This transcript is designed to be used alongside the freely available audio recording on this page. Timestamps within the transcript are designed to help you navigate the audio should the corresponding text be unclear.

The machine-assisted output provided is partly edited and is designed as a guide.:

00:03 Okay. So, a very good morning to everybody, and welcome to IPC's Third Quarter Results and Operations Update Presentation.

My name is Mike Nicholson, I'm the CEO of IPC. Also joining me and presenting this morning is Christophe Nerguararian, the CFO; and we also have Rebecca Gordon, who's our VP of Corporate Planning and Investor Relations.

00:29 I'll begin in the usual fashion by walking through the third quarter operations update and then I'll pass the floor to Christophe, he'll take you through the financial numbers and then at the end of the – of our presentation, it will open up and you have the opportunity to ask questions. 00:49 Before I get into the highlights of the first quarter, we do talking currently with an IPC, a lot of our excellence and you're going to see in here this morning phenomenal performance on the operations side, and I really like to thank all of our teams in Canada and Malaysia and France, and corporately in Geneva for really lifting in our production levels back to pre-COVID highs and delivering such a phenomenal operational performance and when you combine that with the strong commodity prices, we've seen trust across entire energy complex you're going to see record high financial results when Christophe runs through his numbers.

01:32 So to start with the highlights for the third quarter and with production, our third quarter average net production was just under forty seven thousand barrels of oil equivalent per day above our high end guidance for the third quarter and as result of the very strong year-to-date production performance, we're now revising upwards our full year guidance to an excess of forty five thousand barrels of oil equivalent per day, and that's a uptick of a thousand barrels a day from our second quarter guidance. 02:06 Continued good control and the cost from operating costs for the third quarter were slightly below guidance fourteen dollars seventeen per BOE and we're leaving our full year forecast of fifteen point fifty per BOE unchanged.

On the investment and capital expenditure front, we are reducing our capital expenditure forecast done by twenty three million dollars to fifty million dollars and I'll come back to that, that’s mainly as a result of the rephasing of some of our Malaysian expenditure into early twenty twenty two. 02:43 And turning to the cash flow numbers, record high numbers across the board third quarter operating cash flow was above ninety million US dollars and as a result of that, we're now increasing our full year guidance to between three fifteen million dollars and three thirty five million dollars likewise record high free cash flow generation, seventy seven million dollars for the third quarter, and again, we're increasing our full year free cash flow guidance to now between two forty million dollars to two sixty million dollars and that translates into the full year free cash flow yield somewhere between twenty eight percent to thirty percent phenomenal numbers there on the cash flow side.

03:30 That's of course, fed into significant deleveraging to the third quarter, the net debt is dropped to just over one hundred and sixty million dollars and of course that side a profound impact on our leverage ratio, which has now dropped to zero point six times and compared with three times net debt to EBITDA at the end of twenty twenty. 03:52 Christophe will come back to in this presentation as we see the hedges roll off the bank mandated hedges that's obviously fitting through into the stronger free cash flow generation and of course, we don't actually have any old hedges in place in twenty twenty two, so that should set us up for continued strong cash flow generation as we move into twenty twenty two.

04:16 Continued excellent performance on the ESG side no material safety or environmental incidents to report and we did alongside our second quarter results, deliver our second annual sustainability report and that report we did confirm the we secured the carbon offsets that we need for twenty twenty one to bring our net emissions intensity and by fifty percent by twenty twenty five. 04:44 And as a result of the exceptional operational delivery and strong financial performance, very pleased to be announcing this morning that we're applying to commence our third share repurchase program since the company was spun off back in twenty seventeen.

05:03 So that's the highlights, let's start now to go through a bit more detail the production performance, the third quarter production was forty six thousand eight hundred barrels of oil equivalent per day, exceptional production performance across all of our business units, if we start with Canada, and you can see from the production plots on the slides that we did take the shutdown Onion Lake Thermal during the second quarter, that was to set us up for our Onion Lake Thermal D-prime pads. That's been brought on stream and has been ramped up ahead of schedule and was delivering above our forecast expectations.

So, a really good start and from Onion Lake Thermal team. And during the fourth quarter, we're making good progress with our 5-well infill campaign, though really expect much production contribution during twenty twenty-one, but that will add some production growth as we move into early twenty twenty two.

6:05 On the international assets again, continued strong production in Malaysia and in France. In Bertam, we did complete the shutdown during the second and third quarter.

And that was to set us up for the Infill sidetrack drilling campaign on our A15 well and our downtown field that shutdown was completed ahead of schedule and we're on track to commence drilling operations in the fourth quarter and will the production start-up early in the year, I'll come back and give a bit more color on that later in the presentation. 06:40 But if we look at that strong third quarter production performance, that's allowed us to no raise our full-year guidance to and excess of forty five thousand barrels of oil equivalent per day, up from our Q2 guidance of forty four thousand barrels of oil equivalent per day and if you look at the chart on the bottom of the page, you can see that this is our third quarter and succession of delivering our production above the high end of our guidance estimates.

