TIDMI3E
RNS Number : 4673Y
i3 Energy PLC
02 January 2020
2 January 2020
i3 Energy plc
("i3" or the "Company")
Corporate and Funding Update
i3 Energy plc, an independent oil and gas company with assets
and operations in the UK, is pleased to announce the following
update.
2020 planning and farm-out process underway
Following i3's 2019 drilling campaign at Serenity and Liberator,
the Company is now preparing for a mid-2020 appraisal programme to
delineate the fields which the Company believes could contain more
than 600 MMbbls P50 STOIIP.
Well and fluid data from the Serenity 13/23c-10 discovery well
encountered sweet, 31.5deg API crude in 11 feet of upper Captain
oil-bearing sands. The measured oil column on structure, observed
through pressure data, was 604 feet true vertical depth (TVD). If
the Serenity and neighbouring Tain oil field are in communication
as i3 expects, then this infers an oil column height of 1124 feet
TVD. On the basis of information recovered from the discovery well,
the Company retains its pre-drill estimate of 197 mmbbls P50 STOIIP
for Serenity. The Company expects the thickness of the upper
Captain sands package to increase, potentially substantially,
moving westward along structure, based upon a measured sand
thickness of 115 ft true vertical thickness (TVT) immediately west
of the Serenity accumulation in the 13/23a-7A well. The 13/23c-10
well has confirmed the strong commercial potential of the Serenity
area, and reservoir model simulations demonstrate potential
recovery factors above 60%.
Though Liberator wells 13/23c-9 and 13/23c-11 did not meet i3's
expectations, the latter confirmed a migration path for
hydrocarbons to move westward towards the "Minos High" where the
upper Captain sands package is estimated to have a thickness of
circa 200 ft TVT above the oil-water contact. Post-drill mapping of
the entire Liberator structure still shows potential in-place
resources above 400 MMbbls.
With the highly successful Serenity discovery and remaining
potential at Liberator, the Company has begun planning a mid-2020,
multi-well appraisal programme and is simultaneously conducting a
farm-down process of its licences to potentially fund the 2020
drilling campaign. The Company will continue working with its
senior lenders on a development facility for its assets. Future
drilling remains subject to funding and i3 will update the market
on these endeavours in due course as material progress is made.
GE UK warrants for services rendered
As part of an agreement announced 2 July 2019, i3 Energy has
issued a further 2,816,739 warrants to subscribe for Ordinary
Shares at an exercise price of 56.85 pence per Ordinary Share to GE
Oil & Gas UK Limited ("GE UK"), in addition to the 2,204,574
issued to GE UK and as announced on 29 October 2019. As previously
referenced in the Company's July announcement, these warrants
relate to deferred payments for Oilfield Service ("OFS") contracts
entered into between i3 and Baker Hughes. To 30 November 2019,
Baker Hughes had performed and invoiced i3 Energy for GBP3,000,000
worth of oilfield services. GE UK can exercise the warrants via
cash settlement or in exchange for payments due to Baker Hughes
under OFS contracts with the Company. Junior Noteholders will be
offered participation in warrants on the same terms as GE UK,
pro-rata to their ownership of i3 Energy on a fully-diluted basis,
and also pro-rata to the proportion of warrants issued to GE UK
under this arrangement. Any warrants subscribed to by Junior
Noteholders, in addition to 255,732 warrants remaining due to GE UK
for OFS rendered by Baker Hughes, will be subject to shareholder
approval at a General Meeting of the Company expected to occur
before mid-February.
In accordance with the provisions of the Disclosure Guidance and
Transparency Rules of the Financial Conduct Authority, the Company
confirms its issued ordinary share capital comprises 107,719,400
Ordinary Shares of GBP0.0001 each. All of the Ordinary Shares have
equal voting rights and none of the Ordinary Shares are held in
Treasury. The above figure may be used by shareholders as the
denominator for the calculations to determine if they are required
to notify their interests in, or change to their interest in, the
Company.
With the above issuance of warrants to GE UK, the Company now
has 9,503,798 warrants exercisable at 40p/share, notional GBP8
million warrants exercisable at 40.7p/share, notional GBP8 million
warrants exercisable at 48.1p/share, notional GBP8 million warrants
exercisable at 55.5p/share, and 5,021,313 warrants exercisable at
56.85p/share which, when fully exercised in aggregate, would
convert into 65,227,561 Ordinary Shares of GBP0.0001 each in the
Company.
Majid Shafiq, CEO of i3 Energy commented:
"The discovery of the Serenity oil field was a transformational
event in i3's history. We are very excited about the further
drilling operations we expect to conduct in 2020 and see this as
the lowest risk path to unlocking substantial shareholder value. We
believe our acreage, together with the data retrieved from our 2019
drilling campaign, will be very attractive to potential farminees
looking to add material barrels and near-term production to their
portfolios."
