TIDMI3E
RNS Number : 6870M
i3 Energy PLC
10 January 2019
10 January 2019
i3 Energy plc
("i3" or the "Company")
i3 Energy Provides Operational and Funding Update
i3 Energy plc, an independent oil and gas company with assets
and operations in the UK, is pleased to update the market on its
operational and funding progress for the appraisal and development
of its 100% owned and operated Liberator field and Serenity
prospect.
Highlights:
-- Letter of Intent signed for summer 2019 consecutive
multi-well drilling campaign ("Rig LOI") across the Liberator field
and Serenity prospect which i3 estimates have STOIIPs of 314 and
197 million barrels ("MMbbls") respectively. Subject to funding,
the Company will drill:
o The A3 appraisal well in Block 13/23c ("Liberator West") to
commence in June 2019, expected to convert Liberator West resources
into reserves
o The first Liberator Phase I production well (called L2) in
Block 13/23d
o The S1 well into the Serenity prospect that i3 expects will
prove a material extension of the neighbouring Tain discovery
-- Upon the successful appraisal and development of Liberator
and Serenity, i3 could potentially produce more than 200 MMbbls
from its current licences
-- Offtake terms received from two parties for Liberator Phase I production
o Indicative terms received from Repsol Sinopec Resources UK
Limited ("RSRUK") for utilization of its existing facilities
o Memorandum of Understanding ("MOU") executed for provision of
standalone FPSO for mid-2020 delivery to the Liberator field
-- i3 is negotiating terms and expects near-term agreement for
US$100 to US$130 million of debt for appraisal drilling and
2019/2020 Liberator Phase I development capex
-- Strong response to joint venture farmout process with several
companies conducting due diligence and a bid date likely to be set
in February
Rig secured for 2019
The Company has entered into a Rig LOI with Dolphin Drilling
Limited ("Dolphin") for a three-well appraisal and development
drilling programme to be conducted in the summer of 2019. Per the
terms of the Rig LOI, i3 will be utilizing either the Blackford
Dolphin or Borgland Dolphin semi-submersible drilling rig to spud
its first well between 1(st) June and 1(st) July 2019. i3 will
first drill the A3 appraisal well in Block 13/23c ("Liberator
West"), then drill and suspend the first Liberator Phase I
production well in Block 13/23d (L2) and complete the campaign by
drilling the S1 well into the Serenity prospect.
i3's advancement of its integrated subsurface analysis now maps
STOIIPs of 314 MMbbls in the Liberator field and 197 MMbbls in
Serenity (using conservative assumptions on oil column thickness).
As previously announced, if successful, the A3 appraisal well is
expected to convert a portion of Liberator West's resources into
reserves, in addition to determining the placement of the second
Phase I production well (either L4 or L1), which would be brought
onstream alongside the L2 well at a potential combined rate of up
to 20,000 barrels of oil per day in mid-2020. A third Phase I well
is expected to be delivered in mid-2021 to maximise infrastructure
utilization.
The S1 well at Serenity is intended to prove what i3 believes is
a material extension of the Tain discovery, which is an unclosed
oil-bearing structure immediately adjacent to the east into which
there are 4 well penetrations. The A3 and S1 appraisal wells will
allow the Company to optimally size the standalone FPSO facility
for a potentially enlarged Phase II development which includes both
the Liberator and Serenity fields. Upon the successful appraisal
and development of Liberator and Serenity, i3 could potentially
produce more than 200 MMbbls from its current licences.
Offtake terms received from two infrastructure owners
As previously announced, it is the Company's intention to
deliver first oil from Liberator Phase I by mid-2020 and i3 has
sought offtake terms from a number of infrastructure providers that
enable it to meet this timeline.
In December 2018, i3 received indicative terms from RSRUK for
Liberator's use of their leased Bleo Holm FPSO facility via Ross
field infrastructure, and the parties are working together agreeing
the terms for Liberator Phase I construction and tie-in, and
transportation, processing and operating services agreements. These
agreements are expected to be finalized alongside the 2019 field
development plan ("FDP") approval by the UK Oil and Gas
Authority.
