S&P Global Ratings has revised International Petroleum Corp.’s (IPC) outlook to stable while affirming its ‘B’ rating and assigning a ‘B+’ rating to new debt.
The agency said IPC’s planned transaction will reduce refinancing risk. The company currently has $450 million in senior unsecured notes due February 2027 and an undrawn C$250 million revolving credit facility. After the transaction, IPC will have no debt maturing until 2030.
S&P expects production to rise while capital spending falls in 2026 and 2027 after the Blackrod Phase 1 project. The project is expected to be 95% complete by the end of 2025, with first oil anticipated in late 2026. Production is projected to reach about 48,000 barrels of oil equivalent per day (boe/d) in 2026, up from 44,000 boe/d in 2025, and 60,000 boe/d by 2027 when Blackrod reaches full capacity of 30,000 boe/d.
Capital expenditures are expected to drop from $320 million in 2025 to around $140 million in 2026. After two years of spending above cash flow, IPC is projected to generate positive free operating cash flow (FOCF) of about $55 million in 2026 and $125 million in 2027. S&P expects the company to use this cash for debt reduction and shareholder returns, including possible share repurchases of around $95 million in 2027.
S&P also expects IPC’s funds from operations to debt ratio to improve from roughly 23% in 2025 to 37% in 2027, while debt to EBITDA should strengthen from 3.6x to 2.2x.
The stable outlook reflects S&P’s view that IPC’s credit profile and liquidity will improve over the forecast period, supported by the Blackrod project completion and the planned refinancing of its 2027 notes.
