Q2 2026 International Petroleum Corp Earnings Call
Speaker #1: Welcome to IPC's 2026 second-quarter results update presentation. I'm William Lundin, the President and CEO, and I'm joined today by Kristof Nørregren, our CFO, as well as Rebecca Gordon, our SVP of Corporate Planning and Investor Relations.
Speaker #1: I'll begin with the highlights and provide an operational update, then hand it to Kristof to walk through the financial section. After the presentation, we can take questions, which the audience can submit through the conference call or online via the internet.
Speaker #1: Getting right into the second-quarter highlights for IPC, our average production for the second quarter was right in line with guidance at 42,200 barrels of oil equivalent per day.
Speaker #1: And our full-year 2026 production guidance is maintained at 44,000 to 47,000 BOEs per day. Second quarter operating costs came in line with expectations at $19.10 per BOE.
Speaker #1: And the OPEX per BOE forecast for the full year is maintained as per the original CMD guidance, at $18 to $20 per BOE.
Speaker #1: And, of course, the major announcement in the quarter for the company was achieving first oil at Blackrod, the largest organic growth project IPC has undertaken since formation in 2017.
Speaker #1: And to execute ahead of schedule and on budget is a huge achievement that we're very, very pleased about. Similar to production and OPEX per BOE guidance, we're maintaining our CAPEX guidance at $163 million for 2026, noting the majority of the capital has been spent in the first half—$120 million, or around three-quarters of that capital budget.
Speaker #1: Q2 capital spend was $49 million. Operating cash flow for Q2 was robust at $67 million, noting oil prices were higher in the second quarter relative to the first quarter, averaging around $100 per barrel Brent.
Speaker #1: But 40% of our oil production exposure was hedged at a WTI price in the low to mid-$60s, and for the Brent side, between the mid to high-$60s for Brent.
Speaker #1: So, despite those hedges in place, we still see a robust print in cash flow. Our full-year OCF is forecast at $230 to $330 million, assuming $70 to $90 per barrel Brent for the remainder of 2026.
Speaker #1: And free cash flow for Q2 was a positive $4 million, noting this is the first quarter of positive free cash flow since 2023 as we transition from a higher spending period during the Blackrod buildout to startup.
Speaker #1: Full-year free cash flow is expected to be between $10 million and $110 million at Brent prices between $70 and $90 per barrel for the rest of the year.
Speaker #1: Net debt as at the end of Q2 stands at $509 million, about a $4 million reduction relative to the prior quarter, thanks to the positive free cash flow delivery in Q2.
Speaker #1: We have greater than $150 million of undrawn credit availability under a Canadian bank syndicate. And as of July 1, 2026, our oil production is fully exposed to WTI and Brent oil prices, with the prior benchmark oil hedges rolling off, as I had mentioned previously.
Speaker #1: There are some Canadian heavy oil differential, transport, and quality-related hedges for the remainder of '26, and some into '27, that are in place, as well as some natural gas hedges that are also in place for 2026, all of which are in the money currently.
Speaker #1: And our seventh annual sustainability report was issued alongside our Q2 results. As can be seen on the production plot, we've seen continuous, flat production performance through the first six months of the year, with average rates of around 42,600 barrels of oil equivalent per day.
Speaker #1: Stable performance across the portfolio year to date, and really looking forward to the imminent production growth going into the second half and beyond. As mentioned, we're well-positioned to deliver on our annual production guidance for 2026 of 44,000 to 47,000 barrels of oil equivalent per day.
Speaker #1: The guidance bands in the production forecast show a progressive production ramp-up in the second half of the year, and that trend will continue into 2027.
Speaker #1: The increased forecast is predominantly due to the Blackrod startup and partially supported by intra-year production investment additions at existing producing assets, which will yield more of an impact at the end of this year and going into 2027.
Speaker #1: I'll touch on more specific activity details in the following slides. Q2 is the inflection point from a production standpoint, and higher production quarterly averages will shine through going forward as we transition from the inventorying period at Blackrod to consistent sales mode in Q4.
Speaker #1: We'll also see a material uplift in cash flow generation. Our current production mix is split 70% towards oil and 30% towards natural gas—which is important to highlight. As per my previous comment, with a larger proportion of oil-weighted production coming imminently, our future production mix is going to be weighted even more towards oil versus natural gas, leading to increased cash flow.
Speaker #1: Operating guidance is maintained at $18 to $20 per BOE, with Q2 costs settling in at $19.10. As previously reported, we added some production enhancement activity that is going to be expensed, most of which will fall into Q3, which is expected to be a slightly higher OPEX per BOE quarter before dropping in the subsequent quarters.
