part of the oil and gas property, to represent the discounted value of the anticipated
asset retirement obligation liability and depleted over the life of the field on a unit of production basis. The corresponding
accounting entry to the creation of the asset recognizes the discounted value of the future liability. The discount applied to
the anticipated asset retirement obligation liability is subsequently released over the life of the field and is charged to financial
expenses. Changes in asset retirement obligation costs and reserves are treated prospectively and consistent with the treatment
applied upon initial recognition.
S. Revenue and Other Operating Revenue
Revenue associated with the sale of crude oil and natural gas is measured based on the consideration specified in a contract with
a customer and excludes amounts collected on behalf of third parties. The Group recognizes revenue when it transfers control of
the product or service to a customer, which is generally when title passes from the Group to its customer. The Group satisfies its
performance obligations in contracts with customers upon the delivery of crude oil and natural gas, which is generally at a point in
time.
Royalties payments to governments and other mineral interest owners are recognized as a cost in the revenue section.
Production and sales taxes directly attributable to fields, including export duties, are expensed in the statement of operations
and classified as direct production taxes included within production costs. Production taxes payable in cash are accrued in the
accounting period in which the liability arises.
T. Employee Benefits
Short-term employee benefits
Short-term employee benefits such as salaries, social premiums and holiday pay, are expensed when incurred.
Pension obligations
The pension obligations consist of defined contribution plans for all companies within the Group except for one Swiss subsidiary,
International Petroleum SA. A defined contribution plan is a pension plan under which the Group pays fixed contributions. The
Group has no further payment obligations once the contributions have been paid. The contributions are recognized as an expense
when they are due.
International Petroleum SA has a defined benefit pension plan that is managed through a private pension plan. Independent
actuaries determine the cost of the defined benefit plan on an annual basis, and the subsidiary pays the annual insurance premium.
The pension plan provides benefits coverage to the employees of International Petroleum SA in the event of retirement, death or
disability. International Petroleum SA and its employees jointly finance retirement and risk benefits. Employees of International
Petroleum SA pay 40% of the savings contributions, of the risk contributions and of the cost contributions and International
Petroleum SA contributes the difference between the total of all required pension plan contributions and the total of all employees’
contributions.
Share-based payments
The Group operates an equity-settled, share-based compensation plan under which the entity receives services from employees,
directors and officers as consideration for equity instruments of the Corporation. Equity-settled share-based payments are
recognized in the statement of operations as expenses during the vesting period and as equity in the balance sheet. The option
is measured at fair value at the date of the grant using an appropriate options pricing model and is charged to the statement of
operations over the vesting period without revaluation of the value of the option.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
20
U. Taxation
The components of tax are current and deferred. Tax is recognized in the statement of operations, except to the extent that it
relates to items recognized in other comprehensive income or directly in equity, in which case it is accounted for consistently with
the related item.
Current tax is tax that is to be paid or received for the year in question and also includes adjustments of current tax attributable to
previous periods.
Deferred income tax is a non-cash charge provided, using the liability method, on temporary differences arising between the
tax bases of assets and liabilities and their carrying values. Temporary differences can occur for example where investment
expenditure is capitalized for accounting purposes but the tax deduction is accelerated or where asset retirement obligation
costs are provided for in the financial statements but not deductible for tax purposes until they are actually incurred. However,
the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a
business combination that at the time of the transaction affects neither accounting nor taxable profit nor loss.
Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the
timing of the reversal of the temporary difference is controlled by the Corporation and it is probable that the temporary difference
will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or
substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized
or the deferred income tax liability is settled. Deferred income tax assets are recognized to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilized.
Deferred tax assets are offset against deferred tax liabilities in the balance sheet where they relate to the same jurisdiction and
there is a legally enforceable right to offset.
V. Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker,
which, due to the unique nature of each country’s operations, commercial terms or fiscal environment, is at a country level.
W. Business Combinations
Acquisitions of businesses are accounted for using the purchase method of accounting whereby all identifiable assets and
liabilities are recorded at their fair values as at the date of acquisition. Any excess purchase price over the aggregate fair value of
net assets is recorded as goodwill. Goodwill is identified and allocated to CGU, or groups of CGUs, that are expected to benefit
from the synergies of the acquisition. Goodwill is not amortized. Any excess of the aggregate fair value of net assets over the
purchase price is recognized in the consolidated statement of operations.
A CGU to which goodwill has been allocated is tested for impairment at least annually or when events or circumstances indicate
that an assessment for impairment is required. For goodwill arising on an acquisition in a financial year, the CGU to which the
goodwill has been allocated is tested for impairment before the end of that financial year.
When the recoverable amount of the CGU is less than the carrying amount of that CGU, the impairment loss is allocated to
reduce the carrying amount of any goodwill allocated to that CGU first, and then to the other assets of that CGU pro rata on the
basis of the carrying amount of each asset in the CGU. Any impairment loss for goodwill is recognized directly in the consolidated
statement of earnings. An impairment loss for goodwill is not reversed in subsequent periods.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the gain or loss on disposal.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
21
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
In connection with the preparation of the consolidated financial statements, the Group’s management has made assumptions
and estimates about future events and applied judgments that affect the reported values of assets, liabilities, revenues, expenses
and related disclosures. The assumptions, estimates and judgments are based on historical experience, current trends and other
factors that management believes to be relevant at the time the consolidated financial statements are prepared. On a regular
basis, management reviews the accounting policies, assumptions, estimates and judgments to ensure that the consolidated
financial statements are presented fairly in accordance with IFRS Accounting Standards. However, because future events and
their effects cannot be determined with certainty, actual results could differ from these assumptions and estimates, and such
differences could be material.
Management believes the following critical accounting policies affect the more significant judgments and estimates used in the
preparation of the consolidated financial statements:
Oil and gas reserves, impairment and asset retirement obligations
The accounting for oil and gas assets requires significant estimates and judgements, particularly in relation to reserves, impairment
and asset retirement obligations. Estimates of proved and probable oil and gas reserves, prepared using standard recognized
evaluation techniques and reviewed by independent qualified reserves auditors, are fundamental to impairment testing,
depletion calculations under the unit of production method, and the timing and measurement of asset retirement obligations.
These estimates are based on management’s assumptions regarding expected production volumes, future oil and gas prices,
development and production costs, and economic factors as such oil price and inflation.
Impairment tests are performed when there are indicators of impairment. Key assumptions in the impairment models include oil
and gas reserve estimates, forward price curves, long-term cost assumptions and the discount rate, all of which are subject to
change as new information becomes available or economic conditions evolve.
Provisions for asset retirement obligations are based on estimates of future decommissioning and restoration costs, reflecting
current legal and constructive requirements, available technology and prevailing price levels. Actual cash outflows may differ from
estimates due to changes in legislation, technical requirements or cost levels, and therefore these provisions are reviewed on a
regular basis.