So, again, huge congratulations to all of our teams for delivering such a solid performance and we've seen production recover to pre-COVID ties, which is no achievements. 07:26 Turning now to operating cash flow.

Operating cash flow for the first nine months was two twenty six million US dollars that’s on the back of an average brand price of sixty eight dollars per barrel so in the first nine months, we've been able to generate more than our original CMD high keys forecast of two twenty million dollars which was a similar brand oil price of sixty five dollars per barrel. The reason we've been able to deliver such strong cash flow generation is a combination of that higher production performance better Canadian crude price differentials and stronger Canadian gas prices and that causes us slight increase our full year guidance for operating cash flow to now between three fifteen dollars and three thirty five million dollars assuming a seventy five dollars to eighty five dollars average Brent price through the fourth quarter.

08:31 Capital expenditure, as I mentioned in the highlights, we have reduced our full-year capital expenditure forecast by twenty three million dollars to fifty million US dollars, that's just due to the latest estimates of when the rig is expected to arrive and in early December on our back town field location, so the majority of that drilling expenditure is now refused into twenty twenty two. So, full year CapEx expenditure forecast now of fifty billion US dollars.

Let me combine that strong operating cash flow and a relatively light capital expenditure budget, we're seeing record high free cash flow generation for the company forecast for the full year twenty twenty one. For the first nine months alone, we've generated more than twenty million dollars above our original CMD high forecast and hundred and seventy six million dollars for the first nine months.

And when we look forward for the fourth quarter, we're significantly increasing our full year fee cash flow guidance now up to between two forty million dollars to two sixty million dollars between seventy five million dollars and eighty five dollars Brent up from one hundred and ninety five million dollars for the full year that we managed alongside our second quarter results. And when you look at IPC’s closing market capitalization at the end of last week, that translates and very attractive twenty eight percent to thirty percent free cash flow yield for the full year.

10:09 And if we just picked up free cash flow yields in context, with the rest of the global integrated E&P industry, it compares extremely favorably, the slide shows an survey of the expected forecast free cash flow yields across that entire integrated E&P industry space, it was a report recently issued by RBC capital markets and you can see that the range of free cash flow yields expected for twenty twenty one are between eight percent and sixteen percent with an average for the industry of twelve percent. So, when you look at IPC numbers of somewhere between twenty eight percent and thirty percent, we're producing cash flow more than double the industry average, which is quite extraordinary.

11:03 And when we look beyond in just the twenty twenty-one numbers and our five year forecast, which only assumes the over developing is our two seventy million barrels of 2P reserves. We're in a position to hold our production levels to be over around forty five thousand barrels a day flat over the next five years.

We are noticing at the bottom end of the range, we're increasing our guidance by one hundred and forty million, so increasing it from six hundred to now seven forty million dollars to take kind of the strong twenty twenty one cash flow performance and at the high end of seventy five dollars per barrel you can generate up to one point two billion dollars of free cash flow. That translates into an annual free cash flow yield of between seventeen percent per annum and twenty eight percent per annum.

So, all prices ten dollars a bottle below where we can sustain these free cash flow yields that we're generating this year for the next four years, which I think is extremely impressive. And of course, that sets us up to continue to generate significant shareholder value in the years ahead through a combination of stakeholder returns in the form of further debt reduction and today we're announcing our third share buyback program.

Obviously, IPC’s history and our DNAs and M&E and we've conducted four transactions and acquisitions in the last four years and of course, we have the capacity do more in the years ahead as we see the energy transition and we see the majors look at dispose of some of their noncore assets. And of course, we still have a very significant contingent resource base in excess of one billion barrels.

So, great strength on the financial front to continue to generate material shareholder value. 13:00 On the valuation side, if we you look at how IPC stands and compares based upon very conservative year end twenty twenty pricing, which assumes forty eight dollars Rand for this year, rising to only fifty seven dollars per barrel by twenty twenty five that gives you an asset value of one point sixty billion dollars if we take off the beginning of the year debt, that gets you down to a 2P net asset value of one point three billion dollars or seventy two fifty SEK per share using the current exchange rate, which translates into thirty four percent discount on some very conservative oil pricing.

So, either through the cash flow lends or the value lends and IPC screens extremely favorably. 13:54 So, turning now to the announcement this morning and the share repurchase and was it follow the company nor that we have already completed two share repurchase programs since the company was created back in twenty seventeen.