Speaker #1: Christoph will expand on this evolution in his section of the presentation. So, operating cash flow for the first half settled in at $134 million, with an average Brent price of $92, a WTI price of $82, and a WCS price of $68.
Speaker #1: It has been a volatile period on the pricing front. So far, year to date, the cash flow and corresponding prices were higher than our original CMD guidance, as shown on the right-hand side of the slide.
Speaker #1: So we're pleased to see higher cash flow generation coming through. Looking forward to the full-year OCF, we expect to generate between $230 million and $330 million, between $70 and $90 Brent.
Speaker #1: Assuming a differential of $5 from Brent to WTI, and $14 from WTI to WCS, the proportion of operating cash flow is heavily tilted towards Q4 compared to Q3 for the second half, as can be shown with the lighter shading on the bar chart in the middle of the slide.
Speaker #1: This is largely due to the previously mentioned additional activity taking place in Q3 and the inventorying treatment at Blackrod. The torque to higher prices is significant, and we are fully exposed to Brent and WTI prices going forward since the Brent and WTI hedges concluded.
Speaker #1: At the end of June, our capex program, inclusive of decommissioning spend, is maintained at $163 million, noting we did increase the capital budget at Q1 relative to capital markets day, largely in part due to the sanctioning of short-cycle investments in France and the Suffield area assets in light of the higher commodity pricing environment that we saw as the year progressed relative to starting 2026.
Speaker #1: We do retain flexibility to adjust our program for the second half, given our operatorship status at all the assets in our portfolio. Free cash flow is projected to be $10 million to $110 million between $70 and $90 Brent for the remainder of 2026, and returning to a free cash flow positive position is really fantastic to see.
Speaker #1: And the waterfall of free cash flow will significantly grow in the years ahead. So, since inception, IPC has repurchased 77 million shares at an average price of 79 SEK per share, or CAD $11 per share.
Speaker #1: This translates into around $1 billion of value creation compared to our current share price. We have the ability to repurchase up to 6.5 million shares through our normal course issuer bid program, which represents 10% of the free float.
Speaker #1: And our current share count today is less than 113 million shares, notably lower than the original share count in 2017. So, driving up production value, reserves, and resource longevity per share is really a key ingredient to maximizing shareholder value.
Speaker #1: As previously reported to the market, Blackrod Phase One is officially producing oil, achieving this milestone at the end of May, ahead of the original scheduled guidance.
Speaker #1: Costs came in line with the budget at $855 million in growth capital. We currently have five well pairs online, with several other well pairs to be converted upon necessary conformance conditions being met.
Speaker #1: We held a Blackrod site visit at the beginning of July with our Board. The pride and sheer competency of the top-tier talent at the site is really off the charts.
Speaker #1: And the state-of-the-art facility is off to a fantastic start as we get into operational startup and ramp-up mode. So this is really a unique feat in the industry: to deliver a multi-year growth project on budget and ahead of schedule, with no material safety incidents.
Speaker #1: Really, hats off to the entire team involved for executing this transformational greenfield project responsibly. Blackrod is a long-life asset, and that is officially unlocked as the phase one CPF is now on stream. Plateau production for phase one is 30,000 barrels of oil per day, and we have 311 million 2P reserves assigned to the phase one project, which represents around $1.4 billion in net present value using a 10% discount rate, based on the conservative year-end '25 reserve auditor price deck.
Speaker #1: Along with the 2026 break-even of $47 WTI, we have regulatory approval at this asset to go to 80,000 barrels of oil per day, and the combined 2C plus 2P volumes represent 1.45 billion barrels of recoverable resource.
Speaker #1: As shown on the graph at the bottom, there's been a substantial increase in the total recoverable barrels compared to the early volumes in 2010.
Speaker #1: So, the depositional environment at this asset really lends itself to a scalable and repeatable upside. And we continue to work behind the scenes to mature future phase expansions, which are yet to be recognized in their underlying net asset value or future cash flow projections.
Speaker #1: Moving on to Onion Lake Thermal, OLT has delivered stable production through the first six months of the year. This is our Saskatchewan thermal operation.
Speaker #1: We did shoot some 4D seismic earlier this year. That data is under review, and preparations are ongoing for the next sustaining capital activity. At the Suffield area assets, this consists of our Suffield block acquisition that we acquired from Synovis in early 2018, as well as the Brooks package that we purchased from Core 4 in 2023.
