I3 Energy Share Discussion Threads

[euclid5] 20/12/2017 13:55

i3 Energy plc, an independent oil and gas company with assets and operations in the UK, is pleased to update the market in relation to its funding progress.



The Company continues advancing multiple initiatives to seek full funding for its Liberator development through prospective equity capital markets, joint venture partnerships and private funding sources, one of which is the proposed $25 million senior secured credit facility. The Company now expects to finalise loan documentation in early 2018 alongside pursuing other financing initiatives which i3 believes would fully fund the Liberator development to first oil.

The Company is planning for the full financing of the development to occur in Q1 2018 although there is no certainty definitive agreements will be entered into. i3 will further update the market at such point as sufficient information becomes available.

[basem1] 27/11/2017 16:01

Lol, 12 straight buys today but nothing of any significance. Nice to be blue at last though.

[hpotter] 23/11/2017 11:12

By 2024 it seems likely, to me, that there will be a number of fields being produced through the existing Blake facilities and that i3 Energy will be the operator.

[euclid5] 22/11/2017 20:30

Because the license the are bidding for is next door to the Liberator field & makes up the total rec reserves of 51mmbls - best reading the CPR for further info

Also, if the Blake field is not in production in 2024 & they haven't got sufficient reserves booked, then they will have to cease production. Again have a look at the CPR

hxxps://i3.energy/wp-content/uploads/2017/03/20170725-i3-ENERGY-AIM-ADMISSION-vF.pdf

[nametrade] 22/11/2017 16:13

Why would you put money to buying a new asset if you already couldnt fund an existing one?
Unless you have something arranged or up your sleeve?
(A large sleeve)

[showme01] 22/11/2017 15:45

Well let's see eh. Remaining 20% of i3 shares are about to be sent out. Advised today. i3 have done what they hoped to by minimising dilution. So far so good. They must of had their reasons for turning down $20m at over 55p. Time will tell.

[i like trees] 22/11/2017 12:46

Euclid. They were able to raise £20m at a price higher than the IPO placing price of 55p but it wasn't enough so they declined it. Graham Heath said in the Manchester presentation that the offer was still on the table. That was a few months ago but I am not concerned. Both he and Neill seem v confident that funding these drills will not be an issue.

[euclid5] 22/11/2017 12:31

I think the market is pricing in some placing funding news, plus they will require another £25m for the 2nd H Well on Liberator field - plus further capex for the 2nd UK license award in March 2018 - think that's about £25m + £20m to raise - hefty amount

Risk carry is will they still be in production after 2024, depends if Blake is economically viable to keep in production after 2024 Or if I3 Energy gets funding to put other closer assets into production - like to 22mmbls plus exploration upside of another 47mmbls - nearly another 70mmbls - then should be viable IMO

[i like trees] 22/11/2017 12:22

Divmad,

Possible that they may be extract more but 3 years at 10,000 bopd is about 200m dollars profit at the current price of oil over 3 years. Not bad for starters when the company market cap is 1/20th of that

[divmad] 22/11/2017 12:13

What is the chance that the Liberator reserves can be extended beyond their current level, thereby extending the effective life beyond 3 years at 10000 bopd?

[euclid5] 22/11/2017 12:04

If they win the 2nd asset in 1Q18 then will be surprised if they can't raise funds required via Reserve Debt Lending from cash flows - unless the funders are concerned about the 2024 possible ending if cash from thus development -

see pg 83 frm CPR

Hence, in GCA’s view, there remains an uncertainty as to whether
the FPSO facilities would be available after 2024, although Repsol has indicated its intent to work towards maintaining the vessel in class for as long as is economically justified. This should not be read as implying that production will necessarily cease at end 2024: even if the Bleo Holm is retired at that date, other solutions for continuing production could be considered, including a replacement FPSO of a smaller size. However, it is only in the High case that production from the initial two-well Liberator development on its own would support the cost
of an FPSO, so the economic viability of continued production for a significant period beyond 2024 would depend on continued production from Blake and/or from other potential developments in the area that may have been developed by that date.

hxxps://i3.energy/wp-content/uploads/2017/03/20170725-i3-ENERGY-AIM-ADMISSION-vF.pdf

[euclid5] 22/11/2017 11:59

Thanks for the rely I like trees - just found it on the Adm Doc also

If they produce 10k bopd that's a net £8m pm after deducting $23 boe costs - so on the positive assuming all goes to plan - 3 months earnings get their $33m / £25m cost for the 2nd H Well

[cashandcard] 22/11/2017 11:58

I like trees, Euclid5,


Yes, the licenses being bid for will go a long way to delivering longevity and value. The costs to bring Liberator to production are (relatively speaking) quite small.


