i3 Energy PLC - Drilling Contract & Interest Sale in Block 13/23c
("i3" or the "Company")
Drilling Contract and Sale of Economic Interest in Block 13/23c
The Company has entered into a drilling contract with
i3's current minimum programme for the appraisal drilling consists of two appraisal wells on Serenity plus a sidetrack on each well, contingent on drilling outcomes, at a total expected gross cost of approximately
Sale of Economic Interest in Block 13/23c
In concert with the abovementioned drilling contract, i3 has agreed that Dolphin will earn up to a 10% economic interest (the "Dolphin Interest") in Block 13/23c via a Net Revenue Sharing Agreement (the "NRSA") in exchange for Dolphin forgoing its Profit Margin above its Opex, up to a maximum amount of
The "Net Revenue" is revenue from the sale of hydrocarbons from Block 13/23c less all costs for developing and producing those hydrocarbons. Once production from Block 13/23c has been achieved, and after such time as i3 has been repaid 200% of all Block 13/23c development Capex costs from associated petroleum revenues, Dolphin will receive a share of field income equal to Dolphin's Interest multiplied by Net Revenue. Any Dolphin Profit Margin paid by i3 during the 2020 Campaign at its election will decrease the Dolphin interest on a proportional basis. At any time prior to the approval by the
i3's management carries 197 MMbbls P50 stock tank oil initially in place (STOIIP) for Serenity which, conservatively modelled as a stand-alone development, demonstrates an after-tax NPV10 break-even at
As announced on 13th February and as evidenced by the above transaction, the Company is making good progress in its farm-out process to fund its 2020 drilling programme. The data room remains open and companies continue to actively evaluate the opportunity. i3 will provide further updates to the market as discussions progress.
The site survey over Serenity and the
Minimising Operating Costs
In light of recent world events and their effect on oil and capital markets, the Company has been and continues to decrease its corporate operating costs in order to maximise its current resources. The Company is closely monitoring and applying official government and health guidance in regard to the COVID-19 outbreak ("COVID-19"). At this stage, i3 is not experiencing any direct impact to its business and does not yet foresee any disruption to its 2020 drilling programme from COVID-19.
"We are delighted to have executed a drilling contract with Dolphin Drilling for our Summer 2020 appraisal programme. Dolphin performed exceptionally well in our 2019 campaign, drilling our wells on time and on budget and without any significant health, safety or environmental issues. Their support announced today not only contributes a significant component to the funding structure for our upcoming drilling campaign but also demonstrates the quality of our licenses."
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Notes to Editors:
i3 is an oil and gas development company initially focused on the
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.
The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.
Qualified Person's Statement:
In accordance with the AIM Note for Mining and Oil and Gas Companies, i3 discloses that
This information is provided by RNS, the news service of the
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