Speaker #1: And this package overall continues to deliver stable, low-decline, reliable production, and we're super excited to be drilling again here within the Basal Quartz formation for production. Multi-leg lateral wells are planned to be drilled.
Speaker #1: And first half production from our Brent-linked assets was around 5,000 barrels of oil per day. Drilling is underway in France with a four-well sidetrack campaign.
Speaker #1: Initial results from the first well are very encouraging thus far. We look forward to future reporting on the progress of this campaign. Malaysia-dated Brent premium realizations have been very material, as Christoph will share.
Speaker #1: In his section of the presentation, and with workover activity ongoing in Bertram, this will boost production rates from current levels looking ahead into Q4.
Speaker #1: Now, I'll hand it over to Christoph to expand on the financial highlights.
Speaker #2: Thank you very much, Will. Good morning to everyone. So it was a solid quarter operationally. So hands off to the all of the hats off to all of the teams locally with the production rights in line, with guidance in excess of 42,000 barrels of oil equivalent per day.
Speaker #2: We saw some very strong oil prices during the quarter, with an average dated Brent price in excess of $100 per barrel. And so, with operating costs in line with guidance at $19 per barrel of oil equivalent, IPC generated strong operating cash flow and EBITDA of $67.64 million, respectively.
Speaker #2: I think what's really worth noting here is that, for almost the first time in nearly three years, the operating cash flow fully covers the capex.
Speaker #2: And that is true. That was true in the second quarter. And that is true year to date. So that's really the turning point we've been talking about for a while.
Speaker #2: With Blackrod first oil achieved at the end of May during the quarter, we are—we've not really turned the corner yet, but almost. At least we see a strong reduction in the Blackrod capex.
Speaker #2: And still a very strong operating cash flow. So we're really going to move back into positive free cash flow territory. That was the case in this second quarter.
Speaker #2: With a ramp-up at Blackrod in the third quarter, it may or may not be again the case, but we would hope to have another free cash flow positive or right in line with the second quarter.
Speaker #2: The real change will occur in the fourth quarter, with much stronger production from Blackrod, translating into what we believe will be a much stronger free cash flow toward the end of the year.
Speaker #2: So the net debt at the end of the quarter was reasonably flat, just around $510 million US dollars. Looking at the realized prices, of course, with the war in Iran, the oil, which was not flowing freely through the Strait of Hormuz, we saw very high oil prices.
Speaker #2: In April and May, specifically during the second quarter, with dated Brent price at $104 per barrel on average during the quarter, and WTI and WCS at $92.78, respectively.
Speaker #2: Those are very, very high-level, which we didn't fully benefit from because around 40% of our production was hedged before the war started, early March, in Iran.
Speaker #2: That being said, maybe just another comment that's interesting is that Will talked about it, but we were lifting cargoes roughly every two months in Malaysia.
Speaker #2: And the premium we get there is always an interesting indication of how tight physical markets are. Clearly, the June cargo, which was priced in April during the quarter, saw a very, very strong, very high premium, which showed how tight the market was.
Speaker #2: And again, for our next cargo in the third quarter, we've already agreed on a very high premium as well. So that's a sign that the physical market remains very tight.
Speaker #2: Looking at the gas prices, not much change, frankly. And sadly, the Canadian gas prices remain at a discount to the U.S. market. It's not fully or very well physically connected with the U.S. market, which enjoys higher gas prices.
Speaker #2: So during the quarter, we realized a price of $1.75 Canadian per MCF. It's traditional that there's an element of weakness for gas prices during the summer.
Speaker #2: But unfortunately, it stays well below U.S. gas prices. Looking at the operating cash flows and EBITDAs for the first six months in 2026, and comparing those to 2025, things are reasonably stable here.
Speaker #2: Production was a bit higher last year, while price was a bit lower last year as well. So it's roughly in line with around $130 million of operating cash flow during the first six months, both last year and this year, and $125 million both last year and this year.
Speaker #2: So I think, as we touched upon before, with a bit more one-off OPEX and more activity in terms of workovers in Malaysia and in Canada as well, we're expecting maybe the operating cash flow to be in line or lower in Q3, but much higher with the Blackrod contribution during the fourth quarter.
Speaker #2: And indeed, you can see on the OPEX per barrel—so we are maintaining our guidance—but you see that clearly with some of the activity which we sanctioned at the end of Q1 and which is really being carried out in this third quarter, you can see a bump in OPEX, in the operating cost per barrel, in that third quarter.
