TIDMI3E
RNS Number : 7217Q
i3 Energy PLC
23 June 2020
23 June 2020
i3 Energy plc
("i3" or the "Company")
Development Funding Long-stop Date
Amendments to Loan Notes
i3 Energy plc, an independent oil and gas company with assets
and operations in the UK, announces the following update.
On 8 November 2019, the Majority Noteholders of the Company's
secured loan notes agreed to extend the date by which the Company
must enter into a reserves based lending facility or find an
alternative means of funding to achieve first oil from the
Liberator field, to 30 April 2020. As the Company was not in a
position to enter into such a facility by 30 April, the Company and
the Majority Noteholders have come to an agreement to waive this
condition in return for certain amendments to the May 2019 Loan
Note Instrument and the associated Warrant Instruments.
Loan Note Instrument Amendments
The obligation to enter into a development facility for
Liberator by a certain date has been removed. A new Corporate
Development Long-stop Date has been set for 30 September 2020 prior
to which i3 has to achieve one of the following Corporate
Development Long-stop Conditions:
- Secure firm irrevocable commitments for a minimum of GBP15mm
of unsecured or fully subordinated financing, subject only to
closing mechanics; or
- Agree a farm-out and/or funding term sheet, subject only to
legal documentation to fund the drilling of at least one appraisal
well on Serenity during 2020 or 2021; or
- Execute an acquisition agreement for at least 2500 boepd of production net to i3.
In addition, the Company has an obligation to achieve net
corporate production at or above 5000 boepd by 30 April 2021.
Warrant Instrument Amendments
All warrants associated with the Loan Notes will have their
strike prices reset to the nominal value of i3 shares
(GBP0.0001/share).
Cancellation of Existing Director / Management Options and Issue
of New Options
The Loan Note Instrument amendments include the requirement that
the currently outstanding i3 management options will be cancelled
and replacement options will be issued to i3 staff and directors
which replicate the terms of the adjusted Loan Note warrants (the
"New Options") in relation to the exercise price , to seek
alignment between the Noteholders and management. A total of
16,157,612 New Options will be issued, of which 4,097,741 will be
reserved for Toscana Energy Income Corporation ("TEIC") staff and
an incoming director and will be conditional on the closing of the
acquisition of TEIC.
The New Options will vest as follows:
(i) A total of 4,223,528 New Options will vest immediately
(equivalent in number to previously vested i3 management
options);
(ii) 50% of the unvested New Options vest on the earlier of i3
obtaining (a) GBP15mm of unsecured or fully subordinated financing,
(b) an appraisal farm-out or funding term sheet for Serenity, or
(c) a net acquisition of 2500 boepd; and
(iii) 50% of the unvested New Options (or 100% if 50% have not
yet vested under (ii) above) vest on the earlier of (a) i3's
achievement of 5000 boepd of corporate production, or (b) 31
October 2021.
The number of New Options to be issued to directors remains
equivalent to the number of options previously held by each (except
for Linda Beal who will not be receiving New Options), as
follows:
Majid Shafiq 2,807,776
Graham Heath 1,734,282
Richard Ames 534,376
Neill Carson 534,376
The Loan Note Instrument Amendments is a related-party
transaction under Rule 13 of the AIM Rules for Companies as a
result of the Company's largest shareholder, Bybrook Capital LLP
(owning 13.87% of the Company's issued shares) being a Loan Note
holder. In addition, the amendments to the managements options is a
related-party transaction for the purposes of Rule 13 of the AIM
Rules for Companies. In relation to these transactions, Linda Beal
is considered to be independent for the purposes of AIM Rule 13.
Having consulted with WH Ireland Limited, the Company's Nominated
Advisor ("Nomad"), the independent director considers that the
terms of the related-party transactions are fair and reasonable
insofar as shareholders are concerned.
Following this announcement, the Company has in issue 5,000
deferred shares of GBP10.00 each, 107,719,400 ordinary shares of
GBP0.0001 each, 5,277,045 warrants with an exercise price of
GBP0.5685 each, 1,201,201 warrants with an exercise price of
GBP0.555 each, 1,386,001 warrants with an exercise price of
GBP0.481 each, 1,638,002 warrants with an exercise price of
GBP0.407 each, 500,000 EMI options with an exercise price of
GBP0.11 each, 55,981,044 warrants (representing 29.5% of i3's fully
diluted share capital) with an exercise price of GBP0.0001 each,
and upon issue 16,157,910 options (representing 8.8% of i3's fully
diluted share capital) with an exercise price of GBP0.0001.
Trading Update
Further to the guidance provided by AIM Regulation, the Company
has been granted an extension of up to three months for the
reporting and filing of its financial results for the year ended 31
December 2019, such that it will publish these results as soon as
possible but not later than 30 September 2020.
Due to the restrictions imposed by the UK Government in respect
of COVID-19, there has been a delay in the Company's auditors
receiving the relevant information to complete the audit process as
the Coronavirus has had an effect on staff availability and
external resources.
As referenced on 19 March 2020, the Company is conducting a
farmout process of its UK assets. These efforts remain ongoing and
engagement continues with potential farminees. i3 will provide
further updates to the market as these discussions progress.
On 30 March 2020, i3 announced that it had entered into an
Option agreement to acquire Toscana Energy Income Corporation
("TEIC"), a TSX-listed company. Today the Company confirmed that it
has executed that Option and will be acquiring all of the issued
share capital of TEIC by way of a plan of arrangement. The Company
additionally announced that it has entered into a non-binding LOI
to acquire a portfolio of producing assets in the Western Canadian
Sedimentary Basin.
At the end of May 2020 the Company had a cash balance of
GBP2,381,725. The Company continues to monitor its cash flow and
has reduced all costs where appropriate.
ENDS
CONTACT DETAILS:
i3 Energy plc
Majid Shafiq (CEO) / Graham Heath (CFO) c/o Camarco
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 Broker) Tel: +44 (0) 207 523 8000
Henry Fitzgerald- O'Connor, James Asensio
Mirabaud Securities Limited (Joint Broker) Tel: +44 (0) 203 167 7221
Peter Krens
Camarco
Georgia Edmonds, James Crothers Tel: +44 (0) 203 7 81 8331
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
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END
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