Message to Shareholders:
InPlay's 2025 fiscal year marked a truly transformational chapter in the Company's history, highlighted by the successful completion of the highly accretive April 2025 acquisition of Pembina assets in our core focus area. This strategic transaction significantly strengthened our already robust drilling inventory, expanded our operational scale, increased our ability to generate meaningful free adjusted funds flow ("FAFF")(4) and enhanced the long-term sustainability and depth of our asset base.
InPlay's long-term strategy is anchored in disciplined capital allocation, driving sustainable organic growth while pursuing strategic, accretive acquisitions; an approach supported by the Company's proven track record of execution. InPlay has never been better positioned to advance this two-pronged growth strategy. The Company's foundation was further strengthened in 2025 with the addition of Delek Group Ltd. ("Delek") as a strategically aligned 32.7% shareholder. Delek has a strong history of value creation in the international energy markets with significant investments in the North Sea (Ithaca Energy plc) and the Mediterranean (NewMed Energy). Delek identified Canada as a stable and attractive jurisdiction with compelling return potential, positioning InPlay as a natural extension of its global energy investment strategy. Delek's investment enhances InPlay's financial strength and strategic flexibility, providing access to additional capital and alternative funding sources to support the Company's growth strategy. Delek played a pivotal role in introducing InPlay to the Israeli capital markets and supporting the successful completion of the Company's oversubscribed senior unsecured bond offering in February 2026. The offering was completed at an attractive cost of capital of 6.23%, further strengthening InPlay's balance sheet and liquidity profile. InPlay looks forward to working closely with Delek to execute its long-term strategy of building a sustainable, growth-oriented Canadian oil and gas company focused on delivering top tier returns to shareholders.
During 2025, InPlay remained focused on operational execution, disciplined capital allocation and prioritizing FAFF while continuing to return capital to shareholders and pay down debt. Adjusted Funds Flow(2) ("AFF") increased by 67% in 2025, delivering FAFF of $62 million. These results were achieved despite a 14% decline in WTI pricing, demonstrating the resilience and capital efficient nature of our light oil asset base. FAFF yield at year end was 18% (one of the highest in our peer group), dividends paid to shareholders were $27.1 million and debt repayment of $36 million post-acquisition close on April 7, 2025. The Company capitalized on its operational excellence to generate strong capital efficiencies during our 2025 capital program. Our team delivered some of the strongest-performing Cardium wells in 2025 with payouts averaging approximately seven months, underscoring the quality of our inventory and technical execution capabilities. This strong operational performance enabled us to increase production guidance over the course of the year while simultaneously reducing capital expenditures.
The Company's exceptional 2025 reserve results reflect both the impact of the acquisition and strong operating results achieved during the year. Proved Developed Producing ("PDP") reserves increased 179%, while a long reserve life index continues to underpin a low decline, high FAFF generating asset base. Despite a material year-over-year decrease in the benchmark Edmonton light oil price used in the Reserve Report (20% in 2026, 14% in 2027, 9% thereafter), the Company increased its Total Proved ("TP") and Total Proved plus Probable ("TPP") net asset value to $30.16/share and $44.02/share respectively, underscoring the significant intrinsic value embedded in our assets relative to current market levels.
Looking forward, InPlay is exceptionally well positioned to continue to execute key operational priorities, disciplined capital allocation and maximizing FAFF while continuing to return capital to shareholders. As announced on February 24, 2026, InPlay's Board of Directors approved a 2026 capital budget of $66, $74 million to drill 12, 14 net horizontal Cardium wells. This program is forecast to result in annual average production of 18,600, 19,200 boe/d(1) (60%, 62% light crude oil and NGLs), an 11% increase over 2025, resulting in a FAFF yield(4) of 11%, 15% (expected to be top tier amongst peers). The capital program is designed to be flexible and responsibly manage the pace of development, maintain operational and financial strength while remaining focused on delivering return of capital to shareholders.
2025 Financial and Operating Highlights:
Closed a transformational acquisition of Cardium-focused light oil assets in Pembina at highly accretive acquisition metrics (+45% AFF/share(3), +65% FAFF/share(3)), improving the Company's sustainability through a lower decline rate, strong reserve life index and increased tier one drilling locations.
Achieved average annual production of 17,043 boe/d(1) (61% light crude oil and NGLs), a 96% increase from 2024.
Improved light oil production to 8,143 bbl/d, a 131% increase from 2024 and a 160% increase Q4 2025 over Q4 2024. Light crude oil weighting improved 20% from 2024.
Realized strong operating income of $144.1 million, a 75% increase from 2024, which resulted in an operating income profit margin(4) of 49%.