Speaker #2: That is well anticipated, and hopefully well communicated to you and the market. But on average, we're expecting to be in the second part of that $18 to $20 range, but stay within it.
Speaker #2: Again, I think it's important to anticipate and note that in the fourth quarter, as Blackrod production is going to further ramp up, you can see the natural decline in OPEX per barrel.
Speaker #2: And so, irrespective of what you can see here in the third and fourth quarters, I think it's important for us to reiterate that the mid- to long-term operating cost per barrel remains very positive and should be below what we see here once Blackrod is ramping up to its full potential at 30,000 barrels a day in the course of next year, towards the end of next year.
Speaker #2: Strong netback, obviously driven by the strong operational performance and solid oil prices. You can see here, both in the second quarter and for the first six months, results have remained relatively stable, with an operating cash flow netback in excess of $17 per barrel of oil equivalent and an EBITDA at around $16.5 per barrel of oil equivalent.
Speaker #2: Looking at the net debt, really at the cash flow, and I like and I want to emphasize again that for the first time in a while, you can see here the operating cash flow of 134 million US dollars for the first six months, which is covering more than all of our development capex.
Speaker #2: And abandonment cost. So we are moving into this phase where, finally, we are going to generate free cash flow. It's not fully the case yet for the first six months, but we're getting there.
Speaker #2: You can see that. So our operating cash flow fully covers our capex and cash G&A. And we believe that very soon, we'll be covering as well all of our cash financial items and working capital, which should put us in a solid free cash flow position.
Speaker #2: Please note that we had a $6 million sale of assets in the first six months. Those were lands, which we'd never really intended to drill.
Speaker #2: It's some accruals which we had collected over the prior years, and we were able to sell them to some Canadian companies. In terms of financial items, the situation on the balance sheet and the capital structure is very stable with our bonds and revolving credit facility.
Speaker #2: So you can see that we have net interest expenses of around $10 million per quarter, stable again quarter to quarter, and we're expecting stability again going into the third quarter.
Speaker #2: And G&A is stable as well at around $4.3, $4.2, $4.3 million US dollars per quarter, or just above $1 per barrel of oil equivalent.
Speaker #2: So, strong financial results, with almost $360 million of revenue, cash margin of $135 million, gross profit of $75 million, and a net result of $23 million for the first six months.
Speaker #2: The balance sheet— not much to mention here. The investment, of course, goes into increasing the value of our oil and gas property assets on the asset side of the balance sheet.
Speaker #2: And we're continuing to depreciate those assets as we are producing them. We have valued cash now, and we're usually maintaining around $10 million on the balance sheet.
Speaker #2: And otherwise, we draw or repay under our revolving trade facility as needed. The capital structure I mentioned is very stable. We have our five-year bonds with a coupon of 7.5%, maturing in 2030.
Speaker #2: So $450 million US dollars of bonds. On top of that, as an adjustment, if you wish, depending on whether we need it or not quarter to quarter, we have access to an equivalent revolving credit facility from our Canadian banks of $250 million US dollars, and only $100 million CAD were drawn at the end of the quarter.
Speaker #2: We have reduced our outstanding letters of credit now that the Blackrod project is finally on stream. So we have roughly $12 million Canadian dollars of letters of credit, just to support access to pipelines and some export facilities.
Speaker #2: And we had a very small amount under our French loan, which was fully repaid in the month of May. So we didn't fully benefit from the high oil prices, on only roughly 60%.
Speaker #2: We benefited from doing that in the second quarter because we had 40% of WTI and Brent exposure hedged. That is no longer the case—excuse me—going forward.
Speaker #2: We have no benchmark hedging going forward. What we have, though, for the next 18 months is we've hedged some differential. So we have, typically for this year, the differential—the WTI/WCS differential—hedged at minus 12.5, which is roughly $2 in the money.
Speaker #2: And depending on the months, you have the detail on this table. We've also hedged a part of the transportation cost between Hardesty, Canada, and Houston in the United States.
Speaker #2: And all of these hedges are in the money. And you can see around $6 million of positive mark-to-market on our balance sheet.
Speaker #2: So that concludes my finance section, and I will hand over to Will for the overall conclusion.
Speaker #1: Christophe, in summary, it was a solid second quarter for the company and a compelling outlook going forward. Q2 production was 42.2 thousand barrels of oil equivalent per day.
Speaker #1: OPEX of 19 dollars and 10 cents per BOE in the quarter. And the original capital market stay production and OPEX guidance is maintained. Capital spend in Q2 was 49 million USD and the full year 2026 outlook is maintained at 163 million dollars.