Deferred income tax assets
The Group accounts for differences that arise between the carrying amount of assets and liabilities and their tax bases in
accordance with IAS 12, Income Taxes, which requires deferred income tax assets only to be recognized to the extent that is
probable that future taxable profits will be available against which the temporary differences can be utilized. Management
estimates future taxable profits based on the financial models used to value its oil and gas properties. Any change to the estimates
and assumptions used for the key operational and financial variables used within the business models could affect the amount of
deferred income tax assets recognized.
The effects of changes in estimates do not give rise to prior year adjustments and are treated prospectively over the estimated
remaining commercial reserves of each field. While the Group uses its best estimates and judgement, actual results could differ
from these estimates.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
22
3. SEGMENT INFORMATION
The Group operates within several geographical areas. Operating segments are reported at a country level which is consistent with
the internal reporting provided to the CEO, who is the chief operating decision maker.
The following tables present segment information regarding: revenue, production costs, other operating costs and gross profit/
(loss). The Group derives its revenue from contracts with customers primarily through the transfer of oil and gas at a point in time.
In addition, certain identifiable asset segment information is reported in Note 8 and 9.
2025USD ThousandsCanada Malaysia France Other TotalCrude oil 589,415 66,330 46,301 – 702,046NGLs 690 – – – 690Gas 39,190 – – – 39,190Sales of oil and gas 629,295 66,330 46,301 – 741,926Change in under/over lift position – – 5,349 – 5,349Royalties (83,229) – (2,976) – (86,205)Hedging settlement 23,679 – – – 23,679Other operating revenue – – 776 363 1,139Revenue 569,745 66,330 49,450 363 685,888Operating costs (217,059) (41,348) (33,962) – (292,369)Cost of blending (134,630) – – – (134,630)Change in inventory position (428) 247 (443) – (624)Depletion and decommissioning costs (87,449) (24,194) (11,106) – (122,749)Depreciation of other tangible fixed assets – (5,597) – – (5,597)Exploration and business development costs – (698) (15) (1,086) (1,799)Gross profit /(loss) 130,179 (5,260) 3,924 (723) 128,120
2024USD ThousandsCanada Malaysia France Other TotalCrude oil 678,094 105,445 70,948 – 854,487NGLs 927 – – – 927Gas 34,040 – – – 34,040Sales of oil and gas 713,061 105,445 70,948 – 889,454Change in under/over lift position – – 41 – 41Royalties (111,114) – (4,285) – (115,399)Hedging settlement 22,370 – – – 22,370Other operating revenue – – 914 403 1,317Revenue 624,317 105,445 67,618 403 797,783Operating costs (225,775) (32,771) (35,464) – (294,010)Cost of blending (152,735) – – – (152,735)Change in inventory position (594) (1,024) 145 – (1,473)Depletion and decommissioning costs (88,583) (27,481) (12,328) – (128,392)Depreciation of other tangible fixed assets – (8,933) – – (8,933)Exploration and business development costs – (1,407) (12) (650) (2,069)Gross profit/(loss) 156,630 33,829 19,959 (247) 210,171
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
23
Assets LiabilitiesUSD Thousands2025 2024 2025 2024Canada 2,129,806 2,010,107 1,329,423 1,226,081Malaysia 156,911 165,701 125,376 104,290France 169,609 158,518 91,082 83,581Other 191,081 205,293 174,349 186,197Intercompany balance elimination(669,778) (585,937) (669,778) (585,937)Total Assets / Liabilities 1,977,629 1,953,682 1,050,452 1,014,212Shareholders’ equity – – 927,029 939,315Non-controlling interest– – 148 155Total equity for the Group– – 927,177 939,470Total consolidated1,977,629 1,953,682 1,977,629 1,953,682
4. PRODUCTION COSTS
USD Thousands2025 2024Cost of operations249,230 251,070 Tariff and transportation expenses 38,752 38,195 Direct production taxes4,387 4,745 Operating costs292,369 294,010 1Cost of blending134,630 152,735 Change in inventory position624 1,473 Total production costs427,623 448,218 1 In Canada, oil production is blended with purchased condensate diluent to meet pipeline specifications. Cost of blending represents the contracted purchase of diluent used for blending.
5. FINANCE INCOME
USD Thousands2025 2024Foreign exchange gain, net 14,654 –Interest income 3,160 17,721Other274 –Total finance income18,088 17,721
6. FINANCE COSTS
USD Thousands2025 2024Foreign exchange loss, net – 12,654Interest expense 41,983 35,905Unwinding of asset retirement obligation discount 16,498 14,568Amortization of capitalized financing fees 4,370 2,057Loan commitment fees 894 837Currency hedge losses 9,029 10,7731Other financial costs11,079 636Total finance costs83,853 77,4301 Includes an amount of USD 9.8 million related to the call option costs of the previous USD 450 million senior unsecured bonds.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
24
7. INCOME TAX
USD Thousands2025 2024Current tax (9) (8,313)Deferred tax(17,371) (25,012)Total tax expense(17,380) (33,325)
The tax on the Group’s profit before tax differs from the theoretical amount that would arise using the tax rate of Canada as follows:
USD Thousands2025 2024Profit before tax 46,322 135,544Tax calculated at the corporate tax rate in Canada 25% (11,581) (33,886)Effect of foreign and domestic tax rates 2,240 6,473Tax effect of recognition / (derecognition) of unrecorded tax losses (8,253) (6,216) Tax effect due to true-up of provision to prior year tax filings 368 790Other(154) (486)Total tax(17,380) (33,325)
Specification of deferred tax assets and tax liabilities
1
USD Thousands2025 2024Unused tax loss carry forward 65,825 40,042 Derivative hedges – 3,933 Other6,858 10,302Deferred tax assets72,683 54,277Accelerated allowances 192,464 145,358Derivative hedges597 –Deferred tax liabilities193,061 145,358Deferred taxes, net (120,378) (91,081)1 The specification of deferred tax assets and tax liabilities does not agree to the face of the balance sheet due to the netting off of balances in the balance sheet when they relate to the same jurisdiction.
The deferred tax liabilities consist of accelerated allowances, being the difference between the book and the tax value of oil and
gas properties and site restoration provisions. The deferred tax liabilities will be released over the life of the oil and gas assets as
the book value is depleted for accounting purposes.
Deferred tax assets in relation to tax loss carried forwards are only recognized in so far that there is a reasonable certainty as to
the timing and the extent of their realization. The recognized unused tax loss carry forward mainly relates to Canada. The Group
has concluded that the deferred assets will be recoverable using the estimated future taxable income based on the approved
business plans and budgets.