Generated AFF(2) of $114.4 million ($4.68 per weighted average basic share(3)), a 67% increase from 2024 despite a 14% decrease in WTI prices. Fourth quarter AFF totaled $30.7 million ($1.10 per weighted average basic share(3)), a 64% increase from 2024 even as WTI prices declined 16%. Fourth quarter AFF also increased 15% over Q3 2025.
Delivered FAFF of $62 million and distributed $27.1 million in dividends, equating to a 18% FAFF yield(4) and 8.7% dividend yield relative to year-end market capitalization. Since November 2022, total dividends distributed amounted to $69.7 million ($3.69 per share, including dividends declared to date in 2026).
Invested $52 million in development capital which was $1 million below the lower end of our May post-acquisition 2025 capital budget of $53 - $60 million and 17% less than 2024. Due to capital efficiencies, disciplined spending, and well outperformance, capital was 35% lower than our original capital forecast of $80 million on announcement on February 2025 to achieve production guidance.
Repaid $35 million of net debt from closing of the Pembina acquisition on April 7, 2025.
2025 Reserves Highlights(1):
InPlay's capital efficient 2025 drilling program and accretive Pembina asset acquisition resulted in strong reserve results for 2025:
PDP reserves of 48,002 mboe (60% light and medium crude oil & NGLs), 179% increase from 2024.
TP reserves of 90,987 mboe (64% light and medium crude oil & NGLs), 107% increase from 2024.
TPP reserves of 119,937 mboe (64% light and medium crude oil & NGLs), 104% increase from 2024.
Achieved NPV BT10 reserve values(1) and Net Asset Value ("NAV") per share of:
PDP: $594 million; $14.69/share
TP: $1,025 million; $30.16/share
TPP: $1,411 million; $44.02/share
Reserves life index ("RLI")(2) of:
PDP: 7.0 years
TP: 13.2 years
TPP: 17.4 years
Delivered Finding, Development and Acquisition ("FD&A") costs (including changes in future development costs) and recycle ratios(3) of:
PDP: $9.22/boe; 2.5x
TP: $12.96/boe; 1.8x
TPP: $10.65/boe; 2.2x
Replaced reserves(4) by:
PDP: 595%
TP: 857%
TPP: 1,084%
2025 development capital program (excluding acquisitions) added new light oil weighted production at a capital efficiency of $21,333 per boe/d
1.
See "Corporate Reserves Information" for detailed information from the Reserve Report and associated NPV calculations.
2.
RLI is calculated by dividing the reserves in each category by 2026 forecasted average annual production. For example 2025 TP = (90,987 mboe) / (18,900 boe/d) = 13.2 years. See Information Regarding Disclosure on Oil and Gas Reserves and Operational Information in the Reader Advisories.
3.
Based on operating netback of $23.17/boe.
4.
Based on 2025 average production of 17,043 boe/d
5.
Net Asset Value is calculated as NPV BT10 reserve values in the Reserve Report plus $33.5 million of undeveloped land at December 31, 2025 less net debt at December 31, 2025 of $218 million.
2026 Subsequent Event:
In February, InPlay closed an oversubscribed offering of senior unsecured bonds for total gross proceeds of C$242 million maturing on December 15, 2030 at an attractive interest rate of 6.23%. This bond is expected to reduce our cost of capital while diversifying the Company's financing sources. Following the bond issuance, InPlay repaid and retired its term loan. The Company is now positioned with $190 million of available capacity on its fully undrawn revolving credit facility. Additionally, InPlay successfully mitigated exposure to fluctuations in the CAD/NIS exchange rate associated with the NIS-denominated senior unsecured bonds through the execution of foreign exchange hedging arrangements that fully cover all projected cash outflows, including principal repayments, over the next four years.