It those first two programs we have acquired a cancelled the total a of thirty four million shares and the average share price was disclosed thirty three set per share. So, a lot of value created from those first two share repurchase programs.

This morning, we're announcing the third share repurchase program and as I've mentioned, we've seen very, very good operational performance our production, this year looking to be around five percent above our original high end capital markets day guidance forecast. We're seeing continued strong pricing across the entire energy complex.

14:50 And as we've seen our twenty twenty one free cash flow, is significantly above our original high-side guidance and is more than double that of the global E&P industry average. Leverage is dropping like a storm point six times net debt-to-EBITDA at the end of the third quarter.

And from a value perspective, looking extremely attractive with a close to thirty four percent from our 2P net asset set value and that does not include a single dollar of value attached our in excess of a one billion barrels of contingent resources That's a very attractive value proposition, and that's why we're seeking approval to repurchase up to ten point eight million shares are approximately seven percent of our shares outstanding over the next twelve months under the Canadian normal course issuer bid rules. 15:47 Turning now to guidance a bit more detail on each of our assets and starting with them the Canadian business and our Suffield oil asset, strong production performance continued through the third quarter average around eight thousand barrels of oil equivalent per day back to above early twenty sixteen levels, and we're seeing continued strong performance from our N2N EUR development project that we started a couple of years ago.

16:16 Don’t have any major capital activities planned this year, but what we do still have a significant drilling inventory ready for execution is likely to feature in our twenty twenty two drilling programs. This year, focus was really on N2N well conversions and some optimization work on or South Gibson field and to keep those production levels relatively stable through the year.

16:45 Turning to Suffield Gas, and it's no surprise that we've seen extremely strong gas prices across the globe and that's also been a feature of the Canadian market interest of shown his presentation some of the recent gas price trends, which have been very strong in Canada. A Suffield Gas asset continues to generate very strong cash flow, not investing any capital in twenty twenty one.

We haven't drilled a new wells since we took over an operators ship, but what we can do, and you can see from the chart on the bottom left hand side of this slide be very active. On our optimization from and since we've taken operators of this asset, we've closed doubled the maintenance of swapping activity and that's allowed us to keep that gas production relatively flat and offset those natural declines in our Canadian Suffield gas business a great job done by the teams on the ground with very minimal capital there.

17:48 Turning to our Onion Lake Thermal asset, you can see on the production slide that we successfully completed our planned shutdown and turnaround during May that was to allow us to tie in our new D-prime well pads and that D-prime well pad was completed and brought online ahead of schedule in the third quarter, and we expect that to ramp up and had production in excess of one thousand five hundred barrels of oil per day on plateau. Rigs now moved than we are in the midst of our 5-well infill drilling campaign, which is due to complete and before the end of the fourth quarter, and the wells are drilled and we're just working on the completion and the time, and we should see the production impacts started to really ramp up during the first quarter of next year.

So, really good performance by the team and delivering the shutdown again in D-prime on the stream and making great progress on our 5-well infill drilling program. 18:54 And just as a reminder of the numbers that we showed alongside our second quarter results, for that 5-well infill program extremely attractive metrics.

We're tackling about three five million barrels of unswept oil with a breakeven WCS price of twenty dollars per barrel. You look at WCS prices to be treated close to seventy dollars per barrel and with have payback at Brent prices of fifty five dollars per barrel in only one year and these are extremely attractive infill wells to be executing.

19:31 Turning to our Ferguson assets in Canada, minimal investment activity during this year and we have done some gas injection and repressurisation work through some low cost effective well conversions. We've got the potential with this asset, this is the asset we acquired from Granite in late twenty nineteen.

We did suspend all we development activity during the pandemic last year, but we have got the potential to more than double our production with multiple drilling locations execution ready, and this is likely to feature in our development plans as we move into twenty twenty two. 20:15 On the conventional side, and our John Lake primary has been ramped up with the very strong Canadian pricing environment that we've seen likewise with our Mooney asset.

We're also ramping up production that we started in the second quarter again with the strong Canadian crude pricing. When we look at our overall Canadian conventional assets.

We've been able to ramp up production at around eighteen hundred barrels of oil equivalent per day. Again, tremendous job done by the team to reduce that production last year through the pandemic and bring it back up to pre-sudden rates following the recovery that we've seen in Canadian crude pricing.

21:00 Blackrod which is the biggest portion of our contingent resources just under a billion barrels of our contingent resources, the third well pilot program continues exceed expectations. You can see the recent production we're sustained at production at above eight hundred the barrels of oil per day and that's close to fifty percent increase in the productivity that we saw from barrel two that's important because if we can dream more oil from smaller number of wells, it can improve the overall project economics through less well pads, less infrastructure reduces our environmental footprint.

