IPC Hits Key Milestone at Blackrod, Accelerating Canadian Oil Production

CALGARY, AB – January 05, 2026 – International Petroleum Corporation (IPC) has achieved a critical operational milestone at its Blackrod oil sands development, commencing steam injection on December 20, 2025. The achievement places the massive project on track to deliver first oil in the third quarter of 2026—a full quarter ahead of its original schedule—and signals a significant step forward in the company's Canadian growth strategy.

The successful start of the steam injection process, a key phase in mobilizing the region's heavy bitumen, comes as the project remains firmly on its MUSD 850 budget. The announcement provides a major operational victory for IPC, demonstrating strong project execution in a sector often challenged by cost overruns and delays.

William Lundin, IPC's President and Chief Executive Officer, commented on the progress in a corporate update. “We are extremely excited to announce that first steam at the transformational Blackrod Phase 1 development project occurred in December 2025,” he stated. “The warm-up process, through steam circulation, for the initial set of wells is ongoing and we continue to forecast first oil production from Blackrod Phase 1 in Q3 2026.”

A Blueprint for Efficiency Amid Financial Headwinds

IPC's ability to keep the Blackrod project on budget and accelerate its timeline stands out as a case study in project management. By the end of the third quarter of 2025, the company had already incurred approximately MUSD 785, or 92%, of the total capital expenditure required to bring the project to first oil. The remaining costs are expected to be covered by operational cash flow and existing credit facilities.

This operational success, however, is set against a more complex financial backdrop for the company. In its most recent earnings report for Q3 2025, IPC disclosed a net loss and revenues that fell short of market expectations, leading to a notable dip in its stock price in early November. Despite this, the stock has shown significant gains over the past year, reflecting broader investor confidence in its long-term asset base.

The on-time, on-budget execution of Blackrod is therefore crucial for reinforcing the company's value proposition. Analysts and investors will be looking for more details on the project's impact on future production and cash flow projections during IPC’s upcoming Capital Markets Day, scheduled for February 10, 2026. The accelerated timeline could bring forward significant revenue streams, potentially bolstering the company's financial position sooner than anticipated.

Blackrod’s Strategic Importance

The Blackrod asset is the cornerstone of IPC’s long-term growth ambitions. Wholly owned by the corporation, it is the largest resource in its portfolio, holding an estimated 259 million barrels of oil equivalent (MMboe) in proved and probable reserves, along with a vast 1,025 MMboe of best-estimate contingent resources.

The initial phase of development is engineered to reach a plateau production rate of 30,000 barrels of oil per day (bopd). However, the project's true potential lies in its future expansion capabilities. With regulatory approval already secured for production of up to 80,000 bopd, Blackrod represents a multi-decade asset with significant upside. This positions IPC, a member of the Lundin Group of Companies, as a key player in the future of Alberta’s energy landscape.

The project's impact extends beyond IPC’s balance sheet. The development contributes to an industry that is a primary driver of Alberta's economy. Provincial government figures show that oil sands royalties are a top source of revenue, funding public services across the region. As a new, large-scale development, Blackrod reinforces the sector's role as a major employer and economic contributor.

The Technology and Environmental Equation

At the heart of the Blackrod operation is Steam-Assisted Gravity Drainage (SAGD) technology. This advanced in-situ extraction method is essential for producing bitumen, which is too thick to flow at natural reservoir temperatures. The process involves drilling a pair of horizontal wells, with steam injected into the upper well to heat the bitumen, allowing it to drain via gravity into the lower production well. Blackrod's central processing facility includes a cogeneration plant and is designed to produce up to 90,000 barrels of steam per day.

SAGD is known for its high recovery rates and its commitment to water conservation, with modern facilities recycling over 90% of the water used for steam generation. To further minimize environmental impact, the additional water required is typically sourced from deep, non-potable aquifers.

However, like all oil sands projects, Blackrod operates under intense environmental scrutiny. The steam generation process is energy-intensive and a source of greenhouse gas (GHG) emissions. The industry has made strides in reducing its carbon footprint, with data showing a steady decline in GHG intensity for SAGD operations over the past decade. Nonetheless, managing emissions remains a top priority. Furthermore, development requires land clearing, which can affect local ecosystems and wildlife habitats, such as those of the woodland caribou. Projects are subject to stringent regulations from the Alberta Energy Regulator, which mandates comprehensive environmental impact assessments and ongoing monitoring to mitigate these effects.

Navigating the Canadian Oil Sands Landscape

IPC’s progress at Blackrod comes as Canada's oil sands industry navigates a period of strategic growth and significant challenges. The country's largest producers are forecasting modest production increases in 2026, driven by a focus on optimizing long-life, low-decline assets like those in the oil sands. Capital spending is on the rise, signaling confidence in the sector's long-term viability.

This investment is happening even as the industry grapples with several hurdles. Insufficient pipeline capacity to transport growing production to key markets, particularly the U.S. Gulf Coast, remains a primary concern. At the same time, producers face a complex and evolving regulatory environment and increasing global competition, most notably from surging U.S. oil production.

In response, the Canadian industry is increasingly focused on technological innovation to enhance efficiency and reduce its environmental footprint. Technologies like Carbon Capture, Utilization, and Storage (CCUS) are seen as critical for ensuring the sector's competitiveness in a climate-conscious world. With the third-largest oil reserves globally, the majority of which are in the oil sands, Canada remains a vital player in global energy security. Projects like Blackrod underscore a continued commitment to responsibly developing these vast resources for decades to come.