Unrecognized tax losses
The Corporation has Canadian tax loss carry forwards of approximately USD 116 million (USD 92 million in 2024) and Dutch
tax loss carry forwards of approximately USD 240 million (USD 240 million in 2024). The Canadian tax losses can be carried
forward and utilized for up to 20 years and the Dutch tax losses can be carried forward indefinitely. A deferred tax asset of USD
90 million (USD 84 million in 2024) relating to the tax loss carry forwards has not been recognized as at 31 December 2025 due
to the uncertainty as to the timing and the extent of the tax loss carry forward utilisation. This treatment is consistent with the
comparative year’s accounts.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
25
8. EXPLORATION AND EVALUATION ASSETS
USD ThousandsCanada Malaysia France TotalCostJanuary 1, 2025 480 – – 480Acquisitions 7,311 – – 7,311Additions 5,036 – 15 5,051Write-off – – (15) (15)Reclassification (1,305) – – (1,305)Currency translation adjustments 101 – – 101Net book value December 31, 2025 11,623 – – 11,623
USD ThousandsCanada Malaysia France TotalCostJanuary 1, 2024 – – – –Additions 500 1,407 12 1,919Write-off – (1,407) (12) (1,419)Currency translation adjustments (20) – – (20)Net book value December 31, 2024 480 – – 480
9. PROPERTY, PLANT AND EQUIPMENT
USD Thousands20252024Oil and gas properties 1,772,278 1,484,487Other tangible fixed assets 11,220 16,425Property, Plant and Equipment 1,783,498 1,500,912
Oil and gas properties
USD ThousandsCanada Malaysia France TotalCostJanuary 1, 2025 1,767,580 599,734 405,129 2,772,443Additions 286,570 40,877 5,759 333,206Change in estimates (9,845) (30) 1,959 (7,916)Reclassification 1,305 – – 1,305Currency translation adjustments96,000 – 52,775 148,775December 31, 20252,141,610 640,581 465,622 3,247,813Accumulated depletionJanuary 1, 2025 (451,017) (530,315) (306,624) (1,287,956)Depletion charge for the year (87,449) (24,194) (11,106) (122,749)Currency translation adjustments(24,749) – (40,081) (64,830)December 31, 2025(563,215) (554,509) (357,811) (1,475,535)Net book value December 31, 20251,578,395 86,072 107,811 1,772,278
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
26
USD ThousandsCanada Malaysia France TotalCostJanuary 1, 2024 1,465,010 591,123 436,693 2,492,826Additions 412,284 17,035 3,475 432,794Disposals (94) – – (94)Change in estimates 36,995 (8,424) (9,018) 19,553Reclassification (10,773) – – (10,773)Currency translation adjustments(135,842) – (26,021) (161,863)December 31, 20241,767,580 599,734 405,129 2,772,443Accumulated depletionJanuary 1, 2024 (398,288) (502,834) (313,282) (1,214,404)Depletion charge for the year (88,583) (27,481) (12,328) (128,392)Disposals 94 – – 94Currency translation adjustments35,760 – 18,986 54,746December 31, 2024(451,017) (530,315) (306,624) (1,287,956)Net book value December 31, 20241,316,563 69,419 98,505 1,484,487
Impairment test
As of December 31, 2025, the Group determined that no internal or external indicators of impairment existed on its oil and gas
properties; therefore, the performance of an impairment test was determined not to be necessary (Similar as of December 31,
2024).
Other tangible fixed assets
1USD ThousandsFPSO OtherTotalCostJanuary 1, 2025 204,853 9,824 214,677Additions – 640 640Disposals – (29) (29)Currency translation adjustments– 812 812December 31, 2025204,853 11,247 216,100Accumulated depreciationJanuary 1, 2025 (190,056) (8,196) (198,252)Depreciation charge for the year (5,597) (397) (5,994)Disposals – 29 29Currency translation adjustments– (663) (663)December 31, 2025(195,653) (9,227) (204,880)Net book value December 31, 20259,200 2,020 11,2201 Depreciation of Other is included in General and administrative expenses in the statement of operations.
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
27
1USD ThousandsFPSO OtherTotalCostJanuary 1, 2024 204,853 10,048 214,901Additions – 363 363Currency translation adjustments– (587) (587)December 31, 2024204,853 9,824 214,677Accumulated depreciationJanuary 1, 2024 (181,123) (8,340) (189,463)Depreciation charge for the year (8,933) (334) (9,267)Currency translation adjustments– 478 478December 31, 2024(190,056) (8,196) (198,252)Net book value December 31, 202414,797 1,628 16,4251 Depreciation of Other is included in General and administrative expenses in the statement of operations.
The Floating Production Storage and Offloading facility (“FPSO“) located on the Bertam field, Malaysia, has been depreciated to its
residual value. The depreciation charge is included in the depreciation of other assets line in the statement of operations.
For office equipment and other assets, the depreciation charge for the year is based on cost and an estimated useful life of 3 to 5
years. The depreciation charge is included within the general and administrative expenses in the Statement of Operations.
10. RIGHT-OF-USE ASSETS AND LEASE LIABILITIES
USD ThousandsTotalJanuary 1, 2025 3,103Additions 1,692Depreciation (1,012)Disposal (776)Currency translation adjustments63Right-of-use-assets as at December 31, 20253,070Current 930Non-Current2,956Lease Liabilities as at December 31, 20253,886
USD ThousandsTotalJanuary 1, 2024 2,814Additions 1,292Depreciation (907)Currency translation adjustments(96)Right-of-use-assets as at December 31, 20243,103Current 573Non-Current2,728Lease Liabilities as at December 31, 20243,301
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
28
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
11. OTHER NON-CURRENT ASSETS
USD ThousandsDecember 31, 2025 December 31, 2024Financial assets 34,545 34,788 Intangible assets 11,671 13,877 46,216 48,665
Financial assets mainly represent cash payments made in local currency to an asset retirement obligation fund for the Bertam
field, Malaysia for an amount equivalent of USD 34.5 million (2024: USD 30.6 million).
Intangible assets mainly represent carbon offsets purchased in Canada.
12. INVENTORIES
USD ThousandsDecember 31, 2025 December 31, 2024Hydrocarbon stocks 11,995 11,250 Well supplies and operational spares7,995 8,823 19,990 20,073
13. TRADE AND OTHER RECEIVABLES
USD ThousandsDecember 31, 2025 December 31, 2024Trade receivables 73,245 94,265 Underlift 6,704 1,007 1Joint operations debtors 6,449 1,432 Prepaid expenses and accrued income 8,437 12,346Other 2,385 18,400 97,220 127,450 1 Joint operations debtors include cash collateralized guarantees placed in respect of work commitments in Malaysia amounting to USD 4.0 million.
