i3 Energy PLC Drilling Contract & Interest Sale in Block 13/23c (7613G)
March 19 2020 - 2:00AM
UK Regulatory
TIDMI3E
RNS Number : 7613G
i3 Energy PLC
19 March 2020
19 March 2020
i3 Energy plc
("i3" or the "Company")
Drilling Contract and Sale of Economic Interest in Block
13/23c
i3 Energy plc, an independent oil and gas company with assets
and operations in the UK, is pleased to announce the following
update.
Drilling Contract
The Company has entered into a drilling contract with Dolphin
Drilling Limited ("Dolphin") to utilise either the Borgland Dolphin
or Blackford Dolphin semi-submersible drilling rig for a minimum
82-day programme which is due to commence not later than 1(st)
September 2020 or as otherwise agreed between the parties (the
"2020 Campaign"), and also has the ability to be extended for a
period of 78 days (the "Option Programme"). The contract is
conditional on i3 confirming availability of funds to satisfy its
obligations under the contract, 90 days prior to drilling
commencement.
i3's current minimum programme for the appraisal drilling
consists of two appraisal wells on Serenity plus a sidetrack on
each well, contingent on drilling outcomes, at a total expected
gross cost of approximately US$33 million. The Option Programme
would include wells on the Minos High structure and the Liberator
West area in Block 13/23c.
Sale of Economic Interest in Block 13/23c
In concert with the abovementioned drilling contract, i3 has
agreed that Dolphin will earn up to a 10% economic interest (the
"Dolphin Interest") in Block 13/23c via a Net Revenue Sharing
Agreement (the "NRSA") in exchange for Dolphin forgoing its Profit
Margin above its Opex, up to a maximum amount of US$14.4 million
(the "Dolphin Commitment"). Accordingly, the Dolphin Commitment
will cover approximately 22% of the total expected gross costs of
each of the 2020 Campaign and Option Programme.
The "Net Revenue" is revenue from the sale of hydrocarbons from
Block 13/23c less all costs for developing and producing those
hydrocarbons. Once production from Block 13/23c has been achieved,
and after such time as i3 has been repaid 200% of all Block 13/23c
development Capex costs from associated petroleum revenues, Dolphin
will receive a share of field income equal to Dolphin's Interest
multiplied by Net Revenue. Any Dolphin Profit Margin paid by i3
during the 2020 Campaign at its election will decrease the Dolphin
interest on a proportional basis. At any time prior to the approval
by the UK Oil and Gas Authority (the "OGA") of a field development
plan ("FDP") which includes production wells in the 13/23c Block,
i3 has the right to purchase the Dolphin Interest by paying Dolphin
125% of the Dolphin Commitment. Following the approval of a Block
13/23c FDP by the OGA to develop more than 25 MMbbls of reserves
from production wells on that block, Dolphin has the right to sell
the Dolphin Interest to i3 for the Dolphin Commitment plus interest
accrued at a rate of 8% per annum, and i3 has the obligation to
purchase the Dolphin Interest upon Dolphin exercising such
right.
i3's management carries 197 MMbbls P50 stock tank oil initially
in place (STOIIP) for Serenity which, conservatively modelled as a
stand-alone development, demonstrates an after-tax NPV10 break-even
at US$20 per barrel Brent pricing.
As announced on 13(th) February and as evidenced by the above
transaction, the Company is making good progress in its farm-out
process to fund its 2020 drilling programme. The data room remains
open and companies continue to actively evaluate the opportunity.
i3 will provide further updates to the market as discussions
progress.
Site Survey
The site survey over Serenity and the Minos High area of
Liberator West has been completed on time and budget without any
health and safety incidents. After all final survey reports are
received, i3 will commence the technical and environmental work
necessary to plan for and permit its Summer 2020 drilling
programme.
Minimising Operating Costs
In light of recent world events and their effect on oil and
capital markets, the Company has been and continues to decrease its
corporate operating costs in order to maximise its current
resources. The Company is closely monitoring and applying official
government and health guidance in regard to the COVID-19 outbreak
("COVID-19"). At this stage, i3 is not experiencing any direct
impact to its business and does not yet foresee any disruption to
its 2020 drilling programme from COVID-19.
Majid Shafiq, CEO of i3 Energy commented:
"We are delighted to have executed a drilling contract with
Dolphin Drilling for our Summer 2020 appraisal programme. Dolphin
performed exceptionally well in our 2019 campaign, drilling our
wells on time and on budget and without any significant health,
safety or environmental issues. Their support announced today not
only contributes a significant component to the funding structure
for our upcoming drilling campaign but also demonstrates the
quality of our licenses."
ENDS
CONTACT DETAILS:
i3 Energy plc
Majid Shafiq (CEO) / Graham Heath c/o Camarco
(CFO) Tel: +44 (0) 203 7 81
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
Mirabaud Securities Limited (Joint Tel: +44 (0) 203 167 7221
Broker)
Peter Krens
Camarco
Jennifer Renwick, James Crothers Tel: +44 (0) 203 7 81
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.
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
CNTKKCBQABKKBND
(END) Dow Jones Newswires
March 19, 2020 03:00 ET (07:00 GMT)
I3 Energy (LSE:I3E)
Historical Stock Chart
From Apr 2024 to May 2024
I3 Energy (LSE:I3E)
Historical Stock Chart
From May 2023 to May 2024