Financial and Operating Results:
(CDN) ($000's)
Three months endedDecember 31
Year endedDecember 31
2025
2024
2025
2024
Financial
Oil and natural gas sales
81,485
40,039
291,407
153,713
Adjusted funds flow(2)
30,708
18,749
114,372
68,524
Per share, basic(3)
1.10
1.26
4.68
4.56
Per share, diluted(3)
1.10
1.20
4.68
4.38
Per boe(3)
17.04
21.74
18.39
21.49
Comprehensive income (loss)
3,041
2,220
(7,842)*
9,469
Per share, basic
0.11
0.12
(0.32)
0.66
Per share, diluted
0.10
0.12
(0.32)
0.60
Dividends
7,550
4,100
27,056
16,399
Capital expenditures, PP&E and E&E
11,235
6,204
52,041
63,069
Property acquisitions (dispositions)
(427)
-
291,480
(37)
Net debt(2)
217,994
60,895
217,994
60,895
Shares outstanding
27,872,506
15,019,893
27,872,506
15,019,893
Basic weighted-average shares
27,841,416
15,019,893
24,444,750
15,023,009
Diluted weighted-average shares
29,119,436
15,525,115
24,444,750
15,545,548
Operational
Daily production volumes
Light and medium crude oil (bbls/d)
9,614
3,691
8,143
3,523
Natural gas liquids (boe/d)
2,401
1,651
2,180
1,499
Conventional natural gas (Mcf/d)
45,445
24,203
40,323
22,139
Total (boe/d)
19,589
9,376
17,043
8,712
Realized prices(3)
Light and medium crude oil & NGLs ($/bbls)
64.04
74.16
70.29
76.48
Conventional natural gas ($/Mcf)
2.56
1.61
1.81
1.62
Total ($/boe)
45.21
46.42
46.84
48.21
Operating netbacks ($/boe)(4)
Oil and natural gas sales
45.21
46.42
46.84
48.21
Royalties
(5.87)
(6.09)
(6.36)
(6.26)
Transportation expense
(1.00)
(0.91)
(0.89)
(0.97)
Operating costs
(17.28)
(14.39)
(16.42)
(15.12)
Operating netback(4)
21.06
25.03
23.17
25.86
Realized gain on derivative contracts
1.62
1.62
0.72
0.86
Operating netback (including realized derivative contracts) (4)
22.68
26.65
23.89
26.72
*
Comprehensive income (loss) was impacted by $10.8 million in one-time transaction and integration costs relating to the acquisition of Pembina assets in April 2025, and higher non-cash accretion and depletion and depreciation costs in comparison to 2024.
2025 Financial & Operations Overview:
Our 2025 results are highlighted by our accretive acquisition of Pembina assets in April 2025, disciplined capital allocation and delivery of strong returns to shareholders. The acquisition was financed with an increase to our credit facilities, issuance of common shares and an oversubscribed $33.8 million bought deal equity financing.
We executed our capital program under budget, generated meaningful adjusted funds flow, returned $27.1 million to shareholders and paid down $35 million of net debt from closing of the Pembina acquisition on April 7, 2025. Production averaged 17,043 boe/d(1) (61% light crude oil & NGLs) in 2025 and 19,589 boe/d (61% light crude oil & NGLs) in the fourth quarter of 2025.
InPlay's capital program for 2025 consisted of $52 million of exploration and development capital. Efficient operational execution in 2025 led to capital expenditures coming in $1 million below the low end of our May post-acquisition budget of $53, $60 million and approximately 17% less than 2024 when production averaged 8,712 boe/d. The Company drilled, completed and brought on production ten (8.2 net) extended reach horizontal ("ERH") Cardium wells during the year and completed a significant operated gas plant expansion and other facility projects. InPlay also spent $4.2 million on the successful abandonment of 31 wellbores, 90 pipelines and the reclamation of 32 well sites.
InPlay generated AFF of $114.4 million ($4.68 per basic share) during 2025 a 67% increase from 2024. These results were achieved despite a 14% decline in WTI pricing and lower than forecasted natural gas prices. Approximately $62 million in FAFF was generated resulting in a FAFF yield of 18%, evidencing our strong ability to generate meaningful FAFF.
Low crude oil prices during the year impacted the Company's financial results with WTI decreasing 14% compared to 2024. This resulted in a 16% decrease from 2024 to our realized oil sales price, which was partially offset by realized hedging gains in the later part of the year. Significantly lower natural gas prices also impacted financial results offset with meaningful hedging gains realized throughout the year.
Operations Update:
In 2025, InPlay had one of our strongest drilling campaigns in the Company's history. In the fourth quarter of 2025, InPlay continued its operational momentum by bringing on production five (5.0 net) operated wells. On average, the five wells delivered initial production ("IP") rates of 429 boe/d (72% light crude oil and NGLs) per well over their first 90 days of production, approximately 66% above internal forecasts. The Company's 2025 drilling program for the second half of 2025 continues to generate substantial returns for the Company through strong IP rates.
InPlay's capital program for 2026 is underway with two (2.0 net) ERH wells being drilled to date which have recently come on production and are in the early cleanup stage. InPlay has also started drilling operations on a three (3.0 net) ERH well-pad which is expected to come on-line at the end of March. Approximately 7, 9 net horizontal wells are planned for the remainder of the year, with most of the capital spend and production coming on-line from these wells in the second half of 2026.
Notes:
1.
See "Production Breakdown by Product Type" at the end of this press release.