14. CASH AND CASH EQUIVALENTS
Cash and cash equivalents include only cash at hand or held in bank accounts.
15. SHARE CAPITAL
The Corporation’s issued common share capital is as follows:
Number of sharesBalance at January 1, 2024 126,992,066Cancellation of repurchased common shares (7,822,595)Balance at December 31, 2024119,169,471Cancellation of repurchased common shares (7,013,944)Balance at December 31, 2025112,155,527
The common shares of IPC are listed to trade on both the Toronto Stock Exchange and the Nasdaq Stockholm Exchange. The
Corporation is authorized to issue an unlimited number of Common Shares without par value.
As at January 1, 2024, IPC had a total of 126,992,066 common shares issued and outstanding, with no common shares held in
treasury.
During 2024, under the normal course issuer bid (NCIB) announced in December 2023 and renewed in December 2024, IPC
purchased and cancelled an aggregate of 7,822,595 common shares.
29
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
As at January 1, 2025, IPC had a total of 119,169,471 common shares issued and outstanding, of which IPC held 110,156 common
shares in treasury.
Over the period of January 1, 2025 to December 4, 2025, IPC purchased and cancelled 6,641,970 common shares under the
normal course issuer bid (NCIB) and 261,818 common shares under certain other exemptions in Canada.
As at December 31, 2025, IPC had a total of 112,155,527 common shares issued and outstanding, with no common shares held in
treasury.
In addition, IPC has 117,485,389 outstanding class A preferred shares, issued as a part of an internal corporate structuring to a
wholly-owned subsidiary of IPC. Such preferred shares are not listed on any stock exchange and do not carry the right to vote on
matters to be decided by the holders of IPC’s common shares.
16. EARNINGS PER SHARE
Basic earnings per share are based on net result attributable to the common shareholders and is calculated based upon the
weighted-average number of common shares outstanding during the years presented.
2025 2024Net result attributable to shareholders of the Parent Company, USD 28,938,435 102,201,942Weighted average number of shares for the year114,915,700 124,072,452Earnings per share, USD 0.25 0.82Weighted average diluted number of shares for the year 116,916,203 126,299,688Earnings per share fully diluted, USD0.25 0.81
17. SHARE BASED PAYMENTS
IPC Share Unit Plan
The shareholders of IPC at the 2018 Annual General Meeting and at the 2021 Annual General Meeting approved a Share Unit Plan.
Awards under the plan will be accounted from the date of grant.
The IPC Performance Share Plan (“PSP”) 2022 awards vested on February 1, 2025 at a price of CAD 18.89 per award.
The IPC PSP 2023 awards are subject to continued employment and to certain performance conditions being met. The total
outstanding number of awards at December 31, 2025, is 813,000 which vested on February 1, 2026 at a price of CAD 27.18. Each
award was fair valued at the grant date at CAD 11.51 using an adjusted share price calculated with a hybrid valuation model based
on the Monte Carlo simulation. The assumptions used in the calculation of the adjusted share price were a risk free rate of 2.17%,
expected volatility of 46%, dividend yield rate of 0%, and an exercise price of CAD zero.
The IPC PSP 2024 awards are subject to continued employment and to certain performance conditions being met. The total
outstanding number of awards at December 31, 2025, is 819,000 which vest on February 1, 2027. Each award was fair valued
at the grant date at CAD 11.52 using an adjusted share price calculated with a hybrid valuation model based on the Monte Carlo
simulation. The assumptions used in the calculation of the adjusted share price were a risk free rate of 2.27%, expected volatility
of 39%, dividend yield rate of 0%, and an exercise price of CAD zero.
The IPC PSP 2025 awards are subject to continued employment and to certain performance conditions being met. The total
outstanding number of awards at December 31, 2025, is 597,000 which vest on February 1, 2028. Each award was fair valued
at the grant date at CAD 14.03 using an adjusted share price calculated with a hybrid valuation model based on the Monte Carlo
simulation. The assumptions used in the calculation of the adjusted share price were a risk free rate of 2.19%, expected volatility
of 34%, dividend yield rate of 0%, and an exercise price of CAD zero.
30
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
IPC Performance Share Plan 2022 Awards 2023 Awards 2024 Awards 2025 Awards TotalOutstanding at January 1, 2025 937,000 813,000 819,000 – 2,569,000 Awarded during the year – – – 597,000 597,000 Forfeited during the year – – – – –Vested during the year(937,000) – – – (937,000)Outstanding at December 31, 2025– 813,000 819,000 597,000 2,229,000 Vesting dateFebruary 1, 2026 – 813,000 – – 813,000 February 1, 2027 – – 819,000 – 819,000 February 1, 2028– – – 597,000 597,000 Outstanding at December 31, 2025– 813,000 819,000 597,000 2,229,000
The third instalment of the IPC Restricted Share Plan (“RSP”) 2022 awards vested on February 1, 2025, at a price of CAD 18.89
per award.
The second instalment of the IPC RSP 2023 awards vested on February 1, 2025, at a price of CAD 18.89 per award. The total
outstanding number of 2023 awards under the IPC RSP as at December 31, 2025, is 104,098 which vested on February 1, 2026, at
a price of CAD 27.18. Each award was fair valued at the grant date at CAD 14.27.
The first instalment of the IPC RSP 2024 awards vested on February 1, 2025, at a price of CAD 18.89 per award. The second
instalment of the IPC RSP 2024 vested on February 1, 2026, at a price of CAD 27.18. The third instalment vests on February 1,
2027, subject to continued employment. Each award was fair valued at the grant date at CAD 14.82.
The first instalment of the IPC RSP 2025 awards vested on February 1, 2026, at a price of CAD 27.18 per award. The second and
third instalment vest respectively on February 1, 2027, and February 1, 2028, subject to continued employment. Each award was
fair valued at the grant date at CAD 18.90.