So continued good response that we're seeing on that third well pure pilots on our Blackrod’s project. 21:53 Turning now to the Malaysian business, Every quarter, we have the same story close to one hundred two percent facility uptime on our Bertam FPSO and a strong base well production performance.

And during the third quarter, we did complete a planned maintenance shutdown slightly ahead of schedule and on budget and one of the main reasons that we wanted to take that shutdown was to increase the produced water handling capabilities of the Bertam FPSO, and that sets us up to drill the A15 sidetrack produce higher liquid rates and also the pump up sizing campaign that will follow the A15 drilling. So, again great job done by the team to deliver a there Bertam FPSO debottlenecking project.

22:45 The A15 sidetrack well has been sanctioned, as I mentioned in the highlights and the capital guidance. And this was, the still is schedule to commence drilling in Q4 is not likely to start in December of this year, slightly delayed from our original plans in as a result of the operator who has the rig having to sidetrack last well and their drilling program resulting in a delay in us picking up that rig.

So first all is no, not expected until early twenty twenty two amazing project, one point five million barrels of resource to attack breakeven brand price of less than twenty dollars per barrel and of course, our Bertam crude traded a premium to Brent so with Penn prices and above in excess of eighty five dollars a barrel with the premium amazing rates of return from this project hundred and fifty percent rate have return fifty five dollars per barrel and a fifty five dollars barrel per Brent one year payback. So, results lately to be much better than those that we're publishing here in this slide.

24:01 The pump up sizing campaign, which will continue after the drilling of the A15 well in the first quarter is expected to be completed before the end of the first quarter. That should have incremental production on average around eight hundred barrels a day and very similar metrics and to the A15 drilling twenty dollars and per bottle brand breakevens and paybacks around one year at fifty five dollars per barrel brands, a nice production bump that we should see on our better asset as we move into the new year.

24:36 In France, same story again excellent performance and delivery from all of our producing fields. If you look at the production plot on the top right hand side of this slide you can see the performance of our Long Beach horizontal VGR one month fee well, production rates have stabilized that around nine hundred barrels per day and you can see from our pre-investment forecast, which were around six hundred barrels a day were producing at fifty percent above those expectation levels, so it's been a tremendously successful drilling campaign on our VGR project.

25:17 We had originally expected water to come the year ago in the third quarter of twenty twenty and we still haven't seen any water any water in this well through the third quarter of twenty twenty one and good results that we’re seeing from that VGR five injector conversion that we did to support pressure to the 113 well, so very stable production in France over the last quarter at around the three thousand barrels per day level. 25:49 Finally, on sustainability and ESG alongside our second quarter results, we did publish our second sustainability report and we conducted a materiality assessment earlier this year, which means that the report just issued is fully GRI compliance one of the core principles in terms of our emissions reduction strategy is to reduce IPC’s net commissions and intensity by fifty percent through twenty twenty five and we've been able to do that through a combination of reducing our operations emissions and securing carbon offsets and we've doubled the number of carbon offsets to cancel through twenty twenty one up from fifty thousand tonnes last year to one hundred thousand tonnes from twenty twenty one and that's been doubling in conjunction and with our partner first climate.

26:48 So that concludes one of the records quarters that we've never seen since IPC was started back in twenty seventeen or pass the floor now Christophe will go through more detail at a very strong financial numbers. So, Christophe, pass this over to you.

27:09 Thank you very much. Mike.

Good morning to everyone. Indeed, it’s very pleasant to be here standing in front of you again for very good set of results.

The first comment and I think Mike consisted on rightly. So, we've been carried by a very supportive oil and gas price environment obviously, but the performance of our assets in terms of production is nothing short off of exceptional, being significantly above the high end of our capital markets their previous guidance.

And so, for the third quarter with a production that is just short of forty seven thousand barrels of oil equivalent today, it brings the nine months average in excess of forty five thousand barrels of oil equivalent per day and we feel very comfortable to guide that we should be an excess of that level for the full year guidance. As I just said the oil price environment is very supportive.

We saw an average Brent price of seventy three point five dollars per barrel for the third quarter and an average of sixty eight for the first nine months. And as you know, the fourth quarter seems to two point even significantly higher than that.

So, we expect the good performance to continue and improve again in the fourth quarter. 28:45 Operating costs have been remain under the control and been a bit lower in this third quarter at fourteen point seven US dollar per BOE lower than the previous two quarters, and that's a direct reflection of the higher production during this quarter.

Operating cash flows and EBITDA for this quarter are around ninety million US dollars giving the full first nine months operating cash flow, which as you know, is the revenues less OpEx less cash taxes in excess of two hundred twenty five million US dollar. As a result, the net debt has reduced significantly actually held from the end of last year from three hundred and twenty one million US dollar, but down to one hundred and sixty one and we expect that net debt to continue reducing significantly between now and the end of the year.