Speaker #1: Operational cash flow was $67 million for Q2, and $230 to $330 million is expected for the full year. We have an excess of $150 million of undrawn liquidity headroom.
Speaker #1: Our Sustainability Report was issued alongside our Q2 results, which I encouraged the audience to read. It highlights the responsible business practices undertaken in 2025.
Speaker #1: And this voluntary report is progressively aligned with the latest standards, such as IFRS 2. So, with that, I'll hand it to the operator to open the floor for questions. You can also submit questions online.
Speaker #3: Thank you, sir. Ladies and gentlemen, if you wish to ask a question over the phone, please signal by pressing star one. And please make sure the mute function on your phone is switched off to allow your signal to reach our equipment.
Speaker #3: If you wish to cancel your request, please press star two. You may also submit your questions via the webcast. Our first question is from Theodore Nielsen from SB.
Speaker #3: Please go ahead.
Speaker #4: Good morning, Will and Christophe, and thanks for taking my questions. Congrats on Blackrock first oil. My first question is directly on production guidance. As you mentioned, you achieved Blackrock first oil slightly ahead of expectations.
Speaker #4: I have the slightly earlier guidance, but you did not increase production guidance, even though first oil was achieved earlier than expected. Why is that? And my second question is regarding hedging.
Speaker #4: Christophe, you highlighted that you don't have too much hedging, at least on the oil side, going forward. Is that mainly explained by lower capex going forward—so lower commitments—or do you have any particular market view that drives that hedging strategy?
Speaker #4: My last question here is on share purchases. We purchased—I think we discussed this also last quarter—now that most of the Blackrock capex is behind us, should we expect you to do some more repurchases than you have done over the past couple of quarters, or...? Yeah?
Speaker #4: Any thoughts around that would be useful. Thanks.
Speaker #1: Yeah, thanks for the questions, Theodore. So, I'll answer the first question and the third question, and I'll hand the hedging question to Christophe to answer that one.
Speaker #1: So, you're right. We're really pleased about Blackrock first oil being achieved ahead of guidance. And I think, given the type of asset that we're talking about and with first oil being achieved, there are going to need to be 40 well pairs online to deliver 30,000 barrels of oil per day.
Speaker #1: So, we did have our initial set of well payers come on ahead of expectation, which is very positive. But at this point in time, I feel like it's still prudent to maintain the full-year guidance.
Speaker #1: And as we progress further into the year, we feel like we're pretty well positioned to deliver at least within the midpoint, and potentially in excess of that.
Speaker #1: So, we're maintaining the guidance as things stand at this point in time, but in the field, it's looking very positive at this point at the Blackrock asset.
Speaker #1: And on the share repurchase side, regarding the flexibility, that's right. As I had mentioned in the presentation, we have the flexibility to repurchase around six and a half million shares.
Speaker #1: We haven't done that yet, as we remain steadfast on executing Blackrock, which, of course, as you point out, is now on stream. We're pleased to see a marginal net debt reduction in this quarter.
Speaker #1: And we are monitoring macro and micro conditions as things stand, keeping a close eye on our liquidity, and we remain opportunistic to begin participating in that program.
Speaker #1: And the hedging front, Christophe?
Speaker #2: Yes, no, thanks for a very good question. Obviously, and I think we are generally bullish long term. The short term is much more difficult to take a view on, and changes almost on a daily basis depending on the statements coming from the White House in the US.
Speaker #2: Now, that being said, we also shouldn't confuse the very short-term daily volatility with the long-term oil prices, where we can hedge.
Speaker #2: There's a very significant—the curve is relatively steep and backward-dated. And so, we obviously cannot hedge at the current spot rates, but we are monitoring that.
Speaker #2: Now, the flip side is, we've always communicated that when the bulk of the capex is behind us, or we don't have any specific debt maturities, we will take a lighter approach on benchmark hedging.
Speaker #2: So we'd rather focus on hedging and securing good transportation costs for crude to the US Gulf Coast, or the absolute WTI-WCS differential. And I think we'll be a bit more cautious on hedging Dated Brent or WTI prices.
Speaker #2: It's not excluded, but we're going to take a much more prudent approach there.
Speaker #4: Okay, thank you. Makes sense. And actually, if I may, I have even one more question that is on CURE. Just please remind me, what's the latest you have communicated on the timeline for sanctioning of BlackRock Phase Two?
Speaker #1: Yeah, phase two and future phase expansions still lie within our contingent resources, so there hasn't been any prescriptive disclosure in terms of when the next expansion project takes place.