IPC Restricted Share Plan 2022 Awards 2023 Awards 2024 Awards 2025 Awards TotalOutstanding at January 1, 2025 151,035 217,080 364,035 – 732,150 Awarded during the year – – – 337,154 337,154 Forfeited during the year (2,381) (4,423) (10,849) – (17,653) Vested during the year(148,654) (108,559) (121,515) – (378,728) Outstanding at December 31, 2025– 104,098 231,671 337,154 672,923 Vesting dateFebruary 1, 2026 – 104,098 115,836 112,385 332,319 February 1, 2027 – – 115,835 112,385 228,220February 1, 2028– – – 112,384 112,384Outstanding at December 31, 2025– 104,098 231,671 337,154 672,923
Under the IPC Share Unit Plan, the Group allows non-employee directors of the Corporation to elect for awards for fees for
services performed as a director and otherwise payable in cash. These awards will vest immediately at the time of grant. However,
these awards may not be redeemed before the end of service as a director of the Corporation. The 2021 outstanding RSP awards
as at December 31, 2025 is 4,333 awards issued with a fair value at the grant date at CAD 6.95. The 2022 outstanding RSP awards
as at December 31, 2025 is 2,391 awards issued with a fair value at the grant date at CAD 12.80, and 2,072 awards issued with a
fair value at the grant date at CAD 15.53. The 2023 outstanding RSP awards as at December 31, 2025 is 3,244 awards issued with
a fair value at the grant date at CAD 10.52, and 2,443 awards issued with a fair value at the grant date at CAD 16.24. The 2024
outstanding RSP awards as at December 31, 2025 is 4,328 awards issued with a fair value at the grant date at CAD 18.20, and
5,607 awards issued with a fair value at the grant date at CAD 15.72. The 2025 outstanding RSP awards as at December 31, 2025
is 3,795 awards issued with a fair value at the grant date at CAD 22.02, and 3,404 awards issued with a fair value at the grant date
at CAD 24.66. The total outstanding RSP awards outstanding as at December 31, 2025, is 31,617.
31
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
The costs charged to the statement of operations of the Group for the Share-Based payments are summarized in the following
table:
USD Thousands2025 2024IPC PSP – 2021 Awards – 108IPC RSP – 2021 Awards – 52IPC PSP – 2022 Awards 125 1,477IPC RSP – 2022 Awards 14 464IPC PSP – 2023 Awards 1,723 1,728IPC RSP – 2023 Awards 387 1,048IPC PSP – 2024 Awards 1,832 1,414IPC RSP – 2024 Awards 1,134 2,248IPC PSP – 2025 Awards 1,762 –IPC RSP – 2025 Awards 2,461 – 9,348 8,539
18. FINANCIAL LIABILITIES
USD ThousandsDecember 31, 2025 December 31, 2024Current bank loans 1,943 3,402Non current bank loans 38,709 1,719Bonds 450,000 443,407Capitalized financing fees(7,676) (3,545) 482,976 444,983
As at January 1, 2025, IPC had USD 450 million of senior unsecured bonds outstanding, maturing in February 2027 with a fixed
coupon rate of 7.25% per annum. In October 2025, IPC completed the issuance of USD 450 million of new senior unsecured
bonds, maturing in October 2030 with a fixed coupon rate of 7.50% per annum, payable in semi-annual instalments in April and
October, and with semi-annual amortizations of USD 25 million commencing in April 2028. The proceeds of the new bonds were
used to fully redeem and cancel the previous bonds. IPC exercised its call option to redeem the previous bonds at a price equal to
102.18% of the nominal amount, plus accrued and unpaid interest. The cash refinancing costs, which include the call option costs
of the senior unsecured bonds, and the related transaction costs, incurred in Q4 2025, amounted USD 18.3 million.
The bond repayment obligations as at December 31, 2025, are classified as non-current as there are no mandatory repayments
within the next twelve months.
In addition, as at December 31, 2025, the Group had a senior secured revolving credit facility of CAD 250 million (the “Canadian
RCF”) in connection with its oil and gas assets in Canada, with a maturity date in May 2027. As at December 31, 2025, CAD 53
million (approximately USD 39 million) was drawn under the Canadian RCF. As at December 31, 2025, the Group also had a letter
of credit facility in Canada (the “LC Facility”) to cover operational letters of credit. As at December 31, 2025, operational letters of
credit in an aggregate of CAD 19.7 million have been issued under the LC Facility, of which one letter of credit of CAD 5.3 million
was fully released in January 2026.
As at December 31, 2025, IPC had an unsecured Euro credit facility in France (the “France Facility“), with maturity in May
2026. IPC makes quarterly repayments of the France Facility and the amount remaining outstanding under the France Facility as
at December 31, 2025 was USD 1.9 million (EUR 1.7 million) which is classified as current representing the repayment planned
within the next twelve months.
The Group is in compliance with the covenants of the bonds and its financing facilities as at December 31, 2025.
32
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
The net (debt)/cash reconciliation can be summarized as follows:
USD ThousandsDecember 31, 2025 December 31, 2024Cash and cash equivalents 7,037 246,593 Bonds (450,000) (443,407) Borrowings (40,652) (5,121) Lease liabilities(3,886) (3,301)Net (debt)/cash(487,501) (205,236)
The net (debt)/cash and the movements in net (debt)/cash can be summarized as follows:
Financial Financial LeaseBonds due Cashliabilities due liabilities due TotalUSD Thousandsliabilitiesafter 1 yearbefore 1 yearafter 1 yearNet (debt)/cash as at January 1, 2025 246,593 (3,301) (3,402) (1,719) (443,407) (205,236)Cash flows (226,702) 976 3,178 (38,709) (6,593) (267,850)Reclassification Long term / Short term – – (1,719) 1,719 – –Additional leases – (1,492) – – – (1,492)Currency translation adjustments (12,854) (69) – – – (12,923)Net (debt)/cash as at December 31, 2025 7,037 (3,886) (1,943) (38,709) (450,000) (487,501)Net debt (excluding lease liabilities) (483,615)
Financial Financial LeaseBonds due Cashliabilities due liabilities due TotalUSD Thousandsliabilitiesafter 1 yearbefore 1 yearafter 1 yearNet (debt)/cash as at January 1, 2024 517,074 (2,896) (3,589) (5,442) (440,288) 64,859Cash flows (275,871) 964 – 3,910 (3,119) (274,116)Reclassification Long term / Short term – – 187 (187) – –Additional leases – (1,480) – – – (1,480)Currency translation adjustments 5,390 111 – – – 5,501Net (debt)/cash as at December 31, 2024 246,593 (3,301) (3,402) (1,719) (443,407) (205,236)Net debt (excluding lease liabilities and including the redeemable bonds value (208,528)at maturity (USD 450 million))
33
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
19. PROVISIONS
Asset Farm-in Pension retirement Other TotalUSD ThousandsobligationobligationobligationJanuary 1, 2025 267,790 1,679 3,685 2,072 275,226Additions – – 816 815 1,631Unwinding of asset retirement obligation discount 16,498 – – – 16,498Payments (5,967) (587) (963) (897) (8,414)Change in estimates (7,916) – (654) – (8,570)1Reclassification725 – – – 725Currency translation adjustments 13,402 138 488 107 14,135December 31, 2025 284,532 1,230 3,372 2,097 291,231Non-current 278,733 – 3,372 2,097 284,202Current 5,799 1,230 – – 7,029Total 284,532 1,230 3,372 2,097 291,2311 The reclassification of the asset retirement obligation related to the 2025 payment to the asset retirement obligation fund in respect of the Bertamasset, Malaysia (see Note 11).
