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Investing.com -- S&P Global Ratings has revised International Petroleum Corp.’s (IPC) outlook to stable from not specified, while affirming its ’B’ rating and assigning a ’B+’ rating to new debt.
The rating agency believes IPC’s proposed transaction will address refinancing risk for its current capital structure, which includes $450 million in senior unsecured notes due February 2027 and an undrawn C$250 million revolving credit facility. Following the transaction, IPC will have no debt maturities until 2030.
S&P forecasts production will increase with lower capital expenditures in 2026 and 2027 after completion of the Blackrod Phase 1 project, which is expected to be 95% complete by year-end 2025. The company anticipates first oil from the project in late 2026.
Production is projected to reach approximately 48,000 barrels of oil equivalent per day (boe/d) in 2026, up about 10% from 44,000 boe/d in 2025. By 2027, production is expected to increase to about 60,000 boe/d as Blackrod reaches its full 30,000 boe/d capacity.
Capital expenditure is forecast to decrease from $320 million in 2025 to approximately $140 million in 2026. After two years of outspending cash flow, S&P expects IPC to generate positive free operating cash flow (FOCF) of about $55 million in 2026 and $125 million in 2027.
The rating agency anticipates IPC will use future positive free cash flow for both debt reduction and shareholder rewards. While share repurchases may be limited next year, they could accelerate to about $95 million in 2027 as production increases.
S&P expects the company’s funds from operations (FFO) to debt ratio to improve from about 23% in 2025 to 37% in 2027, while debt to EBITDA is projected to strengthen from 3.6x to 2.2x during the same period.
The stable outlook reflects S&P’s view that IPC’s credit measures and liquidity will improve over the forecast period, supported by the completion of the Blackrod project and the proposed refinancing of its 2027 notes.
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