TIDMI3E
RNS Number : 0163Q
i3 Energy PLC
23 February 2021
23 February 2021
i3 Energy plc
("i3", "i3 Energy", or the "Company")
Operational Update
i3 Energy plc (AIM:I3E) (TSX:ITE), an independent oil and gas
company with assets and operations in the UK and Canada, is pleased
to announce the following interim operational update. The Company
intends to provide regular quarterly updates starting with a
summary of Q1 to be released in the second half of April 2021.
HIGHLIGHTS
-- Production remains predictably stable with November 2020 to
January 2021 averaging 9,150 boe/d (41% liquids)
-- The diversified portfolio continues to perform at or above
expectations, with forecasted 2021 net operating income (revenue
minus royalties, opex, transportation and processing) of
approximately CAD $35 million (US $27.6 million) based on
mid-February strip pricing, an estimated maintenance capital budget
of approximately CAD $3 million and excluding any additional
production volumes associated with i3's recent Noel production test
(referenced below)
-- High impact horizontal Falher formation production test at
i3's Noel property, located in Northeast British Columbia, further
confirming the unrecognized potential within the Company's existing
diversified portfolio of assets
o The well is expected to be brought on production at
approximately 500 boe/d during Q2 2021
-- Intention to declare maiden dividend in Q1 2021
Majid Shafiq, CEO of i3 Energy plc, commented:
"We remain very pleased with the performance of our Canadian
assets, which are producing better than both internal and
independent third-party technical evaluator estimates and
forecasts, generated at the time of the acquisitions.
"Our Canadian and UK teams continue to pursue synergistic
opportunities to grow our platform through accretive M&A, while
the current commodity environment also has i3 progressing organic
opportunities from within, as is exemplified by the excellent
result we've just achieved at Noel."
Canadian Production
Over the three-month period ending 31(st) January 2021, i3's
field sales estimate averaged 9,150 boe/d (41% liquids). These
production volumes exceeded the forecasted rates of the competent
persons reports used for i3's 2020 AIM Re-admission documents by
over 1,000 boe/d. The Company remains confident in its high-quality
portfolio of assets, with ongoing work revealing numerous
opportunities that were previously undercapitalized or overlooked
by the prior operators. At mid-February strip pricing, i3 predicts
2021 net operating income of approximately CAD $35 million (US
$27.6 million), resulting in the Company having acquired its
Canadian portfolio for just 1.0 times 2021's expected full year
cash flow.
As part of i3's commitment to ESG leadership, the Company has
been an active participant in the Government of Alberta's Site
Rehabilitation Program ("SRP") and Saskatchewan's Accelerated Site
Closure Program ("ASCP"). Through i3's involvement in the SRP and
ASCP, the Company has received grants to date in excess of CAD $1.9
million, which is dedicated to accelerating the closure relating to
inactive wells, pipelines and facility liabilities. This will
result in a reduction to the Company's overall future
decommissioning liability. The Company is further pursuing carbon
emission reduction initiatives to meet and exceed current
regulatory requirements. These initiatives will qualify for carbon
credits which can be sold or used to offset future carbon tax
obligations.
The Noel Falher Gas Well
In December 2020, i3 completed an 80 hour flow-test on a
horizontal Falher formation well located on its Noel acreage in
Northeast British Columbia. The flow-test ran for a sustained
period at 4,200 mcf/d (700 boe/d) on a 1/4" choke. The well is
expected to be brought on production at approximately 500 boe/d
during the second quarter of 2021, following tie-in. Currently
there are no booked reserves attributed to this well, or to any
potential offsetting development locations.
Dividend Timing(1)
It is expected that the Company will declare its maiden dividend
in Q1 2021 - subject to loan note holder, judicial, and shareholder
approval - for payment in early Q2. As previously disclosed, the
Company aims to distribute up to 30% of free cash flow as a
dividend to shareholders.
Serenity Appraisal Drilling Farm-out
Discussions continue with a potential farm-in partner for the
Serenity discovery and terms are being negotiated. The recent
strength in commodity prices has reinvigorated activity within i3's
virtual data room, and additional parties previously contacted
during early 2020 have now re-engaged with the Company. The market
will be updated if and when an agreement is reached.
Footnotes:
1. The Company can only pay a dividend out of distributable
profits and the Company has retained losses. The Company is
expecting to effect a reduction of share capital to create
distributable reserves to offset the losses and create surplus
profits. A reduction of share capital will require the approval by
the shareholders and the UK Courts.
END
Enquiries:
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
Canaccord Genuity Limited (Joint
Broker)
Henry Fitzgerald- O'Connor, James Tel: +44 (0) 207 523 8000
Asensio
Tennyson Securities (Joint Broker) Tel: +44 (0) 207 186 9030
Peter Krens
Camarco
Georgia Edmonds, James Crothers, Tel: +44 (0) 203 781 8331
Violet Wilson
Notes to Editors:
i3 Energy is an oil and gas Company with a low cost,
diversified, growing production base in Canada's most prolific
hydrocarbon region, the Western Canadian Sedimentary Basin and
appraisal assets in the North Sea with significant upside.
The Company is well positioned to deliver future growth through
the optimisation of its existing 100% owned asset base and the
acquisition of long life, low decline conventional production
assets.
i3 is dedicated to responsible corporate practices and the
environment, and places high value on adhering to strong
Environmental, Social and Governance ("ESG") practices. i3 is proud
of its performance to date as a responsible steward of the
environment, people and capital management. The Company is
committed to maintaining an ESG strategy, which has broader
implications to long-term value creation, as these benefits extend
beyond regulatory requirements.
i3 Energy is listed on the AIM market of the London Stock
Exchange. For further information on i3 Energy please visit
https://i3.energy/
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
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END
UPDUOSNRARUUURR
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