Already on net debt to twelve months EBITDA, the rolling basis has come down from three times last year to zero point six times and should further reduce, as I just said at the end of this year. Another important measure of this piece is the free cash flow, which was a recorded high this quarter at seven million US dollar and one hundred and seventy six million US dollar for the first nine months.

And we had some oil hedges where we lost for the first nine months, twenty three million dollars. So, in the absence of any hedging of free cash flow for the first nine months, we have been actually two hundred million US dollars.

Again, we got high from since IPC Inception. 30:40 Terms of realized price.

So, as I said, it's been the most supportive oil price environment. At least since twenty nineteen and we can note that the differential is very important it's not just the headline brand prices we need to focus but obviously is the WTI and also for Canadian business as you know, the Western Canadian select and the differential between the WTI and the WCES and the brand WTI differential have been consistently tight around to two to three US dollar per barrel of the last couple of years much tighter than in twenty nineteen and the very important point is that that the WTI, WCS differential has been constantly tight around twelve US dollar to thirteen us dollars per barrel over the last two years.

So, it's really an important factor because you see that over the last two years, the WTI has considerably increased, but the differential has remained at the same level. So, obviously, our realized prices have considerably improved over the last eighteen months.

32:01 In Malaysia, we consistently sell above Brent price so realized prices for the first nine months are two dollar above the Brent level, but I'm happy to report that the market continues to pick up and we see that premium significantly increasing again in Malaysia in France. We tend to sell just on par with brands.

And that is the case for the first nine months at just about zero point six zero dollars above the Brent price of the first nine months. And in terms of the WTI, so it averaged fifty two and a half, but as we speak, we are much closer, we're between sixty eight and seventy US dollar for the WCS.

So, you can expect a much stronger, even a stronger realized price for Canadian oil production in the fourth quarter. 33:03 Looking at the gas prices now, it's since the logistical issues that the gas network faced in twenty nineteen in Alberta, so that was fixed at the end of twenty nineteen.

And so, you can see on that graph that there's a very strong correlation between the US Henry hub gas price in dollar per MMbtu and the echo which is the Alberta reference gas price in Canadian dollar per Mcf. 33:38 And it may not be exact on a day by day basis, but week or couple of weeks the correlation is extremely strong, and this is what you see on these graph with the blue line in terms of realized price and you can see that going ahead, the Henry Hub continues to increase and so does the eco gas price.

So again, even more constructive gas price heading into Q4, but to mention that’s on average, you can sell the eco gas price in excess of four dollars for the entire year next year twenty twenty two. 34:21 Looking at the realized price for the third quarter, so we realized that three point seven two Canadian dollar per Mcf, that was the best performance in the third quarter ever and close to the highest for IPC.

34:38 Looking now at operating cash flows and EBITDA, I mean, as much as twenty twenty was difficult to twelve months make and it's very nice actually to be comparing our performance our financial performance in twenty twenty one compared to last year. We can see that IPC assets and portfolio assets are extremely talky to the oil price and in a much higher oil price environment, the financial results and the talk is phenomenal to that upside.

So, I won't well on the numbers again, but just mention for the first nine months in this year, the EBITDA and operating cash flow are both in excess of two twenty million US dollars. 35:27 In terms of OpEx, you can see a reduction this quarter, which was mainly driven by an increased production close to forty seven thousand barrels of oil equivalent per day.

We are maintaining our full year guidance at fifteen point five, but it's fair to say it's probably on the conservative side, and we expect to be better than that for the full year. Depending on whether the production stands for the fourth quarter, but it's it looking good so far.

In terms of net back, happy to report that operating cash flow EBITDA and the US dollar barrels of oil equivalent basis for the third quarter was seven to eight US dollar higher than the high case. We previously guided at our capital markets so really strong performance, and you realize that because there's a very low level of cash taxes, we basically only take cash taxes in France because we have lots of tax losses put forward.

We benefit almost directly to the bottom line of all the increased oil and gas prices. 36:51 Looking at the cash flow, the operating cash flow and how that contributed to the net debt reduction I mentioned.

The net debt half in nine months, we went from a net debt of three hundred and twenty one million US dollar at the end of last year down to one hundred and sixty one at the end of September. The trend is expected to continue obviously in the fourth quarter and it's good to see that G&A OpEx are under control.

The operating cash flow increased significantly so good. So net debt reduction other consequence.

37:29 Just talked about OpEx in terms of G&A, they remain flat and under control as well and in line with the previous years. So, we're managing to maintain low and essentially flat G&A costs year and quarter on quarter.

In terms of the financial items, it's important to focus on the cash items there, and you can see as a consequence of this year – of the debt reduction, the cash interest, expenses and related loan fees are reducing in the same proportion. 38:10 Looking at the financial results.