Asset Farm-in Pension retirement Other TotalUSD ThousandsobligationobligationobligationJanuary 1, 2024 253,949 2,176 551 2,078 258,754Additions – – 682 544 1,226Disposals (197) – – – (197)Unwinding of asset retirement obligation discount 14,568 – – – 14,568Payments (7,711) (591) (906) (500) (9,708)Change in estimates 19,553 – 3,491 – 23,0441Reclassification1,013 – – – 1,013Currency translation adjustments (13,385) 94 (133) (50) (13,474)December 31, 2024 267,790 1,679 3,685 2,072 275,226Non-current 261,632 1,120 3,685 2,072 268,509Current 6,158 559 – – 6,717Total 267,790 1,679 3,685 2,072 275,2261 The reclassification of the asset retirement obligation related to the 2024 payment to the asset retirement obligation fund in respect of the Bertamasset, Malaysia (see Note 11).
The farm-in obligation relates to future payments for historic costs on the Bertam field in Malaysia payable for every 1 MMboe
gross that the field produces above 10 MMboe gross and is capped at cumulative production of 27.5 MMboe gross.
In calculating the present value of the asset retirement obligation provision, a blended discount rate of 6% (2024: 6%) per annum
was used, based on a credit risk adjusted rate. The calculation also assumes that the costs are inflated by 2% a year (2024: 2%)
The payment of these obligations is spread over a period of 60 years.
34
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
20. PENSION LIABILITY
The Group operates a pension plan for employees in Switzerland that is managed through a private pension plan. The amount
recognized in the balance sheet associated with the Swiss pension plan is as follows:
USD ThousandsDecember 31, 2025 December 31, 2024Present value of defined benefit obligation 23,135 19,569Fair value of plan assets(19,763) (15,884)Pension obligation, ending balance3,372 3,685
The movement in the defined benefit obligation over the year is as follows:
For the year endedFor the year endedUSD ThousandsDecember 31, 2025December 31, 2024Opening balance 19,569 22,241Current service cost 758 608Ordinary contributions paid by employees 642 604Additional contributions paid by employees 1,425 1,340Interest expense on defined benefit obligation 213 402Actuarial (gain)/loss on defined benefit obligation (402) 3,390Administration costs 19 18Benefits paid from plan assets (1,920) (7,440)Past service cost – 46Foreign exchange (gain)/loss 2,831 (1,640)Defined benefit obligation, ending balance23,135 19,569
The weighted average duration of the defined benefit obligation is 15.56 years. There is no maturity profile since the average
remaining life before active employees reach final age according to the plan is 9.04 years.
The movement in the fair value of the plan assets over the year is as follows:
For the year endedFor the year endedUSD ThousandsDecember 31, 2025December 31, 2024Opening balance 15,884 21,690Ordinary contributions paid by employer 962 906Ordinary contributions paid by employees 642 604Additional contributions paid by employees 1,425 1,340Interest income on plan assets 173 392Return on plan assets excluding interest income 252 (101)Foreign exchange gain/(loss) 2,345 (1,507)Benefits paid from plan assets(1,920) (7,440)Fair value of plan assets, ending balance19,763 15,884
The plan assets are under an insurance contract comprised entirely of free funds and reserves, such as fluctuation reserves and
employer contribution reserves, for which there is no quoted price in an active market.
The amount recognized in the statement of operations associated with the Group’s pension plan is as follows:
For the year endedFor the year endedUSD ThousandsDecember 31, 2025December 31, 2024Current service cost 758 608Interest expense on defined benefit obligation 213 402Administration costs 19 18Past service cost – 46Interest income on plan assets(173) (392)Total expense recognized817 682
35
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
The expense associated with the Group’s pension plan of USD 817 thousand was included within general and administrative
expenses. The Group also recognized in other comprehensive income a USD 654 thousand net actuarial gain on defined benefit
obligations and pension plan assets.
The principal actuarial assumptions used to estimate the Group’s pension obligation are as follows:
For the year endedFor the year endedUSD ThousandsDecember 31, 2025December 31, 2024Discount rate 1.30% 1.00%Inflation rate 0.90% 1.00%Future salary increase 1.25% 1.25%Future pension increases 0.00% 0.00%Retirement ages, male (‘M’) and female (‘F’) M65/F65 M65/F65
Assumptions regarding future mortality are set based on actuarial advice in accordance with the BVG 2020 GT generational
published statistics and experience in Switzerland. The discount rate is determined by reference to the yield on high quality
corporate bonds. The rate of inflation is based on the expected value of future annual inflation adjustments in Switzerland. The rate
for future salary increases is based on the average increase in the salaries paid by the Group, and the rate of pension increases is
based on the annual increase in risk, retirement and survivors’ benefits.
The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:
Change inIncrease inDecrease inassumptionassumptionassumptionDiscount rate 0.50% Decrease by 7.1% Increase by 8.1%Salary growth rate 0.50% Increase by 0.4% Decrease by 0.4%Life Expectancy One year Increase by 1.3% Decrease by 1.3%
The above sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice,
this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the
defined benefit obligation to significant actuarial assumptions, the same method has been applied as when calculating the pension
liability recognized within the consolidated balance sheet.
21. TRADE AND OTHER PAYABLES
USD ThousandsDecember 31, 2025 December 31, 2024Trade payables 39,377 42,634 Joint operations creditors 9,141 11,671 Accrued expenses 94,410 119,316 Other 6,780 2,750 149,708 176,371
22. FINANCIAL ASSETS AND LIABILITIES
Financial assets and liabilities by category
The accounting policies for financial instruments have been applied to the line items below:
Fair value Financial assets Derivatives recognized in Totalat amortized used for December 31, 2025profit or loss costhedgingUSD Thousands(FVTPL)1Other assets34,545 34,545 – –Derivative instruments 2,929 – – 2,929Joint operation debtors 6,449 6,449 – –2Other current receivables86,745 80,041 6,704 –Cash and cash equivalents7,037 7,037 – –Financial assets137,705 128,072 6,704 2,9291 See Note 112 Prepayments are not included in other current assets as prepayments are not deemed to be financial instruments.
36
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
Fair value Financial Derivatives recognized in Totalliabilities at used for December 31, 2025profit or loss amortized costhedgingUSD Thousands(FVTPL)Non-current financial liabilities 481,033 481,033 – –Current financial liabilities 1,943 1,943 – –Derivative instruments 422 – – 422Joint operation creditors 9,141 9,141 – –Other current liabilities140,783 140,783 – –Financial liabilities633,322 632,900 – 422
Fair value Financial assets Derivatives recognized in Totalat amortized used for December 31, 2024profit or loss costhedgingUSD Thousands(FVTPL)1Other assets34,788 34,788 – –Derivative instruments 3,219 – – 3,219Joint operation debtors 1,432 1,432 – –2Other current receivables115,186 114,179 1,007 –Cash and cash equivalents246,593 246,593 – –Financial assets401,218 396,992 1,007 3,2191 See Note 112 Prepayments are not included in other current assets as prepayments are not deemed to be financial instruments.
