25 March
2024
i3 Energy plc
("i3", "i3 Energy",
or the "Company")
Establishment of a CAD 75 Million
Reserve-Based Credit Facility and Settlement of Existing Loan
Facility
i3 Energy plc (AIM:I3E) (TSX:ITE), an
independent oil and gas company with assets and operations in
the UK and Canada, is pleased to announce the
successful establishment of a reserve-based lending facility (the
"Credit Facility"). The new
Credit Facility marks a significant step in transitioning i3's
capital structure, enhancing the Company's financial flexibility
through improved liquidity and enabling acceleration of its growth
and income-based business plan.
Highlights:
·
New Credit
Facility: A new CAD 75 million reserve-based
senior secured credit facility with a Canadian chartered bank,
comprised of a CAD 55 million revolving facility and a CAD 20
million operating loan facility.
·
Settlement of Existing Loan
Facility: Repayment of approximately CAD 57
million, representing the outstanding balance of i3 Energy's
existing CAD 75 million loan facility (the "Loan") with Trafigura Canada Ltd., a
subsidiary of Trafigura Pte Ltd ("Trafigura").
·
Removal of Amortisation
Schedule: The new Credit Facility, unlike the
Loan, is non-amortising and releases CAD 25 million per annum,
which the Company will deploy in its production growth
initiatives.
·
Pro Forma
Positioning: An estimated year-end 2023 net
debt of approximately USD 23 million (CAD 30.5 million)
(unaudited), together with forecast cash flow, positions the
Company with significant liquidity to contribute to its growth and
income strategies.
Majid Shafiq,
CEO of i3 Energy plc, commented:
"We are very pleased to have re-financed our existing Loan
with a traditional reserve-based lending facility provided by a
major Canadian chartered bank with a long history of financing the
country's oil and gas industry. The non-amortising structure of the
facility has an immediate benefit in increasing liquidity, which we
can deploy in high return growth initiatives. This is a very
positive validation of the strength of our underlying portfolio,
and we look forward to building our new financial relationship in a
mutually beneficial manner as we expand and grow our Canadian
operations.
We
maintain an extremely positive working relationship with Trafigura,
and the expansion of our commercial dealings with a range of
sophisticated debt capital market investors attests to the quality
of our portfolio, staff, and the success of our development
operations in Canada over the last several
years."
The establishment of a CAD 75 million senior
secured revolving credit facility with a Canadian chartered bank
was utilized to settle the Company's existing CAD 75 million Loan
facility with Trafigura, without prepayment penalty, of which
approximately CAD 57 million was outstanding at the time of the
repayment. Secured against substantially all the assets and shares
of i3 Energy Canada Ltd., the new Credit Facility, comprised of a
CAD 55 million revolving facility and a CAD 20 million operating
loan facility, has been established for i3 Energy's wholly owned
subsidiary, i3 Energy Canada Ltd. The two-year term of the new
Credit Facility is expected to be extended on an annual basis,
subject to lender approval.
The Company has initially drawn down
approximately CAD 27 million on the new Credit Facility,
which was used, along with cash on hand, to repay the Trafigura
Loan. The interest rate on the outstanding portion of the revolving
facility depends on certain ratios and at inception will be
Canadian Prime Rate plus 2.00%, with the option to change to
Canadian Overnight Repo Rate plus 3.00% should it be more
favourable to do so. The balance of undrawn credit will be
available for general corporate purposes, including working capital
requirements, acceleration of organic growth from i3's proven
portfolio of development drilling locations, and to fund accretive
acquisition opportunities.
The refinanced capital structure provides
greater financial flexibility by unlocking the Company's
significant working capital surplus and enhances its free cash flow
profile through the elimination of the previously managed
three-year, CAD 25 million per annum, straight-line amortization
schedule. With this refinancing, the Company now has the ability to
accelerate development of its extensive inventory of development
locations to enhance shareholder value.
Following the establishment of the new Credit
Facility, the Company plans to release its 2024 capital budget in
mid-April. The Company will remain disciplined with its
conservative approach to debt management, as it looks to balance
stable, predictable, growth, along with its ongoing dividend
program.
Norton Rose Fulbright Canada acted as legal
counsel to i3 in relation to the refinancing.
Year-End 2023 and 2024 Quarterly
Financial Reporting
As the Company's Canadian shareholding has now
increased beyond 10%, i3 is no longer a designated foreign issuer
and therefore is no longer eligible for TSX continuous disclosure
exemptions previously granted through National Instrument 71-102.
As such, the Company will commence issuing TSX required quarterly
financial reports for Q1 2024, including a Management Discussion
and Analysis (MD&A). Additionally, as i3 transitions to this
reporting schedule, an Annual Information Form (AIF) will be
included as part of the Company's 2023 year-end financial
statements which will be issued in mid-April
END
Enquiries:
i3
Energy plc
Majid Shafiq (CEO)
|
c/o Camarco
Tel: +44 (0) 203 757 4980
|
|
|
WH
Ireland Limited (Nomad and Joint Broker)
James Joyce, Darshan Patel, Isaac Hooper
|
Tel: +44 (0) 207 220 1666
|
|
|
Tennyson Securities (Joint Broker)
Peter Krens
|
Tel: +44 (0) 207 186 9030
|
|
|
Stifel Nicolaus Europe Limited (Joint
Broker)
Ashton Clanfield, Callum
Stewart
|
Tel: +44 (0) 20 7710 7600
|
|
|
Camarco
Andrew Turner, Violet Wilson, Sam
Morris
|
Tel: +44 (0) 203 757 4980
|
Notes to Editors:
i3 Energy is an oil and gas Company
with a low cost, diversified, growing production base in
Canada's most prolific
hydrocarbon region, the Western Canadian Sedimentary Basin and
appraisal assets in the North Sea with significant
upside.
The Company is well positioned to
deliver future growth through the optimisation of its existing
asset base and the acquisition of long life, low decline
conventional production assets.
i3 is dedicated to responsible
corporate practices and the environment, and places high value on
adhering to strong Environmental, Social and Governance
("ESG") practices. i3 is proud of its performance
to date as a responsible steward of the environment,
people, and capital
management. The Company is committed to maintaining an ESG strategy, which
has broader implications to long-term value creation, as these
benefits extend beyond regulatory requirements.
i3 Energy is listed on the AIM
market of the London Stock Exchange under the symbol I3E and on the
Toronto Stock Exchange under the symbol ITE. For further
information on i3 Energy please
visit https://i3.energy
This announcement contains inside information for the purposes
of Article 7 of the UK version of Regulation (EU) No 596/2014 which
is part of UK law by virtue of the European Union (Withdrawal) Act
2018, as amended ("MAR"). Upon the publication of this announcement
via a Regulatory Information Service, this inside information is
now considered to be in the public domain.