So, we generated over the first nine months excess of four fifty million US dollar so that drove cash – that generated cash margin of just try of two thirty million US dollar. Gross profit of one hundred and thirty one and the first nine months net results are just shy of eighty million dollars.

38:38 Looking at the balance sheet you can see that we would had as you know, and as Mike mentioned, reasonably light investment CapEx this year. So, the depletion of our assets was higher than our CapEx showing a reduction in the value for oil and gas properties, but the current assets increased as a result of higher receivables due to just higher reduction and higher oil and gas prices as well as increased inventory because we are carrying a lot of oil on our FPSO Bertam at the end of September, as we were going to have a lifting in October, which happened already.

On the liability from this point to note is the reduction in financial liabilities, which we've described already. In terms of hedging nothing changed really from the last quarter.

So, we are not hedging any oil from Malaysia and French operations. We have a very, very low leverage there and a reasonable low CapEx program and that CapEx program has a very quick payback.

So, we didn't feel like we had to do any hedging there. In Canada, we had roughly forty percent of our oil reduction hedged over the second half this year.

At this stage we've not put in place any oil hedges for twenty twenty two given the very strong market dynamics there our expected manageable CapEx program for twenty twenty two, which we will disclose to the market at our capital markets the next February. And so, we fully benefits from the potential upside at this stage for twenty twenty two.

40:37 In terms of gas so, we've hedged a roughly twenty percent of our gas production for the next year's first nine months. We might put a bit few more hedges for gas given the very very strong market again, as I said for the next – for the entire next year.

So, it's cyclical prices system tend to be much stronger during the winter period but including winter and summer for the whole next year, we could actually sell follow-up some of our gas in excess of four million dollars per Mcf and strictly we've set up budget for the two fifty so you can tell how strong that market is and how profitable our gas business is in Canada. 41:25 Lastly, as I touched upon the free cash flow for the first nine months was as high as one hundred and seventy six million US dollar for the first nine months, had we not hedged anything in twenty twenty one so far the free cash flow would actually have been two hundred million dollars because we had twenty three million US dollar as of hedging losses, but we’re obviously happy where we stand and expect to post another good quarter, the next quarter in terms of free cash flow.

So, I will let Mike conclude. Thank you very much.

42:06 Thank you very much Christophe and do all agree that’s been phenomenal set of numbers delivered during the third quarter. So just to come back and conclude again with the highlights for the third quarter of twenty twenty-one, it’s been an extraordinary operational delivery across all the business units, production for the third quarter above high-end guidance just under forty seven thousand barrels of oil equivalent per day, increasing guidance again, now it's above forty five thousand barrels of oil equivalent per day for the full year.

42:48 As Christophe alluded below guidance OpEx during the third quarter and probably a relatively conservative fifteen fifty forecast retained for the full year and the capital expenditure program are expected to be fifty million US dollar with some refacing of our Malaysian CapEx into early next year. I watering cash flow numbers ninety one million dollars or OCF for the third quarter, a record for the company allowing us to uplift our guidance for the full year to three fifteen million dollars to three thirty five million dollars.

Free cash flow in just one quarter of seventy seven million dollars, again, leading to an uplift on our full year numbers up to two forty to two sixty million dollars and as Christophe mentioned that we didn't have any hedges in place for this year, we had been having more towards the three hundred million dollars level. That represents on those forecasts, a full year free cash flow yields of between twenty eight percent to thirty percent which is more than double the global E&P industry average.

44:03 Net debt dropping like a storm just over one hundred and sixty million dollars by the end of the third quarter. And leverages down to zero point six times and relative to three times up the year end.

And as Christophe mentioned, the fact that we have not got any oil hedges in place from next year means that like-for-like, the cash flow generation capacity of the assets should be stronger as a move into twenty twenty two. ESG side raw material safety our environmental incidents, second, sustainability report published alongside our second quarter results for the GRI compliant and on track to deliver our net emissions and intensity adoption by fifty percent through the end of two thousand and twenty five and last but not least on the back of such strong operational delivery and strong energy prices of trust entire complex and the value proposition and free cash flow yields that we see for IPC lid us to be very pleased to announce our third share repurchase program this morning following our spin off in twenty seventeen.

45:20 So that concludes a record making quarter to the company. Happy now to pass the call back to the operator, and we can take questions from those joining on the conference call, and you can also send them your questions via email.

So, let's open for questions.

46:09 Good morning and thanks for taking my questions. Three questions.

First one on your share repurchase, which is a good to see that you announced. I just want to hear your consideration on cash dividend versus buyback so while you for a buyback, second question on the facing in Malaysia how to assume that will impact twenty twenty two production, I guess it maybe will be minor negative effect.