Fair value Financial Derivatives recognized in Totalliabilities at used for December 31, 2024profit or loss amortized costhedgingUSD Thousands(FVTPL)Non-current financial liabilities 441,581 441,581 – –Current financial liabilities 3,402 3,402 – –Derivative instruments 20,431 – – 20,431Joint operation creditors 11,671 11,671 – –Other current liabilities165,846 165,846 – –Financial liabilities642,931 622,500 – 20,431
The carrying amount of the Group’s financial assets and liabilities approximate their fair values at the balance sheet dates.
For financial instruments measured at fair value in the balance sheet, the following fair value measurement hierarchy is used:
– Level 1: based on quoted prices in active markets;
– Level 2: based on inputs other than quoted prices as within level 1, that are either directly or indirectly observable;
– Level 3: based on inputs which are not based on observable market data.
37
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
Based on this hierarchy, financial instruments measured at fair value can be detailed as follows:
December 31, 2025Level 1 Level 2 Level 3USD ThousandsOther current receivables 6,704 – –Derivative instruments – current – 1,644 –Derivative instruments – non-current– – 1,285Financial assets6,704 1,644 1,285Derivative instruments – current – – –Derivative instruments – non-current– – 422Financial liabilities– – 422
December 31, 2024Level 1 Level 2 Level 3USD ThousandsOther current receivables 1,007 – –Derivative instruments – current – 3,219 –Derivative instruments – non-current– – –Financial assets1,007 3,219 –Derivative instruments – current – 19,869 –Derivative instruments – non-current– – 562Financial liabilities– 19,869 562
23. MANAGEMENT OF FINANCIAL RISK
The Corporation’s financial instruments are exposed to certain financial risks, including credit risk, liquidity risk, foreign exchange
risk, commodity price risk and interest rate risk.
a) Credit risk
The exposure to credit risk arises through the failure of a customer or another third party to meet its contractual obligations to the
Corporation. The Corporation believes that its maximum exposure to credit risk as at December 31, 2025, is the carrying value of
its trade receivables. The Group’s policy is to limit credit risk by limiting the counterparties to major oil and gas companies. Where
it is determined that there is a credit risk for oil and gas sales, the policy is to require an irrevocable letter of credit for the full value
of the sale. The policy on joint operation parties is to rely on the provisions of the underlying joint operating agreements to take
possession of the licence or the partner’s share of production for non-payment of cash calls or other amounts due.
As at December 31, 2025, the trade receivables amounted to USD 73,245 thousand and there is no recent history of default. The
expected credit loss associated with these receivables is not significant. Cash and cash equivalents are maintained with banks
having strong long-term credit ratings.
b) Liquidity risk
Liquidity risk is defined as the risk that the Group could not be able to settle or meet its obligations on time or at a reasonable
price. Corporation treasury is responsible for liquidity, funding as well as settlement management. The Corporation has in
place a planning and forecasting process to help determine the funds required to support the Corporation’s normal operating
requirements on an ongoing basis. The Corporation ensures that there is sufficient available capital to meet its short-term business
requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents,
including bond proceeds. The Corporation has credit facilities in place to assist with meeting its cash flow needs as required (Note
18).
The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. Loan repayments are made upon a net present value calculation of the assets’
future cash flows. No loan repayments are currently forecast under this calculation.
38
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
USD ThousandsDecember 31, 2025 December 31, 2024Non-current Repayment within 1- 5 years: - Bank loans 38,709 1,719 - Bonds 450,000 443,407 - Lease liabilities2,956 2,728491,665 447,854CurrentRepayment within 12 months: - Bank loans 1,943 3,402Payment within 6 months: - Trade payables 39,377 42,634 - Joint operation creditors 9,141 11,671 - Other current liabilities 6,780 2,750 - Lease liabilities 930 573 - Current tax liabilities216 1,14658,387 62,176
c) Foreign exchange risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currencies, primarily with respect
to EUR and CAD. The Group’s risk management objective is to manage cash flow risk related to foreign denominated cash flows.
The Corporation is exposed to currency risk related to changes in rates of exchange between foreign denominated balances and
the functional currencies of the Group’s principal operating subsidiaries. The Group’s revenues are denominated in US dollars,
while most of its operating and capital expenditures are denominated in the local currencies. A significant change in the currency
exchange rates between the US dollar and foreign currencies could have a material effect on the Group’s net earnings and on other
comprehensive income.
The Group has no outstanding currency hedges as of December 31, 2025:
Fair value of outstanding derivative instruments in the balance sheet
December 31, 2025 December 31, 2024USD ThousandsAssets Liabilities Assets LiabilitiesCurrency hedge - CAD – – – 19,030Currency hedge - EUR – – – 557Currency hedge - MYR– – – 282Total– – – 19,869Non-current – – – –Current– – – 19,869Total– – – 19,869
39
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
The following tables summarize the effects that changes in currencies against the US Dollar would have on gross profit through the
conversion of the income statements of the Group’s subsidiaries from functional currency to the presentation currency US Dollar for
the years ended at December 31, 2025 and 2024.
Shift of currency exchange ratesAverage rateUSD weakeningUSD strengthening USD Thousands202510%10%Gross profit in the financial statements 128,120 128,120EUR/USD 0.8855 0.8050 0.9741CAD/USD 1.3975 1.2705 1.5373Total effect on gross profit13,072 (13,072)Shift of currency exchange ratesAverage rateUSD weakeningUSD strengthening USD Thousands202410%10%Gross profit in the financial statements 210,171 210,171EUR/USD 0.9241 0.8401 1.0170CAD/USD 1.3698 1.2453 1.5068Total effect on gross profit17,054 (17,054)
d) Commodity price risk
The Group is subject to price risk associated with fluctuations in the market prices for oil and gas. Prices of oil and gas are affected by
the normal economic drivers of supply and demand as well as the financial investors and market uncertainty. Factors that influence
these include operational decisions, natural disasters, economic conditions, political instability or conflicts or actions by major oil
exporting countries. Price fluctuations can affect the Corporation’s financial position.
Commodity price risk is the risk that future cash flows will fluctuate as a result of changes in the price of oil and natural gas.
Commodity prices are impacted by world economic events that affect supply and demand, which are generally beyond the Group’s
control. Changes in crude oil prices may significantly affect the Corporation’s results of operations, cash generated from operating
activities, capital spending and the Corporation’s ability to meet its obligations. The majority of the Corporation’s production is sold
under short-term contracts; consequently the Group is at risk to near term price movements. The Corporation manages this risk by
constantly monitoring commodity prices and factoring them into operational decisions, such as contracting or expanding its capital
expenditures program.