Speaker #1: But there is a lot of work happening behind the scenes, looking into multiple expansion opportunities there. As those plans mature, we will provide an update to the market at that point in time.
Speaker #4: Okay, thanks. That's all from me.
Speaker #1: Thank you.
Speaker #3: Thank you. As a final reminder, if you wish to ask a question over the phone, please signal by pressing star one now. We will pause for just a moment.
Speaker #3: To allow you to signal, it appears there are currently no further questions over the phone. With this, I'd like to hand the call back over to our host for any webcast questions.
Speaker #5: Okay, thank you, Alfredo. We have a few questions from the internet here. So, just kicking off with a question regarding the portfolio—perhaps you can comment. With BlackRock now upstream, is now the time to rationalize your portfolio and divest your international assets?
Speaker #1: The asset base that we have has demonstrated high cash flow generative ability, and the foundation of existing assets has really supported us to put us in a place to be able to unlock the likes of Blackrock Phase One.
Speaker #1: There's still a lot of life left in the portfolio beyond Blackrock with the existing producing assets. We do think of ourselves as ruthless capital allocators, and we're interested in maximizing value.
Speaker #1: There's no imminent processes at this point in time to note.
Speaker #5: Okay, thanks very much. We had a few questions on hedging, Christophe, which I think you've covered here. But maybe you could comment on, given we've only got $40 million remaining capex for the year.
Speaker #5: How does management think about the opportunity to increase this, to take advantage of commodity prices, versus paying down debt?
Speaker #2: Yeah, increasing capex, you mean?
Speaker #5: Yes, increasing activity here.
Speaker #2: Yeah, no, it's—well, we've already leveraged, to some extent, or in our portfolio we have short-term, quick-payback activity sets. So we've committed to increased activity, as you know, at the end of Q1.
Speaker #2: We are constantly looking and trying to high-grade those options and possibilities. We mentioned earlier, in response to the other question, that we're working on future potential phases at Blackrock.
Speaker #2: So there's always an opportunity to spend $2 million or $3 million in accelerating those future phases and expansion, which we're working on in any case.
Speaker #2: Which may be considered opex or capex. So I think we're very active generally. We don't anticipate significantly increasing further capex this year, but a lot of activity is happening behind the scenes already.
Speaker #5: Okay, thanks, Christophe. We do have another couple of capital allocation questions, but I think one here that we haven't covered is: are dividends something that's being considered going forward?
Speaker #1: Yeah, we have full flexibility on our shareholder returns in terms of dividends or buybacks, subject to the conditions of the company and liquidity.
Speaker #1: When we look to return value back to shareholders in the form of distributions, I'm subject to where our share price is sitting. We're kind of dictated by the form of shareholder returns.
Speaker #1: So, no, we have never had a dividend in IPC, and we are in the midst of a lot of growth. And so, we really firmly believe the share price appreciation is still to shine through—much higher than current levels.
Speaker #1: So, at this very point in time, I think it’s less likely that a dividend would be implemented in the short term.
Speaker #5: Okay, thanks, Will. And then just a quick question—if you can, could you elaborate on any capex plans for 2027?
Speaker #1: Yeah, 2027 budget details will be put together and released to the market at a Capital Markets Day in 2027. We have our year-end '25 reserves plan, which is based on the year-end reserve auditor price deck.
Speaker #1: Which has a capex profile, which we have disclosed externally as well, for the next five years. So, subject to commodity prices and the opportunity set of maturation, we may look to add on incremental value-adding activities based on that current assumption. But that assumption is something that will be reviewed in detail at the end of this year and consulted with the board before we release our final 2027 budget, which will come at Capital Markets Day.
Speaker #5: Okay, thanks, Will. And then the final question here really is to do with strategic focus going forward. Will that include some M&A?
Speaker #1: Yeah, we've always had M&A in our DNA, and we remain opportunistic about growing inorganically, provided a tangible and robust opportunity presents itself. And we are very much anchored in maximizing shareholder value.
Speaker #1: We have a tremendous portfolio of organic growth potential within it. As well, we always want to benchmark against buying back our own stock compared to doing M&A.
Speaker #1: So within the boundaries of that, if the right opportunity presents itself for the right price, we're open to opportunistically growing through M&A, but it's grounded within those boundaries, as I had touched on.
Speaker #5: Okay, thanks very much, Will. Christophe, those are the questions we have today, so we'll close the conference. Will.
Speaker #2: Thank you.
