Joint Venture Negotiations

RNS Number : 7176S

i3 Energy PLC

27 June 2018

 

27 June 2018

i3 Energy plc

("i3" or the "Company")

Joint Venture Negotiations

i3 Energy plc, an independent oil and gas company with assets and operations in the UK, is pleased to update the market on the status of its discussions with potential joint venture partners  As announced on 23 May 2018, i3 Energy respectively holds and has been awarded a 100% working interest in UK North Sea Blocks 13/23(d) ("Liberator") and 13/23(c) ("Liberator West") containing the entire Liberator trend with associated 2P reserves plus Mid case contingent and prospective resources totalling 80 MMBO. The Company has granted a period of exclusivity to a potential farminee in order to conclude contractual negotiations which, upon success, would result in i3 being fully funded for both the Liberator field development and the appraisal of Liberator West.

i3 expects to disclose the proposed terms of a commercial arrangement in due course. During the 90-day exclusivity period, the parties expect to enter a legally binding Sales & Purchase Agreement ("SPA"). Completion of the SPA will be subject to the negotiation of certain joint venture agreements in line with industry practice as well as certain conditions precedent relating to the approval of the final Liberator Phase I FDP by the OGA.

A Joint Venture project team will be formed between i3 and the potential farminee to accelerate and submit the enlarged Phase I FDP to the OGA for approval as soon as possible following signing of the SPA. Meanwhile, the parties will continue to progress the sourcing of long lead items and other development kit and services in a timely manner to meet their commitment to an earliest possible Liberator first oil date.

Shareholders should note that there is no certainty that the proposed farm-in will successfully conclude. Further announcements will be issued in due course and as appropriate.

Reserves and Resources

According to AGR Tracs International Limited ("AGR"), i3's independent competent person, Liberator West contains a Mid case of 22 MMBO of 2C Contingent Resources, in addition to Liberator's 11 MMBO of 2P Reserves which i3 expects to increase through well optimisation. AGR's Liberator West Resources 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 Mid case Prospective Resources of 47 MMBO recoverable for this area (bringing i3's total Mid case reserves, contingent resources and prospective resources to over 80 MMBO on a gross basis). 

Neill Carson, CEO commented

"The entry by i3 into a period of exclusivity with a potential farm-in partner for the Liberator Licences is a key step on our path to securing the funding for the development and appraisal of the entire Liberator trend.  The interest from a potential farm-in partner can be attributed to the quality and scale of the Liberator opportunity and the state of project readiness. We look forward to working with the potential farminee's management to conclude our negotiations and towards the safe and efficient delivery of the Liberator development and Liberator West appraisal programmes in due course."

Graham Heath, CFO commented

"Today's announcement follows a strong start to the year for i3 during which the Company has completed a number of material achievements. Upon the successful negotiation of an SPA, this farm-in would be a highly satisfying solution to achieving first oil from Liberator and the appraisal of Liberator West."

ENDS

CONTACT DETAILS:

	i3 Energy plc
	Neill Carson (CEO) / Graham Heath (CFO)	c/o Camarco Tel: [phone]
	WH Ireland Limited (Nomad and Joint Broker)
	James Joyce, James Sinclair-Ford	Tel: [phone]
	GMP FirstEnergy (Joint Broker)
	Jonathan Wright, David van Erp	Tel: [phone]
	Canaccord Genuity Limited (Joint Broker) Henry Fitzgerald- O'Connor, James Asensio	Tel: [phone]
	Camarco Georgia Edmonds, Jane Glover, James Crothers	Tel: [phone]

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 (106) 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" "High case resource" reflects a volume estimate 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" "Mid case resource" reflects a volume estimate 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" "Low case resource" reflects a volume estimate 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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