2.
Capital management measure. See "Non-GAAP and Other Financial Measures" contained within this press release.
3.
Supplementary financial measure. See "Non-GAAP and Other Financial Measures" contained within this press release.
4.
Non-GAAP financial measure or ratio that does not have a standardized meaning under International Financial Reporting Standards (IFRS) and GAAP and therefore may not be comparable with the calculations of similar measures for other companies. Please refer to "Non-GAAP and Other Financial Measures" contained within this press release and in our most recently filed MD&A.
Corporate Reserves Information:
The following summarizes certain information contained in the Reserve Report. The Reserve Report was prepared in accordance with the definitions, standards and procedures contained in the COGE Handbook and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserve information as required under NI 51-101 will be included in the Company's Annual Information Form ("AIF") which will be filed on SEDAR+ by the end of March 2026.
December 31, 2025
Light and
Medium
Conventional
Oil
BTAX
NPV
Future
Development
Net
Undeveloped
Reserves Category(1)(2)(3)(4)(5)
Crude Oil
NGLs
Natural Gas
Equivalent
10 %
Capital
Wells
Mbbl
Mbbl
MMcf
MBOE
($000's)
($000's)
Booked
Proved developedproducing
22,680
6,094
115,365
48,002
593,854
-
-
Proved developed non-producing
228
69
1,588
561
6,037
891
-
Proved undeveloped
24,627.0
4,373
80,548
42,424
425,131
752,736
218.0
Total proved
47,534
10,536
197,501
90,987
1,025,021
753,627
218.0
Probable developed producing
4,894
1,306
25,018
10,370
107,320
-
-
Probable developed non-producing
46
13
301
109
599
-
-
Probable undeveloped
10,521
1,738
32,277
18,472
278,342
108,064
29.6
Total probable
15,461
3,057
62,596
28,950
386,262
108,064
29.6
Total proved plus probable(6)
62,995
13,593
260,096
119,937
1,411,283
861,691
247.6
Notes:
1.
Reserves have been presented on a gross basis which are the Company's total working interest (operating and non-operating) share before the deduction of any royalties and without including any royalty interests of the Company.
2.
Based on an arithmetic average of the price forecasts of three independent reserve evaluator's (Sproule Associates Limited, McDaniel & Associates Consultants Ltd. and GLJ Ltd.) then current forecast at December 31, 2025, as outlined in the table herein entitled "Pricing Assumptions".
3.
It should not be assumed that the NPV amounts presented in the tables above represents the fair market value of the reserves. There is no assurance that the forecast prices and cost assumptions will be attained and variances could be material. The recovery and reserves estimates of InPlay's light and medium crude oil, natural gas liquids and conventional natural gas reserves provided herein are estimates only and there is no guarantee that the estimated reserves will be recovered. Actual light and medium crude oil, conventional natural gas and natural gas liquids reserves may be greater than or less than the estimates provided herein.
4.
All future net revenues are stated prior to provision for interest, general and administrative expenses and after deduction of royalties, operating costs, estimated well abandonment, decommissioning and reclamation costs and estimated future capital expenditures. Future net revenues have been presented on a before tax basis.
5.
The Company has included abandonment, decommissioning and reclamation costs for all active wells and future development wells assigned in the Reserve Report.. December 31, 2025 reserve NPV values are also inclusive of currently enacted carbon taxes.
6.
Totals may not add due to rounding.
Net Present Values of Reserves:
InPlay achieved strong before tax estimated net present values ("NPV") of future net revenues associated with our 2025 year-end reserves discounted at 10% ("NPV BT10"), although impacted by weaker future commodity prices in comparison to December 31, 2024 (refer to table below). The Company achieved NPV BT10 reserve values of $594 million (PDP), $1,025 million (TP) and $1,411 million (TPP) based on the three independent reserve evaluator average pricing, cost forecast and foreign exchange rates as at December 31, 2025 used in the Reserve Report. Commodity price decreases in the 2025 year-end reserve report compared to 2024 were as follows:
Decrease
2026
2027
Thereafter
Edmonton Light Oil
(20 %)
(14 %)
(9 %)
AECO
(10 %)
(5 %)
(5 %)
NGLs
(22 %)
(16 %)
(11 %)
December 31, 2025
BTAX NPV 5%
BTAX NPV 10%
($000's)
($000's)
PDPNPV(1)(2)
702,368
593,854
TPNPV(1)(2)
1,366,443
1,025,021
TPPNPV(1)(2)
1,956,824
1,411,283
Notes:
1.
Evaluated by GLJ as at December 31, 2025. The estimated NPV does not represent fair market value of the reserves.
