I3 Energy plc – Record Corporate Production and i3 Canada Ltd YE 2020 Reserves

EASTLEIGHi3 Energy plc (AIM: I3E) (TSX: ITE), an independent oil and gas company with assets and operations in the UK and Canadais pleased to announce that the Company has achieved a corporate production record and to provide a 2021 year-end reserve report for its i3 subsidiary Energy Canada Ltd.

i3’s independent reserves report (the “GLJ Report”) was prepared by GLJ Ltd. (“GLJ”) in accordance with the standards contained in the Canadian Oil and Gas Handbook (COGEH) and the National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”) with an effective date from December 31, 2021.

Strong points

Company production record thanks to strong operational performance.

Based on field estimates, i3 ended the first quarter of 2022 with record weekly average production of approximately 20,312 boepd comprising 61.1 million standard cubic feet of gas per day (“mmscfd”), 6 290 barrels per day (“bbl/d”) of natural gas liquids (“NGLs”), 3,522 bbl/d of oil and 316 boepd gross production of overriding royalty interest.

Current production continues to exceed expectations due to the continued outperformance of the company’s low decline production base, which was further enhanced by strong drilling results from i3’s inaugural development drill program.

Based on the forward strip price at March 31, 2022i3 now expects net operating income for the full year 2022 (“NOI” = revenue less royalties, opex, transportation and processing) of $192 millionan increase of 28% compared to what was planned in the December 2021 announcement of the investment budget. This increase reflects the upward movement in commodity prices, in addition to well results which improved i3’s pre-drill forecast.

Acquisitions in the core areas provided significant additions to reserves.

Proven plus probable reserves developed in production (“P50 PDP”) increased by 262% to 60.1 million boe, total proved reserves (“1P”) increased by 163% to 85.3 million boe and total proven and probable (“2P”) reserves increased by 185% to 154.1 million boe, compared to the previous year.

Significant increase in the company’s reserve value.

The pre-tax net present value of cash flows attributable to the Company’s reserves, discounted at 10%, was determined to be $354 million, $444 million and $775 million for its P50 PDP, 1P and 2P reserves, respectively, which indicates the Company’s solid production base and strong portfolio of economic development opportunities.

Accretive acquisitions provided significant reserve additions on a per share basis.

P50 PDP Net Present Value (“NPV”), using a 10% discount rate, increased by 231% to GBP0.24 per share, the 1P NAV increased by 195% for GBP0.30 per share and 2P NAV increased by 172% to GBP0.52 per share, compared to the previous year.

NPV calculations performed by GLJ used an average WTI 2022-2026 price of $69.18/bbl (average of three consultants) which is significantly lower than current strip prices.

The excellent organic reserve replacement ratio, long-lived assets and low decline profile demonstrate the sustainability of the company’s total return model.

Based on proved reserves, the Company’s organic reserves replacement ratio in 2021 was 220%. The P50 PDP, 1P and 2P reserve life index of 9.5 years, 11.8 years and 18.6 years, respectively, combined with our low base decline rate of approximately 12.4% and to our extensive inventory of highly economic development drill locations, underpins i3’s ability to sustainably grow production per share from our existing asset base and generate significant distributable cash flow for our shareholders .

Solid FD&A indicators and recycling rates reflecting Effective development and acquisition strategy.

Effective development and disciplined acquisitions have delivered a strong Developed and Developed Production FD&A (“PDP”) of $1.96 per boe, 1P FD&A of $4.51 per boe and 2P of $4.31 per boe, offering recycling rates of 5.8x, 2.5x and 2.6x, respectively.

Ryan HeathPresident of i3 Energy Canada Ltd., commented, “The Canadian Stock Report reflects the hard work and commitment of the entire i3 team. Strategic, accretive acquisitions and efficient, low-cost optimization in the field have built a predictable production base and a portfolio with vast opportunities for future development. i3 Canada is pleased to deliver record production in excess of 20,000 boepd, resulting from the company’s low decline profile and strong drilling performance.

Majid ShafiqCEO of i3 Energy plc, commented: “Our 2021 year-end reserves report summarizes a very successful year for i3 Energy. We significantly increased our reserve base year-over-year through a combination of accretive acquisitions and operating activities, with our 2P reserves valued at $775 million Where GBP0.52 per share at the end of the year.

“Our organic reserve replacement rate during the year was over 200%, demonstrating the quality of our assets and our operational ability to replace production from our existing asset base and with an index of 2P reserves of nearly 19 years and multiple drilling opportunities, we have a portfolio perfectly suited to generate consistent and incremental growth in dividends and value.

“We are very pleased to end the last quarter at over 20,000 boepd and look forward to updating the market with the results of our currently active drill program.”


Majid Shafiq

Tel: +44 (0) 203 781 8331

Notes to Editors

i3 Energy is an oil and gas company with a low-cost, diverse and growing production base in from Canada most prolific region in hydrocarbons, the Western Canada Sedimentary Basin and evaluation assets in the the North Sea with a significant advantage.

The Company is well positioned to generate future growth through the optimization of its 100% owned asset base and the acquisition of long-lived, low-decline conventional generating assets.

i3 is dedicated to responsible business practices and the environment, and places great importance on adherence to strong environmental, social and governance (“ESG”) practices. i3 is proud of its performance to date as a responsible environmental, people and capital steward. The Company is committed to maintaining an ESG strategy, which has broader implications for long-term value creation, as these benefits go beyond regulatory requirements.

i3 Energy is listed on the AIM market of London Stock Exchange under the symbol I3E and on the Toronto Stock Exchange under the symbol ITE.

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