i3 Energy PLC, a UK-based energy company with operations in Canada, has secured a strategic refinancing and reported stable reserves, positioning itself for future growth initiatives.
The company has entered into a reserve-based lending (RBL) facility, secured against its Canadian reserves and assets, totaling C$75 million. This new arrangement offers a slightly better interest rate compared to the previous loan and is expected to reduce as central bank interest rates fall. According to Majid Shafiq, i3 Energy’s chief executive, the refinancing has freed up C$25 million annually, which was previously allocated to amortizing the existing loan. This amount will now be reinvested in the business.
Shafiq emphasized the importance of partnering with a Canadian bank, noting their understanding of the Canadian oil and gas sector and the capability to assess risk accurately. This relationship is also strategic for accessing development capital for organic growth and mergers and acquisitions (M&A). ‘This relationship is also strategic for accessing development capital for organic growth and mergers and acquisitions (M&A),’ Shafiq said.
In addition to the refinancing, i3 Energy’s 2023 reserves update reveals stable reserves despite production, with 93 million barrels 1P and 180 million barrels 2P. Shafiq stated that this stability, achieved with minimal capital expenditure due to low gas prices, underscores the quality of i3 Energy’s assets and its efficient management. The company maintains a low production decline rate and a diverse portfolio, enabling flexibility in response to commodity price changes.
Looking ahead, i3 Energy plans to use its enhanced liquidity for growth initiatives and will update the market on its capital programme. The relationship with a major Canadian bank is expected to provide significant flexibility and options for the company’s growth strategy.
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