TIDMI3E
RNS Number : 2211X
i3 Energy PLC
22 November 2017
22(nd) November 2017
i3 Energy plc
("i3" or the "Company")
30(th) Licence Round Application - Fully Funded
i3 Energy plc, an independent oil and gas company with assets
and operations in the UK, is pleased to announce that it has
applied for acreage, made available within the UK's 30(th) Offshore
Licensing Round, on a 100% basis.
The Company has targeted and extensively evaluated seismic and
well data on a highly attractive region of acreage that if awarded
to i3 would add to the Company's portfolio, as announced on 3
November 2017, 2C Contingent Resources of 22 MMBO (with a 63%
chance of commerciality(1) ) and Mid case Prospective Resources of
47 MMBO (with a 51% chance of commerciality(2) ), according to the
opinion of AGR TRACS International Limited, the Company's Competent
Person. Further details of the Company's portfolio and targeted
opportunity can be found in the current Corporate Presentation on
i3's website.
The Company is also pleased to confirm that a binding agreement
has been entered into with an existing loan note investor to
provide financial backing in the form of an investment and net
revenue sharing agreement (the "NRSA"). Under the terms of the
NRSA, the Company can draw US$13 million to advance its 30(th)
Round bid commitments and work programme. In consideration of those
funds being made available and utilised, the investor will become
entitled to share in certain of the after-tax revenues ("ATR")
generated from the acreage after first oil. The arrangements for
sharing the ATR are as follows.
(a) Firstly, the ATR generated will be shared on the basis that
an amount equal to 200% of the Investor's invested funds will be
paid to the Investor, and an amount equal to 200% of the Company's
pre first oil capital expenditure ("capex") will be retained by the
Company (collectively "Payback").
(b) Secondly, the ATR generated after Payback will be retained
by the Company until the total amount of ATR reaches an amount
equal to (i) all of the Company's remaining (non capex) pre first
oil costs; (ii) all of the Company's post first oil costs (non
capex) and (iii) 200% of the Company's post first oil capex.
(c) Lastly, ATR generated thereafter will be shared on the basis
that 33% will be paid to the investor and 67% will be retained by
the Company.
The availability of the funding is subject to, amongst other
things, the Company being awarded the targeted acreage, OGA
consenting to the terms of the agreement, and certain production
targets from existing assets of the Company being met. In addition,
at any time prior to initial utilisation of the investor funding,
the Company may cancel the agreement without any fee, cost or
penalty being payable.
There can be no certainty that the abovementioned application
will result in the successful award of the acreage under
application and successful awards may not be announced until Q1
2018.
Neill Carson, i3's CEO, commented
"We have made significant progress in moving forward the
Liberator Development with regard to reserves, development
readiness, and the most recently announced indicative proposal and
confirmed support for a $25 million credit facility that will, upon
completion of final due diligence and loan documentation, assist
our development funding."
In order to broaden our portfolio, the UK licensing round offers
an exciting opportunity, if successfully awarded, to add a lower
risk development growth opportunity that lies near infrastructure
and yet bears further significant upside potential into an
established prospective trend. We are also very pleased by the
endorsement of the quality of the application opportunity through
the financial backing of an additional $13 million to support our
bid by an existing investor."
Ends
1) 70% chance of finding sufficiently large volume, 90% chance
of commercial project reliant on obtaining licence
2) Geological chance of success of 56.25%, 90% chance of
commercial project reliant on obtaining licence
Qualified Person's Statement:
In accordance with the AIM Note for Mining and Oil and Gas
Companies, i3 discloses that Iain Campbell, i3's Reservoir Manager
is the qualified person who has reviewed the technical information
contained in this document. He has an MEng in Petroleum Engineering
and has been a member of the Society of Petroleum Engineers since
1985. He has over 40 years' experience in the oil and gas industry.
Iain Campbell consents to the inclusion of the information in the
form and context in which it appears.
CONTACT DETAILS:
i3 Energy plc
Neill Carson (CEO) / Graham c/o Camarco
Heath (CFO) Tel: +44 (0) 203
757 4980
WH Ireland Limited (Nomad
and Joint Broker)
James Joyce, James Sinclair-Ford Tel: +44 (0) 207
220 1666
Cantor Fitzgerald Europe
(Joint Broker)
Sarah Wharry Tel: +44 (0) 207
894 8896
GMP FirstEnergy (Joint Broker)
Jonathan Wright, David van Tel: +44 (0) 207
Erp 448 0200
Camarco
Georgia Edmonds, Jane Glover, Tel: +44 (0) 203
James Crothers 757 4980
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" 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;
"Net Present Value" the discounted value of an
or "NPV" investment's 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
or "scf" at 14.7 pounds per square
inch and 60 degrees Fahrenheit;
Stock Tank Oil Initially a method of estimating how
In Place or "STOIIP" much oil 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
"High case resource" that, assuming 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
"Mid case resource" that, assuming 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
"Low case resource" that, assuming 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.
Notes to Editors:
i3 Energy is an oil and gas development company initially
focused on the North Sea. The Company's core asset is the Liberator
oil field discovered by well 13/23d-8 located in License P.1987,
Block 13/23d in which it has a 100% operated interest.
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.
i3 Energy has a strong management team with a track record of
delivery and was founded by Neill Carson, previously founder and
CEO of Ithaca Energy, where he built an asset portfolio including
multiple developments.
The RR was prepared in accordance with standard geological and
engineering methods generally accepted by the oil and gas industry,
in particular the 2007 SPE Petroleum Resources Management
System.
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 company news service from the London Stock Exchange
END
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