And third question is you highlighted that you have had strong from gas for twenty twenty two, but no hedge that you takes for or you just wanted to hear where it's tempting almost to put some places, put some places on ? Thanks.

46:58 Yeah, Teodor. I'll take the first question on the rationale for the share buybacks.

So, I think as we alluded to in the presentation. I think if you look at where IPC is trading in terms of its free cash flow multiple and relative to our market cap, if you more than double industry average or on some extremely conservative oil prices, will go from forty seven dollars this year up to fifty seven dollars by twenty twenty five.

We're still seeing a thirty four percent 2P net asset value with such strong metrics, that was really favored than as moving forward with the share buyback as our first step and shareholder distributions. 47:45 The second question on the phasing of the of the Malaysian drilling we expect to pick up the rig and commence drilling in early December.

So really that twenty three million dollars that's been received from twenty twenty one into twenty twenty two is likely to be largely spent in the first quarter of twenty twenty two with early production and during that first quarter from the A15 sidetrack well. 48:15 Third question on hedging, Christophe, do you want…

48:17 Yeah, on hedging, so, yeah, no, you're right at this stage. We don't have any oil hedging for twenty twenty two.

And really if you look back for the last the last three years on average, we had twenty to twenty five percent of four Canadian oil production hedged, which was a combination of factors and driven by the level of CapEx and the level of debt. As I was hinting before, we expect for the significant reduction in bet by the end of this year and a manageable CapEx program, and we tend to set up budget also at a lower level than the oil price we've seen in the market and the third element is that the market in backlog basins were actually, you can hedge at a significantly lower level than what the current oil prices are.

So, when you put all of these elements together, I'm not suggesting we will never hedge twenty twenty two, but the reality is that we are not hedged and we don't have any immediate plan for hedging, we would like to offer that upside to our investors and shareholders for the time being and the spending in terms of future CapEx, that load or buyback is obviously included in this reflection now in terms of gas, we've seen gas prices soaring across the globe, maybe that as much North America than we seen in Europe, but still a very significant run in Canada following the Henry Hub that's why we were showing the correlation between Henry Hub and the echo gas price and we might add some hedging there. We've had already twenty percent and we expect another good year in twenty twenty two based on the fall market suggest.

50:21 Okay, thank you. That's clear.

And congrats with strong results, that’s all for me, thanks.

50:26 Thanks, Teodor.

50:26 Thanks.

50:54 Okay. Thanks, operator.

We have a couple of web questions here. So, Christophe, first of all, can you comment on the profitability of the gas business for urgency?

51:07 Yes. So, way to add, so usually don't disclose really the OpEx programs yes.

What I can say is that we already enjoyed a very good profitability when we use two fifty CAD per Mcf for our budgets. So, you can imagine that three hundred one point one, the gas price is actually from next winter – for this coming winter cross, end of twenty one and early twenty two is five Canadian Mcf.

So, we're talking about a multi Canadian per Mcf profitability net of OpEx.

51:44 Thanks, Christophe. And Mike, so we have a couple of technology price questions here.

So, what does your price environment? How is it impacting the asset market?

And are you still seeing of opportunities of value accretive deals in Canada?

52:01 Yeah. I mean, of course, it definitely having an impact on the asset market.

I wouldn’t say that companies that Russian to materially upgrade their long-term oil price forecast for acquisitions to benefit like seventy five to eighty five right now. I think what we have to do now in asset market is more creative when your structure and acquisitions.

So, for example, typically, at this point in the cycle, when you see such a rapid increase and continued payments and some of the upside share and start to feature, and transactions enable to proceed successfully. So, really just structure things tend to change where you see such an uptick commodity prices.

But there's absolutely still interest and assets out there in the market in Canada and internationally, we really always keep our discipline, always has to start with the quality of the subsurface that we’re still active as ever on the M&A front you just have to be more accretive on structure.

53:08 Okay. Thank you.

And then thinking about twenty twenty two in particular, are you looking to dividends and buybacks as a solution to squeeze that differential between the market Cap and NAV? And then specifically when will you consider cash flow?

53:24 So the short answer is, yes. We announced this morning, third a share repurchase program.

And clearly with free cash flow generation of between seven forty million dollars and one point two billion dollars between fifty five and seventy five brand as we've said, we've got a lot of flexibility to look at the returning cash to shareholders in the years ahead. So, very pleased to announce commencement of that this morning.

53:53 Okay. And how do you plan to monetize that growth resources?

53:57 So, I think it's a step process. And I think when our prices were much lower a couple of years ago, we do the fairly bold control move continue to invest and complete the third pilot well pair of extending length to the horizontal drilling section by fifty percent.

So, the first answer is by using the latest technology and drilling longer reach horizontal wells to improve the productivity of the project to try and get the cost based down. That was one of the first tenants of unlocking the value proposition of Blackrod.