The Corporation enters into certain risk management contracts in order to manage the exposure to market risks from fluctuations
in commodity prices. These risk management contracts are not used for trading or speculative purposes. The Corporation has
designated its risk management contracts as effective accounting hedges, and thus has applied hedge accounting. As a result, all
risk management contracts are recorded at fair value at each reporting period with the change in fair value being recognized on the
statement of comprehensive income.
40
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
The Group had oil price sale financial hedges outstanding as at December 31, 2025, which are summarized as follows:
Period Volume (barrels per day) Type Average Pricing January 1, 2026 - December 31, 2026 5,000 WTI/WCS Differential USD -12.50/bbl
The Group had gas price sale financial hedges outstanding as at December 31, 2025 which are summarized as follows:
Volume (Gigajoules (GJ) per PeriodType Average Pricing day))April 1, 2026 - October 31, 2026 15,000 AECO Swap CAD 2.73/GJ
The Group had electricity financial hedges outstanding as at December 31, 2025, which are summarized as follows:
Period Volume (MW) Type Average Pricing January 1, 2026 - September 30, 2040 3AESO CAD 75.00/MWh
All of the above hedges are treated as effective and changes to the fair value are reflected in other comprehensive income.
The outstanding derivative instruments can be specified as follows:
Fair value of outstanding derivative instruments in the balance sheet:
December 31, 2025 December 31, 2024USD ThousandsAssets Liabilities Assets LiabilitiesOil price hedge 710 – 1,949 –Gas price hedge 934 – 1,270 –Electricity price hedge1,285 422 – 562Total2,929 422 3,219 562Non-current – – – 562Current2,929 422 3,219 –Total2,929 422 3,219 562
The table below summarizes the effect that a change in the oil and gas price would have had on the net result at December 31, 2025
and 2024:
2025 net result (USD Thousands) 28,942 28,942Possible shift (%) (10%) 10%Total effect on net result (USD Thousands) (54,369) 54,369
2024 net result (USD Thousands) 102,219 102,219Possible shift (%) (10%) 10%Total effect on net result (USD Thousands) (65,653) 65,653
e) Interest rate risk
The Group’s exposure to interest rate risk arises from the impact of interest rate fluctuations on its debt facilities. As at December
31, 2025, the Group’s long-term debt primarily consists of senior unsecured bonds bearing a fixed coupon rate of 7.5%, as well as
a senior secured revolving credit facility subject to a variable interest rate, which ranged between 5.29% and 6.7% during the year
2025. As a result, changes in interest rates are not expected to have a significant adverse impact on the Group’s interest expense.
41
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
24. MANAGEMENT OF CAPITAL RISK
The objectives when managing capital are to safeguard the Group’s ability to continue as a going concern and to meet its
committed work program requirements in order to create shareholder value. The Corporation may put in place new credit facilities,
repay debt, or other such restructuring activities as appropriate. Management continuously monitors and manages the capital and
liquidity position in order to assess the requirement for changes to the capital structure to meet the objectives and to maintain
flexibility.
No significant changes were made in the objectives, policies or procedures during the year ended December 31, 2025 or in the
comparative years.
Through the ongoing management of its capital, the Corporation will modify the structure of its capital based on changing
economic conditions in the jurisdictions in which it operates. In doing so, the Corporation may issue new shares or debt, buy back
issued shares, or pay off any outstanding debt.
25. SALARY AND OTHER COMPENSATION EXPENSES
a) Employee benefits expense
The total employee benefits expense for the year ended December 31, 2025, amounted to USD 84,078 thousand (2024: USD 68,897
thousand).
b) Remuneration of Directors and Senior Management
Remuneration of Directors and Senior Management includes all amounts earned and awarded to the Group’s Board of Directors
and Senior Management. Senior Management includes the Group’s President and Chief Executive Officer, Chief Financial
Officer, Chief Operating Officer, General Counsel and Corporate Secretary, Senior Vice President Corporate Planning and Investor
Relations, Senior Vice President Canada, Vice President Asset Management and Corporate Planning Canada, and Vice President
Commercial Canada.
Directors’ fees include Board and Committee fees. Senior Management’s remuneration includes salary, short-term benefits,
bonuses and any other compensation earned is as follows:
USD Thousands2025 2024Directors’ fees 900 900Senior Management’s salaries, bonuses and other short-term benefits 7,130 6,196Share-based incentive plans paid to Senior Management7,138 10,11415,168 17,210
26. CONTRACTUAL OBLIGATIONS AND COMMITMENTS
In the normal course of business, the Group has committed to certain payments which are not recognized as liabilities. The
following table summarizes the Group’s commitments in Canada as at December 31, 2025:
CAD Millions2026 2027 2028 2029 2030 Thereafter1Transportation service 60.4 91.6 99.1 103.1 103.9 1,384.72Power12.4 12.4 9.8 – – – Total commitments 72.8 104.0 108.9 103.1 103.9 1,384.7
1
IPC has firm transportation commitments on oil and natural gas pipelines that expire between 2037 and 2046.
2
IPC has physical delivery power hedges to purchase 15MWh at a weighted average price of CAD 74.92/MWh from January 1, 2026 - December
31, 2028 and an additional 5MWh at a weighted average price of CAD 58.31/MWh from January 1, 2026 to December 31, 2027.
27. RELATED PARTIES
The Group recognizes the following related parties: associated companies, jointly controlled entities, key management personnel
and members of their close family or other parties that are partly, directly or indirectly controlled by key management personnel or
of its family or of any individual that controls, or has joint control or significant influence over the entity.
All transactions with related parties are in the normal course of business and are made on the same terms and conditions as with
parties at arm’s length.
During 2025, the Group has not entered into material transactions with related parties.
42
Notes to the Consolidated Financial Statements
For the years ended December 31, 2025 and 2024, AUDITED
28. SUBSEQUENT EVENTS
In January 2026, the Group entered into the following oil price sale financial hedges:
Period Volume (barrels per day) Type Average Pricing February 1, 2026 - June 30, 2026 5,000 WTI Sale Swap USD 60.04/bblFebruary 1, 2026 - June 30, 2026 2,500 WTI Sale Swap USD 64.50/bblFebruary 1, 2026 - June 30, 2026 1,500 Brent Sale Swap USD 66.67/bbl
International Petroleum Corporation
Suite 2800
1055 Dunsmuir Street
Vancouver, British Columbia
V7X 1L2, Canada
Tel: +1 604 689 7842
E-mail: info@international-petroleum.com
Web: international-petroleum.com
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