As an alternative to the use of the Bleo Holm, i3 has also
executed a Memorandum of Understanding for the provision of a
standalone floating, production, offloading and storage ("FPSO")
vessel for the Company's 2020 delivery of Liberator Phase I. i3's
lease of the FPSO would eliminate its reliance on access to
third-party operated infrastructure.
The Company will continue to assess both offtake solutions in
order to maximize shareholder value as it moves towards its final
investment decision at FDP approval.
Appraisal and Development Funding
The Company continues to progress its previously announced joint
venture ("JV") farmout process and has been pleased with the
response. Several companies are conducting due diligence, with
additional parties scheduled to enter the process in January, and
i3 expects to set a bid date during the course of February.
In addition to advancing its JV process, the Company is working
with senior and junior lenders in the UK and North America
negotiating facilities that would, on finalisation of agreements,
provide between US$100 and US$130 million, of which up to 25% would
be available towards i3's 2019 appraisal and development drilling,
with the balance drawable for the residual 2019/2020 Liberator
Phase I production wells, subsea installation and field tie-in.
The Company expects its three-well 2019 drilling programme to
cost c.US$41 million with additional capex to 2020 first oil of
c.US$90 million, inclusive of considerable contingency.
i3 is pleased with the strong interest it continues to receive
to fund its proposed appraisal and development programme and
expects to provide further funding updates in due course.
There can be no certainty that the above negotiations and
discussions will lead to definitive agreements.
Majid Shafiq, i3's CEO, commented:
"We are very pleased with the progress we are making to move the
Liberator field towards development and with the ongoing technical
maturation of the upside in our acreage to drill ready status. We
look forward to the completion of our FDP and funding initiatives
and the commencement of a very exciting drilling programme this
summer."
ENDS
Qualified Person's Statement:
In accordance with the AIM Note for Mining and Oil and Gas
Companies, i3 discloses that Mihai Butuc, i3's Manager, New
Ventures is the qualified person who has reviewed the technical
information contained in this document. He graduated as a Diplomat
Engineer, Geology and Geophysics from the University of Bucharest
in 1985 and is a member of the Society of Petroleum Engineers.
Mihai Butuc consents to the inclusion of the information in the
form and context in which it appears.
CONTACT DETAILS:
i3 Energy plc
Majid Shafiq (CEO) / Graham Heath c/o Camarco
(CFO) Tel: +44 (0) 203 781 8331
WH Ireland Limited (Nomad and Joint
Broker)
James Joyce, James Sinclair-Ford Tel: +44 (0) 207 220 1666
GMP FirstEnergy (Joint Broker)
Jonathan Wright, David van Erp Tel: +44 (0) 207 448 0200
Canaccord Genuity Limited (Joint Tel: +44 (0) 207 523 8000
Broker)
Henry Fitzgerald- O'Connor, James
Asensio
Camarco
Georgia Edmonds, Jane Glover, James Tel: +44 (0) 203 781 8331
Crothers
Notes to Editors:
i3 is an oil and gas development company initially focused on the North Sea. The Company's
core asset is the Greater Liberator Area, located in Blocks 13/23d and 13/23c, containing
11 MMBO of 2P Reserves, 22 MMBO of 2C Contingent Resources and 47 MMBO of mid-case Prospective
Resources. The Greater Liberator Area consists of the Liberator oil field discovered by well
13/23d-8 and the Liberator West extension, both of which i3 hold a 100% working interest in.
The Company's strategy is to acquire high quality, low risk producing and development assets,
to broaden its portfolio and grow its reserves and production.
The information contained within this announcement is deemed by the Company to constitute
inside information under the Market Abuse Regulation (EU) No. 596/2014.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
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contact rns@lseg.com or visit www.rns.com.
END
UPDLFFIVLFIAIIA
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