i3 Energy PLC 30th Offshore Licensing Round Award (0011P)

TIDMI3E

RNS Number : 0011P

i3 Energy PLC

23 May 2018

23 May 2018

i3 Energy plc

("i3" or the "Company")

30(th) Offshore Licensing Round Award

Material Growth in Resource Base to 80 MMBO

i3 Energy plc, an independent oil and gas company with assets and operations in the UK is pleased to announce it has been awarded its sole 30(th) Offshore Licensing Round application target, Block 13/23c 123 km(2) , on a 100% Interest basis.

Highlights

-- Block 13/23c contains a material extension of the Liberator field, referred to by i3 as Liberator West, with further prospectivity identified by the Company outside the Liberator trend

-- i3 plans to enlarge its previously submitted Field Development Plan ("FDP") area to include an optimised drill centre from which wells could extend into Liberator West, ensuring maximum hydrocarbon capture during Phase I development

-- The award delivers a significant increase in i3's combined Reserve & Resource Base, now totalling an independently verified 80 MMBO

o Liberator West adds 22 MMBO Mid-case 2C Contingent Resources and 47 MMBO Mid-case Prospective Resources to the Company's currently held 11 MMBO of 2P Reserves

-- A Liberator West appraisal well is being planned for late 2018 (into the Contingent Resource area), with i3's Competent Person, AGR TRACS International Limited ("AGR"), estimating a 70% chance of finding commercial hydrocarbon volumes

   --     The award of 13/23c adds clarity to i3's ongoing Joint Venture development funding process 

Neill Carson, CEO commented

"The award of our sole targeted application Block 13/23c ensures i3 has 100% ownership of the full, highly attractive Liberator project. This provides significant additional growth potential and increases our existing full development potential resource base significantly to 80 MMBO. We're excited that this additional potential, within our core area, is proximal to existing infrastructure whilst also being of a scale that supports stand-alone solutions. It will provide relatively low-risk, low-cost drilling opportunities to develop additional barrels in this highly productive and well-established trend."

Background

The Company had previously submitted a Liberator Phase I FDP to the UK Oil and Gas Authority ("OGA") which addresses hydrocarbons attributed to its 100% Interest in Licence P.1987 Block 13/23d ("Liberator"), with an initial oil in place volume range estimated to be 18 (Low) - 38 (Best) - 58 (High) MMBO.

After purchasing Liberator in 2016, the Company acquired and collated numerous seismic datasets to clearly map and conduct a consistent and comprehensive re-evaluation of the area post the discovery of the Liberator field. This new approach, not previously considered by former licensees, demonstrated a sizeable westward extension into adjacent Block 13/23c, and i3 consistently declared an interest in the block during its consultations with the OGA as a result of its findings. As part of its bid submission in the UK's 30(th) Offshore Licensing Round in November 2017, i3 committed to drilling a firm appraisal well in Liberator West if awarded. With its successful application, the Company now intends to appraise Liberator West as early as Q4 2018. AGR estimates the appraisal of Liberator West to have a 70% chance of encountering commercial hydrocarbon volumes.

The Liberator discovery in Block 13/23d contains 30deg API oil trapped within the Cretaceous Captain reservoir. With the addition of Block 13/23c, Liberator and Liberator West together form a single elongated structure, 10 km long and 4 km wide, which potentially contains a range of 48 (Low) - 237 (Best) - 490 (High) MMBO initially in place. With the block award, i3 now owns 100% of these potential volumes.

In advance of Liberator West appraisal, the Company intends to update and resubmit an enlarged Phase I FDP to include a repositioned drill centre that enables the depletion of reserves from the newly awarded block. This approach will support a phased development that optimizes the recovery of hydrocarbons from the entire accumulation.

Block 13/23c also contains additional prospectivity outside of the Liberator trend which i3 will evaluate and de-risk before firm plans are considered.

Reserves and Resources

According to AGR, Liberator West contains a Mid-case of 22 MMBO of 2C Contingent Resources in addition to Liberator's 11 MMBO of Reserves, which i3 expects to increase through well optimisation.

AGR's Liberator West Reserve Report (now posted to the Company's website at http://i3.energy) recognizes an area within the Liberator structure which extends beyond i3's modified Phase I development plans, and provides additional 'Best Estimate' Prospective Resources of 47 MMBO recoverable for this area (bringing i3's total reserves, contingent resources and prospective resources to 80 MMBO). For further clarity a summary map of the full Liberator trend has been posted to the Company's website which details the location and corresponding resources extending across blocks 13/23d and 13/23c, respectively designated Liberator Phases I and II. To assess the potential of the entire Liberator structure, the Company plans to drill an appraisal well into a relatively low-risk area of the Liberator West structure in late 2018, subject to funding. In the event of success, this appraisal will not only enable reserves to be developed through Liberator Phase I, but will also form the basis for a second phase of development of the Greater Liberator Area.

In accepting this award, i3 Energy has committed to drill a firm appraisal well into Liberator West and to conduct a further seismic evaluation of the entire area of the licence, within which it has identified further prospectivity.

For the avoidance of doubt, Block 13/23c (Liberator West) is the same 30(th) Round Target described in i3's Corporate Presentation posted to the Company's website on 8(th) November 2017.

Development Funding

As previously announced, the Company continues to progress numerous funding initiatives and is in advanced discussions with multiple potential Joint Venture partners regarding development funding that i3 believes would maximise shareholder value from the enlarged Liberator development which the Company expects will result from this 30(th) License award.

S 

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 
   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 
  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, containing 
   recoverable resources of 80 MMBO. The Greater Liberator Area consists of the Liberator oil 
   field discovered by well 13/23d-8 and the Liberator West extension, both of which i3 hold 
   a 100% working interest in. Liberator West will be the subject of a single well appraisal 
   campaign in Q4 2018. 
 
   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 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 information contained within this announcement is deemed by the Company to constitute 
   inside information under the Market Abuse Regulation (EU) No. 596/2014. 
 
 
   Glossary 
    "MMBO"                    millions (10(6) ) of barrels 
                               of oil 
 
    "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; 
 
    "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; 
    "Reserves"                those quantities of hydrocarbons 
                               which are anticipated to 
                               be commercially recovered 
                               from known accumulations; 
    "2P"                      the sum of Proved plus 
                               Probable Reserves; 
 

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.

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May 23, 2018 03:59 ET (07:59 GMT)