Growing, Undervalued, Low-Leverage…1

In This Energy Bull Market, InPlayOil’s Record-Setting Quarter 2 Could Set Its Stock Up For More 1000+% Potential Breakouts 3

5 Rock-Solid Reasons to Absolutely Love InPlayOil

Crude demand is higher than current supply. In fact the world is undersupplied by 1 million barrels per day. 16

The Company reported Q3 2021 financial and operating results highlighted by record-setting quarterly production and financial results. (2)

InPlay’s stock has essentially been on a vertical surge since the end of 2020. After trading as low as $0.20 a share on Dec 02, 2020, the stock rampaged 1,180%. (3) And is STILL considered undervalued! (9)

Low decline production + high netback light oil + quick payout inventory = TOP-TIER LIGHT OIL GROWTH + SUSTAINABILITY. (1)

The company’s top institutional investor is Carbon Infrastructure Management LLC. They will work with InPlay to help the company meet Net Zero Commitments and position themselves for higher expected carbon-prices and increased global demand for energy. (17) (18)

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Breaking News

Oil could be one of the most explosive stories of 2022.

If you ever want a potentially classic case of FOMO, just look at stocks like InPlayOil (TSX:IPO) (OTCQX:IPOOF) and the broader energy sector.

Don’t act like you didn’t believe this sector was dead when oil prices turned negative on Apr 26, 2020. 4 With all of this clean energy talk and climate change buzz, you’ve probably been continuing to overlook it too.

You could be making a big, big mistake.

Oil prices have rebounded as the world’s economic recovery has caused demand to skyrocket. Just look at what’s happening in the U.S. and its angry citizens dealing with skyrocketing gas prices. The current U.S. administration, which mind you shut down domestic pipelines, has been under immense pressure to tap into the country’s Strategic Petroleum Reserves. 5 They really didn’t have a choice and they did so.

But to no avail as Brent and Light Crude once again jumped over $80 per barrel in early 2022. 6&7
This may only be the beginning. Many industry heavyweights are calling for oil prices to continue surging.

Jeremy Weir, CEO of Trafigura Group, predicted crude to soar above $100 a barrel at the FT Commodities Asia Summit thanks to a “very tight oil market.” 5 Senior management at Russian energy giant, Rosneft, was even more aggressive, forecasting prices to hit $120 per barrel in the second half of 2022. 8

Yet somehow, this oil bull market gets overlooked in the news. Is it because the mass media wants to promote clean energy? Is it because other sectors might be sexier?

The bottom line is if you’re overlooking energy, you’re missing out on some stocks that have completely clobbered the market. Some energy plays that saw moves in 2021 that could make you cry were: 15
InPlayOil (TSX:IPO) (OTCQX:IPOOF) could have that same sort of potential upside. This Canada-based growth-oriented light oil development and production company could have a rare blend of growth, value, and low leverage. All while operating at the heart of one of the most under-the-radar sector bull markets we’ve ever seen.

With activity focused on large oil in place pools with low recovery factors, low declines, and long-life reserves in the Cardium Formation in Alberta, InPlay recently reported a record-setting quarter. (Source 2) And the stock has skyrocketed as much as 1,180% between Dec 02, 2020, and Jan. 12, 2022. 3

So without further ado, here is why the stock might just be getting started with even more explosive room to run.

InPlayOil: Announces Record-Setting Quarter

Want some first-hand evidence as to why ​​InPlayOil (TSX:IPO) (OTCQX:IPOOF) might be the top company in this energy bull rush? Look at their latest earnings report.

InPlayOil (TSX:IPO) (OTCQX:IPOOF) reported Q3 2021 financial and operating results highlighted by record-setting quarterly production and financial results. 2

The significantly improved commodity price environment, which we discussed earlier, is one potential catalyst. Coupled with the efficient execution of its operational and capital program, it’s caused a tsunami of eye-popping production and financial figures.

InPlayOil (TSX:IPO) (OTCQX:IPOOF) was sure to highlight the following: 2
So essentially, the company achieved record production and record growth while both slashing operating expenses and leverage. Yet this illustration of 3Q21 from Michael A. Zuk, Managing Partner of Athena Capital Markets, could depict it better than all these words. In his view, it shows a “​​bigger and less burdened” junior company. Mind you, these figures don’t even consider the lucrative promise of its latest Prairie Storm Acquisition (which we detail later).
  • Consistently grew production (excluding 2020)
    • 2021 estimated pro forma production growth of ~45% over 2020 (~15% over 2019)
    • 2022 guidance with production growth of 55% – 63% over 2021, “debt adjusted production per share growth of 76% – 86% over 2021
  • Has consistently grown AFF (excluding 2020)
    • 2021 forecasted pro forma AFF growth of ~586% over 2020 (~57% over 2019)
    • 2022 guidance with AFF growth of 118% – 129% over 2021 using a US$72.50 price for WTI
  • Has consistently grown reserves in all categories every year
    • Significant pro forma reserves growth in 2020 compared to 2019 (PDP +67%, TP +131%, TPP +119%) with top-tier Funding, Development and Acquisition costs of reserves.
Should it come as a surprise that its 2022 guidance includes fund flows of $111mm – $117mm? Or FAFF of $53.5mm – $59.5mm, resulting in FAFF yield of 25% – 28%, net debt/EBITDA of 0.2 – 0.3x, and production growth / weighted average share of 25% – 32% over 2021e? 1 “or debt adjusted is 76%-86%”1

As it continues executing a strategy for top-tier production growth, this can tend to happen when your ‘Best in Class’ operational and technical team drives costs lower and beats production forecasts.

