A Small Canadian Oil Producer Posts Record Cash Flow and Lifts Its Outlook

InPlay Oil, a Calgary-based producer, reported its strongest quarter yet for cash generation, raised its full-year outlook, and gave investors a first look at a 2027 program built around growth in oil output per share.

The company said adjusted funds flow — its preferred measure of cash generated from operations — reached a record $51.4 million in the third quarter, or $1.86 per basic share, up 92% from a year earlier. Operating income rose 78% to $61.7 million, on a 52% profit margin, according to the results released Thursday. Average production was 19,254 barrels of oil equivalent a day, with light oil output of 9,565 barrels a day, up 5% from the third quarter of 2025.

A deal that did the heavy lifting

Much of the improvement traces to an acquisition. InPlay closed the purchase of a private oil and gas producer on August 21 for $54.4 million, adding about 1,400 barrels of oil equivalent a day at closing — 85% of it light oil and natural gas liquids — plus 50 net drilling locations near its existing operations. The company said the deal was 28% accretive to adjusted funds flow and to free adjusted funds flow on a per-share basis.

The quarter was also the busiest of the year for drilling. InPlay drilled seven horizontal wells and began an eighth before quarter-end, and two Cardium wells brought on production in mid-September performed ahead of internal expectations, averaging 231 barrels of oil equivalent a day each over their first 30 days and now producing 344 a day each. Wet weather delayed fracture crews by two to three weeks, according to the company, but spending on the 2026 capital program still came in below budget.

Shareholders were paid $7.5 million in monthly dividends during the quarter, a 6% yield on the current share price, and the company bought back and cancelled 0.7% of its outstanding shares.

Bigger numbers for 2026 and 2027

On the strength of the quarter and higher oil prices, InPlay raised its 2026 forecast: adjusted funds flow of $178 million to $184 million, up 10% from its prior guidance, and free adjusted funds flow of $96 million to $104 million, up 19%. Average production for the year was reiterated at 18,900 to 19,400 barrels of oil equivalent a day.

The preliminary 2027 plan calls for $95 million to $105 million of capital spending and production of 20,100 to 21,000 barrels of oil equivalent a day, with oil output of 10,725 to 11,110 barrels a day. The company expects oil production per share to grow 15% from 2026, adjusted funds flow of $206 million to $218 million, and free adjusted funds flow of $101 million to $123 million, a yield of about 22% that it described as among the highest of Canadian-listed exploration and production companies.

The 2027 figures are preliminary and not yet approved by the board; a finalized budget is expected in January 2027.

Written by the BidAsk Newsroom. Based on reporting from the sources below.