S
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
Canaccord Genuity Limited (Joint Tel: +44 (0) 207 523 8000
Broker)
Henry Fitzgerald- O'Connor, James
Asensio
Camarco
Jennifer Renwick, James Crothers Tel: +44 (0) 203 781 8331
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, to which
i3's independent reserves auditor attributes 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. The Greater Liberator Area,
along with the Company's Serenity Discovery located in the
northern half of Block 13/23c and for which it carries a STOIIP
of 197 MMbbls, are owned and operated on a 100% working interest
basis.
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.
Qualified Person's Statement:
In accordance with the AIM Note for Mining and Oil and Gas
Companies, i3 discloses that Mihai Butuc, i3's New Ventures
Manager, 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.
Glossary
"BCF" or "bscf" billion (10(9) ) standard cubic feet;
"Boe" barrels of oil equivalent. One barrel
of oil is approximately the energy
equivalent of 6,000 standard cubic
feet of natural gas;
"boepd" Barrels of oil equivalent per day;
"MMBO" or "MMbbls" millions (10(6) ) of barrels of oil;
"MMboe" millions (10(6) ) of barrels of oil
equivalent;
"MMcfd" or "MMscfd" millions (10(6) ) of standard cubic
feet per day;
"MMstb" millions (10(6) ) of stock tank barrels
of oil;
"Net Present Value" or the discounted value of an investment's
"NPV" cash inflows minus the discounted value
of its cash outflows;
"PRMS" The SPE/WPC/AAPG/SPEE Petroleum Resources
Management System for Reserves and
Resources Classification;
"standard cubic feet" standard cubic feet measured at 14.7
or "scf" pounds per square inch and 60 degrees
Fahrenheit;
Stock Tank Oil Initially a method of estimating how much oil
In Place or "STOIIP" in a reservoir can be economically
brought to the surface;
RESOURCES
"Contingent Resources" those quantities of petroleum estimated,
as of a given date, to be potentially
recoverable from known accumulations,
but the applied project(s) are not
yet considered mature enough for commercial
development due to one or more contingencies;
"Prospective Resources" those estimated volumes associated
with undiscovered accumulations. These
represent quantities of petroleum which
are estimated, as of a given date,
to be potentially recoverable from
oil and gas deposits identified on
the basis of indirect evidence but
which have not yet been drilled;
"P10 resource" reflects a volume estimate that, assuming
"High case resource" the accumulation is developed, there
is a 10% probability that the quantities
actually recovered will equal or exceed
the estimate. This is therefore a high
estimate of resource;
"P50 resource" reflects a volume estimate that, assuming
"Mid case resource" the accumulation is developed, there
is a 50% probability that the quantities
actually recovered will equal or exceed
the estimate. This is therefore a median
or best case estimate of resource;
"P90 resource" reflects a volume estimate that, assuming
"Low case resource" the accumulation is developed, there
is a 90% probability that the quantities
actually recovered will equal or exceed
the estimate. This is therefore a low
estimate of resource;
RESERVES
"Proved Reserves" those quantities of petroleum which,
by analysis of geological and engineering
data, can be estimated with reasonable
certainty to be commercially recoverable,
from a given date forward, from known
reservoirs and under current economic
conditions, operating methods and government
regulations. Proved reserves can be
categorised as developed or undeveloped.
If deterministic methods are used,
the term reasonable certainty is intended
to express a high degree of confidence
that the quantities will be recovered.
If probabilistic methods are used,
there should be at least a 90% probability
that the quantities actually recovered
will equal or exceed the estimate;
"Probable Reserves" those unproved reserves which analysis
of geological and engineering data
suggests are more likely than not to
be recoverable. In this context, when
probabilistic methods are used, there
should be at least a 50% probability
that the quantities actually recovered
will equal or exceed the sum of estimated
Proved plus Probable reserves;
"Possible Reserves" those additional reserves which analysis
of geological and engineering data
suggests are less likely to be recoverable
than Probable Reserves. In this context,
when probabilistic methods are used,
there should be at least a 10% probability
that the quantities actually recovered
will equal or exceed the sum of estimated
Proved plus Probable plus Possible
reserves;
"Reserves" those quantities of hydrocarbons which
are anticipated to be commercially
recovered from known accumulations;
"Justified for Development" implementation of the development project
is justified on the basis of reasonable
forecast commercial conditions at the
time of reporting, and there are reasonable
expectations that all necessary approvals/contracts
will be obtained;
"1P" the Proved Reserves;
"2P" the sum of Proved plus Probable Reserves;
"3P" the sum of Proved plus Probable plus
Possible Reserves.
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
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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