Cash

[euclid5] 22/11/2017 11:56

Below taken from Admission Doc that inc's the CPR

so they will need $25m x 2 according to the Admission Doc & latest presentation

They have nearly raised the 1st $25m Credit facility but not the other $25m
That's what's holding this back they need close to $50m / £38m so raised 50% of the Liberator 1 well drilling only

From pg 9 of the presentation they are drilling 2 Horizontal Well's

Field will be developed with horizontal wells:

• LP1 will have a 4,400 ft horizontal section, drilled from the
Blake development centre (DC1)

• LP2 will be drilled from a second drill centre (DC2)


Costs - pg 86

i3 Energy has provided estimates of the capital and operating expenditure (CAPEX and OPEX) associated with the proposed development. Key items include: US$33 MM to drill each of the horizontal wells (including 24% contingency);

4 Development Plan - pg 83

i3 Energy has proposed a development plan involving the drilling of two horizontal wells, one in Liberator and one in Liberator NE

hxxps://i3.energy/wp-content/uploads/2017/03/20170725-i3-ENERGY-AIM-ADMISSION-vF.pdf

[i like trees] 22/11/2017 11:46

Euclid. Liberator will target 2 drills. First drill I think is pretty much covered and the second can be paid from cashflow from drill one if it can't be funded. Not my assumptions, what Graham Heath said.

[euclid5] 22/11/2017 11:34

according to table 2 on pg 17 they potentially have 51mmbls net to them in 2 other fields next to the main Liberator 1 field

Assume one of them is the one they are bidding for

hxxps://i3.energy/wp-content/uploads/2017/03/20170725-i3-ENERGY-AIM-ADMISSION-vF.pdf

[euclid5] 22/11/2017 11:29

Scotty,

The $13m is for the planned work commitments - they have another $33m to fund to get them to first oil for the 2nd asset - agree they have raised the $13m today

$25m credit facility to be confirmed in Dec 2017 - assume this covers all costs for Liberator 1

[i like trees] 22/11/2017 11:21

Cash. I've met both directors separately in Manchester and London presentations. Neill describes the business model as North Sea oil bottom feeders. They are well connected in the North Sea having worked there for many years previously and are looking for near term production assets that larger companies simply don't have time to extract prior to licences expiring due to either larger projects to push through or clearing up and shutting down exhausted projects.
The run rate from Liberator at 10,000 bopd is expected to last 3 years. The licence they have bid on in the 30th round is right next to the Liberator field if it is the same one they were excited about when presenting in Manchester shortly after the IPO. This is so under the radar IMO and any shortfall now in cash required is minimal assuming the £25m dollar facility goes through. The Bod put an estimate in costs required to get to first oil at $25-$30m as several million has already been spent in getting to project to where it is now. They told me at the time that debt and JV is the likely route with equity being minimal. Hope this helps.

[cashandcard] 22/11/2017 11:12

How sustainable is 10,000boepd Liberator run rate with the current reserve numbers?.

The reality is we need more assets to sustain it and its good to see they recognise this and are acting fast.



Cash

[scotty666] 22/11/2017 11:12

I read it differently Euclid, more like this;

Q4 17
Lib 1....$10M [Funded : Credit facility]
30th Bid $13M [Funded : Investor]
Admin....$2M

Q118
Lib 1....$20M [15M Funded / $5M TBC]
30th Bid $13M [Required : If Successful]

Total ...$58M

Where am I going wrong?

Assume the only reason we are not much higher in share price is due to both liquidity and also they still I think need >$5M to get liberator to first oil. Either way it is a pretty compelling investment at this level.

[i like trees] 22/11/2017 11:07

Revenue from Liberator should be $200,000 per day after extraction costs based on 10,000 bopd according to the extraction costs from the BoD in a presentation in London. Only part of this will repay debt, the balance can be used to either secure further debt facilities or pay development costs from cash flow. We get 2 great RNS highlighting that any dilution short to medium term will be minimal, the income is mind blowing yet the market values the company as we stand at a fraction of what it should be even with all the boxes not ticked.
Look at the experience of the BoD. They know what they are doing having done it previously.

[euclid5] 22/11/2017 10:46

"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"

so thats $13m x 2 = $26m / £20m due to be paid back to the funders!

I calculate this 2nd asset if awarded for 22mmbls of $656m / £504m based on Liberator I field 11.7mmbls valued at $328m

Seems from their presentation they still require another $33m / £25m to bring them to first oil for the 2nd Licence asset. - therefore $13m is just to cover the work commitment needed only

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.

[euclid5] 22/11/2017 10:02

The $33m is to cover costs for the addidtional licence they are bidding for which requires in advance $13m work commitments - total from above is $46m ($13m + $33m)

[divmad] 22/11/2017 07:02

Thanks for the clarification, scotty.