The second as we've said for many years and the follows that can confirm an approach we took the three Canadian acquisitions were made in the past four years was waiting for the addressed position and the pipeline situation to improve and with Enbridge is lately three coming on during mid October and trends likely to be completed by the end of next year that completely changes the market dynamics or Canadian address and shields materially changed Canadian differentials in the next five to ten years. Of course, that provides a much solid and commercial framework for work Canadian crude price differential and of course, with very very strong benchmark prices and project like Blackrod start to become more interesting.

So, I think it's a combination of technology and the market environment and as we see things those things are starting to corporate up in synchronization so, we just need to see the continued sustained productivity of our third well payer, but so far so good.

55:52 So it's Kind of like me to remain this like it's region for M&A or are there any other type of things we prefer like Mexico, Malaysia?

56:01 Nothing's really changed since the spin off as I mentioned, if you look at any of the lending companies where they were successfully creating values, starts for the quality of assets. So, we continue to stream assets in Canada and internationally we can see the upside that we can bring and unlock that value and then we're open to still even into through the jurisdictions.

So, no, we're not just ready to look at Canadian acquisitions as where we can see best value proposition for our shareholders.

56:35 Okay. Thanks.

I think we have one more question from the operator. So, we could just switch back to the operator for that question.

56:48 Thank you. Good morning.

I'd like to ask an operational side of things. So, Onion Lake has seen the investment and we'll be seeing the investment through towards the end of the year.

You also mentioned in the call, how Suffield Gas you haven't drilled in a new wells since taking out assets, but you had great success resolving activities. Could we call then about the possibility of drilling new wells at Suffield is that a possibility say twenty twenty two, or is there a barrier to drilling me well?

That's my first question. Thank you.

57:22 Yeah. Thank you, Mark.

And this is a very good question. And the short answer is, we do have a material inventory of new gas flow is in our contingent resources two point five thousand locations booked, which is about thirty million at BOEs of our contingent resource space.

I would say less likely next year that we would start new gas drilling, notwithstanding that significant inventory because what we would most likely do if we chose to ramp up our gas activity as repeat some of the refractory and recomplete work. That we've got from our existing well stocks.

So, we see much higher returns and much quicker payback if go into the existing well stocked and spend a better of capital accessing some new bypass and reservoir horizons. So, I would say most likely in the short-term and it would be further gas optimization from the existing well stock.

Four drilling new gas wells, but we do have not insignificant inventory there.

58:28 Got it. Okay.

Now, very clear and then so, by contrast that was close to Onion Lake could possibly see more well pads. That be the case?

58:39 Absolutely. I mean, if you look at the our 2P reserves lake, I think around one hundred and sixty one hundred and seventy million barrels and the current facility that we can keep those production levels relatively stable for the next twenty plus years by just drilling the new well pads.

So, absolutely you're like me to see and continued investment in new well pads in the years ahead. And also, on the back of the annual results, we're seeing from the infill drilling program, the team is also looking to see if we can read some additional infill drilling locations and from our existing well pads because clearly the returns that you get such minimum investment are very attractive as you can see from the numbers in the presentation.

So, it's going to be a combination going forward Mark, on both new well pads and hopefully some additional infill drilling.

59:36 okay. And then Christophe is very clear on not planning on hedging any oil.

We also mentioned to check if it's hasn't been answered. Check on gas side things because Christophe mentioned you can sell gas at four dollars a barrel or twenty two if you wanted to, does that appear an attractive market to hedge some gas into twenty two?

60:01 Yes. It does and we always monitor when to play those hedges, we replaced some in the last couple of months, the market has continued to be even more bullish.

So, we may hedge furthermore trying to understand or see where the market is growing. But yes, it's slightly at some point, we're looking some more hedges that the level.

60:30 Okay. And then last point is those media reports that you started process to sell your assets in France.

Could you speak to that, please?

60:41 Yes. I think we never comment on press speculation Mark.

And so, I think, when we look at the French business as you can see the performance from recent BGR and low rate horizontal drilling were produced at above fifty percent from the pre-investment rates and there's still a lot of upside forget, we did suspend the redevelopment of our western flying curve of our assets. So, I think there's still a huge demand of running room in our French business, and it's got one of the best fiscal takes in the world.

So, I think France has still has huge value proposition for the IPC Shareholders.

61:27 Okay. Thanks and wonderful results.

Good luck for future. Thank you.

61:30 Thanks very much, Mark.

61:32 Thank you.

61:34 Okay. I think that concludes the presentation.

So, I just like to finish by thanking everyone for tuning in and see your attention this morning and we look forward to presenting our year end results and Capital Markets Day and updates in early February. So, thank you very much once again.

61:53 Thank you very much.