03:01 Tue 23 Jun 2020
i3 Energy PLC - Toscana, Production Acquisition, Suspension
("i3" or the "Company")
Toscana Acquisition, Production Acquisition Letter of Intent, Trading Suspension
Toscana Transaction Highlights:
· i3 has executed its Option to acquire all of the issued and outstanding common shares of Toscana Energy Income Corporation ("Toscana" or "TEIC"), a TSX-listed oil and gas company (the "Toscana Acquisition")
· TEIC had 2019 year-end 2P Reserves of 4.65 MMboe (53% oil, 47% gas) with a reserve life index of 14.7 years
· Toscana's 2019 production averaged 1,065 boepd and generated
· TEIC operates 69% of the producing wells in its portfolio at an average net working interest of 67%
· The total aggregate consideration being paid by i3 for TEIC's debt and equity totals approximately
· In March, i3 acquired the rights and interests in Toscana's
· At completion, Toscana shareholders will receive 4,399,224 i3 shares for TEIC's entire share capital, representing dilution of approximately 4% to the Company's current shareholders
· At the conclusion of the Arrangement Agreement, i3 intends that its enlarged share capital will be listed on the TSX
· The acquisition is a reverse takeover under the AIM Rules for Companies and is conditional upon the approval of i3's shareholders
Potential Asset Acquisition Highlights:
· i3 has entered into a non-binding letter of intent (the "Proposed Acquisition") to acquire a package of producing Canadian oil and gas assets (the "Proposed Assets")
· In 2019, the Proposed Assets produced at over 10,000 boepd and generated over
· Upon completion, the Proposed Assets would add over 25 MMboe PDP and over 65 MMboe 2P to i3's portfolio
· Cash flow from the Proposed Assets would benefit from TEIC's
· The total proposed consideration to be paid for the Assets under the letter of intent is just under
· As the Proposed Acquisition would also be a reverse takeover under the AIM Rules for Companies, and at i3's request, the Company's shares are being suspended from trading on AIM until i3 either publishes a "Readmission Document" detailing the Proposed Acquisition or provides confirmation that discussions have ceased
"In March of this year we announced our entry in to the
Toscana Energy Income Corporation - Exercise of Acquisition Option
As disclosed in an RNS dated
i3 has now exercised its Option and the Toscana Acquisition will be consummated via, and is conditional upon, a plan of arrangement, the terms of which have been agreed between i3 and Toscana in the "Arrangement Agreement". Under the terms of the Arrangement Agreement, TEIC shareholders will receive 4,399,224 i3 ordinary shares, representing dilution of approximately 4% to i3's current shareholders. Voting support agreements have been obtained from the directors and management of Toscana. Completion of the plan of arrangement will be conditional on a vote in favour of the arrangement resolution by 66 2/3% of TEIC's shareholders voting at a general meeting. On conclusion of the Arrangement Agreement, i3 intends that its enlarged share capital will also be listed on the TSX.
The acquisition is also a reverse takeover under the AIM Rules for Companies and is conditional upon the approval of i3's shareholders and the Company will be preparing a Readmission Document for the admission of the enlarged company to AIM following the Toscana Acquisition.
On completion of the transaction and subject to regulatory due diligence, a current member of the TEIC board,
About Toscana Energy Income Corporation
Toscana Energy Income Corporation is a
Toscana's 2019 Consolidated Statements of Net Loss and Comprehensive Loss
|
Year ended 2019 |
|
Year ended |
|
CAD $ |
|
CAD $ |
Revenues and other income |
|
|
|
Petroleum and natural gas revenue, net of royalty expense |
15,185,235 |
|
13,924,145 |
Royalty revenue |
- |
|
1,223,168 |
Processing income |
510,876 |
|
627,197 |
Other Income |
- |
|
337,286 |
Gain (loss) on risk management contracts |
67,346 |
|
(317,354) |
Total revenues and other income |
15,763,457 |
|
15,794,442 |
|
|
|
|
Expenses |
|
|
|
Operating costs |
10,954,962 |
|
12,575,036 |
Depletion and depreciation |
6,234,595 |
|
6,823,526 |
Impairment |
11,130,000 |
|
3,800,000 |
General and administrative |
2,582,548 |
|
3,370,443 |
Share-based payments |
94,500 |
|
84,700 |
Financing expense |
3,290,835 |
|
3,825,827 |
Loss (gain) on disposal of assets and other |
(953,804) |
|
4,042,728 |
Gain on settlement with a creditor |
(176,190) |
|
- |
Gain on debentures redemption, conversion and amendments |
(13,257,760) |
|
(1,396,000) |
Gain on acquisition of Cortona, net of transaction costs |
- |
|
(381,785) |
Total expenses |
19,899,686 |
|
32,744,475 |
|
|
|
|
Net loss and comprehensive loss |
(4,136,229) |
|
(16,950,033) |
|
|
|
|
Loss per share |
|
|
|
Basic and diluted |
(0.04) |
|
(2.39) |
|
|
|
|
|
|
|
|
The Proposed Acquisition
The Toscana transaction has provided the Company with the intended benefit of seeking additional North American acquisitions by way of having an interest in a Canadian operator. i3 has entered a non-binding letter of intent for the Proposed Assets, a package of light oil and gas assets in
In 2019, the Proposed Assets produced over 10,000 boepd and have independently audited year-end 2019 reserves above 25 MMboe PDP and 65 MMboe 2P and year-end 2019 before-tax NPV10s above
The Company intends to move to a legally binding acquisition agreement for the Proposed Assets and include the required details of the Proposed Acquisition in the Readmission Document. As the Proposed Acquisition would be classified as a reverse takeover in accordance with the AIM Rules for Companies, at the request of the Company its shares will be suspended from trading on AIM as of today and will remain so until either the publication of a readmission document setting out, inter alia, details of the Proposed Acquisition or until confirmation is given that these discussions have ceased.
ENDS
Qualified Person's Statement
In accordance with the AIM Note for Mining and Oil and Gas Companies, i3 discloses that
CONTACT DETAILS:
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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 of oil and gas terms, in accordance with standards contained in the Canadian Oil and Gas Evaluation (COGE) Handbook:
Proved Reserves |
Proved reserves are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.
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Probable Reserves
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Probable reserves are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.
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Proved Developed Producing (PDP) Reserves |
Those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing or, if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.
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2P Reserves |
Total Proved Reserves plus Total Probable Reserves
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STOIIP |
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