InPlayOil: Undervalued, Underleveraged, and an Explosive Stock Chart Screaming “FOMO”

The company’s stock has essentially been on a vertical surge since the end of 2020. After trading as low as $0.20 a share on Dec 02, 2020, the stock rampaged 1,180%. 3
Yet despite the rally that this stock has been on, what truly makes it so attractive is that InPlayOil (TSX:IPO) (OTCQX:IPOOF) is so underleveraged and potentially undervalued.

First, let’s talk about the company’s lack of leverage. We mentioned earlier that in its Q3 report, it reported its lowest quarterly leverage ratio in the company’s history. 2 Yet beyond this, the company consistently reduced leverage yearly pre-2020. This record-setting lack of leverage is simply a process of accelerating its eye-popping efficiency. 1
Additionally, the stock could be severely undervalued. As it is, oil is underweighted in most portfolios and very overlooked. In fact Bank of America is expecting $120 oil by June of 2022 11

Look where we are now.

Based on research from Michael A. Zuk, Managing Partner at Athena Capital Markets, the InPlayOil (TSX:IPO) (OTCQX:IPOOF) stock benefits from a relatively small share count and +$110mm in AFF in 2022e. 9 He also uses ‘Year to go Private’ as a unique metric. He screens it at just 2.3 years based on his calculations, which is the top of the peer group (and cheapest on EV/EBITDA). Additionally, in his view, it would take a $4.50 share price to trade at its peer group’s mean, without quality adjusting the name for lower leverage, better PPS+FCF growth, minimal ARO, and more.
A $4.50 share price leaves the stock with a lot of potential room to run…Intriguing, to say the least!

InPlayOil: Production and Operations Positioned For Long-Term Sustainability

The best defense to downside commodity prices is a low-cost producer- which is precisely what Inplay is.

It has simply skyrocketed from an oil bull market while remaining protected from downside risk. It has low decline base production requiring minimal capital to keep flat while adding significant top-tier operated high working interest inventory. In fact, the company could be in the top quartile in declines in oil’s weighted growth universe. Low decline production + high netback light oil + quick payout inventory = TOP-TIER LIGHT OIL GROWTH + SUSTAINABILITY. 1
Additionally, it has some of the most capital efficient reserves and producing barrel additions in its peer group. It is a well-known play that’s been around for some time.
You can thank its operations in Canada’s Cardium for that. Its Cardium projects are well-established, low risk, and offer some of the safest returns in the Western Canada Sedimentary Basin. With 80% Cardium production, InPlayOil (TSX:IPO) (OTCQX:IPOOF) has built itself into a drilling industry pacesetter with horizontal wells and exceeding forecasted volumes. 1

InPlayOil: ​​Acquisitions, ​​Acquisitions, ​​Acquisitions...

Its Q4 2020 acquisition of the Pembina Cardium project (100% WI) is arguably its most notable and game-changing project to date. (Source 1) When oil was still cheap at the end of 2020, and the outlook was uncertain at best, InPlayOil (TSX:IPO) (OTCQX:IPOOF) had foresight and cahonés. It “bought low,” expanded its operations, and is today laughing all the way to the bank.

After acquiring the property, InPlay immediately built a multi-well battery in Q1/21 to handle full field development. With 26 well inventory remaining with ~30% of the locations unbooked, along with 100% WI lands, development can occur at a pace within the company’s control. 1

To this date, the project has significantly outperformed forecasted production volumes and booked reserves on all producing wells drilled. 1
Not to rest on its laurels, the company announced an acquisition on Sep 28, 2021, with that same type of potential. The acquisition to acquire light-oil Cardium-focused producer Prairie Storm Resources Corp. for roughly $40.5 million closed on November 30, 2021. This deal could be colossal and potentially make InPlay one of the largest acreage holders in the entire Willesden Green Cardium. 12

While its latest earnings reports and projections don’t take this acquisition into account, the company anticipates the following: 12
Additionally, InPlayOil (TSX:IPO) (OTCQX:IPOOF) targets 2022 production to average between 8,900 and 9,400 boe/d, which is anticipated to generate $111.0 – $117.0 million of AFF and $53.5 to $59.5 million of FAFF. This could strengthen an already strong balance sheet with 2022 targeted net debt to earnings before interest, taxes, and depletion (“EBITDA”), improving to 0.2 times – 0.3 times. 12

It also adds proved developed producing (“PDP”) reserves of 4.9 million boe total proved (“TP”) reserves of 21.3 million boe and total proved plus probable (“TPP”) reserves of 26.8 million boe. It also includes about 37,995 net acres of high working interest (77%) Cardium land. 12

Lastly, this acquisition adds over 86 net booked drilling locations while adding even more improvements to the company’s sustainability. This includes low decline production, strong FAFF, sizable drilling inventory, the addition of material scale to the company with significant anticipated cost savings through synergies, and a strengthened balance sheet with improvements to net debt/EBITDA in 2022. 12

InPlayOil: ​​Environmentally-Friendly?!

