i3 Energy PLC 30th Licence Round Application - Fully Funded (2211X)

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

MSCPGGGPGUPMUBP

(END) Dow Jones Newswires

November 22, 2017 04:28 ET (09:28 GMT)