A way to invest in oil’s surge while remaining environmentally friendly? Imagine that.

InPlayOil (TSX:IPO) (OTCQX:IPOOF) isn’t your typical environmentally-hazardous oil driller from Texas. We should note that being a Canadian oil producer already makes it more environmentally friendly than any U.S. play. The U.S., and most other countries, do not have the same type of environmental regulation that Canada has. When it comes to energy, Canada is one of the most environmentally-responsible nations on the planet, and it shows.

“Canada supplies energy to the world while operating some of the safest, low-environmental impact facilities in the world,” according to a Context Energy Examined piece. 13 “In fact, among oil-producing nations, Canada is a leader along environmental, social and governance measures. In a world that will require oil and natural gas resources to meet energy demand for decades to come, Canada is already a sustainable supplier of choice,” the piece added. 13

InPlayOil (TSX:IPO) (OTCQX:IPOOF) is no exception and has reported stunning environmental numbers not only for an oil company but for ANY type of company. 1

So to sum it up…

If there was a perfect play for the perfect time, I have yet to see one quite like InPlayOil (TSX:IPO) (OTCQX:IPOOF).

It is growing at breakneck speed thanks to oil’s bull market and a well-rounded acquisition strategy. It’s undervalued, unleveraged, and has seen its stock soar by 1000+% since December 2020. 3 Based on its latest record-setting earnings report and what analysts like Michael A. Zuk says, this may only be the beginning too.

Beyond combining exposure to energy’s upside with potential downside risk protection, InPlay continues shattering production volume estimates and keeps on expanding its footprint with strategic acquisitions. Yet, it could also be a top ESG play in the soaring energy industry.

The forecasts are bullish, the potential is there, and you might want to get quite enthusiastic about this company’s prospects.

5 Rock-Solid Reasons to Absolutely Love InPlayOil

Crude demand is higher than current supply. In fact the world is undersupplied by 1 million barrels per day. (16)

The Company reported Q3 2021 financial and operating results highlighted by record-setting quarterly production and financial results. (12)

InPlay’s stock has essentially been on a vertical surge since the end of 2020. After trading as low as $0.20 a share on Dec 02, 2020, the stock rampaged 1,180%. (3) And is STILL considered undervalued! (9)

Low decline production + high netback light oil + quick payout inventory = TOP-TIER LIGHT OIL GROWTH + SUSTAINABILITY. (1)

The company’s top institutional investor is Carbon Infrastructure Management LLC. They will work with InPlay to help the company meet Net Zero Commitments and position themselves for higher expected carbon-prices and increased global demand for energy. (17) (18)

Source 1: https://www.inplayoil.com/investors/stock-information/presentations-events 

Source 2: https://www.inplayoil.com/sites/2/files/documents/press_release_q3_2021_final.pdf 

Source 3: https://stockcharts.com/h-sc/ui?s=IPO.TO 

Source 4: https://www.cnbc.com/2020/04/26/why-oil-prices-went-negative-and-why-they-can-go-negative-again.html 

Source 5: https://www.bloomberg.com/news/articles/2021-11-15/oil-edges-lower-as-traders-await-spr-decision-biden-xi-summit 

Source 6: https://schrts.co/GNFprhzn 

Source 7: https://schrts.co/HnrnRNvc  

Source 8: https://financialpost.com/pmn/business-pmn/rosneft-says-oil-price-may-reach-120-bbl-in-h2-2022-tass 

Source 9: https://www.linkedin.com/pulse/zuks-nukes-inplay-record-3q21-athena-deal-flow-oil-chart-zuk/?trk=pulse-article_more-articles_related-content-card 

Source 10: https://www.barchart.com/stocks/quotes/IPO.TO/opinion 

Source 11: https://www.worldoil.com/news/2021/11/1/bank-of-america-expects-120-oil-by-june-2022  

Source 12: https://www.inplayoil.com/sites/2/files/documents/inplay_press_release_-_psec_september_2021_-_final.pdf 

Source 13: https://context.capp.ca/articles/2019/feature_canadian-oil-and-gas-environmental-innovation/ 

Source 14: ​​https://www.bloomberg.com/professional/blog/esg-assets-may-hit-53-trillion-by-2025-a-third-of-global-aum/ 

Source 15: https://fknol.com/list/best-performing/energy-stocks.php 

Source 16:  https://www.reuters.com/business/energy/global-oil-deficit-seen-1-mln-bpd-russias-novak-says-2021-05-26/ 

Source 17: https://simplywall.st/stocks/us/energy/otc-ipoo.f/inplay-oil
Source 18: https://carboninfrastructurepartners.com/about/

Company Information

InPlay Oil Corp. engages in the acquisition, exploration, development, and production petroleum and natural gas properties in Canada.