REG - i3 Energy PLC - CAD 75 Million RBL & Settlement of Existing Loan

I3 EnergyAnnouncement

25/03/2024 07:15

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RNS Number : 1212I  i3 Energy PLC  25 March 2024

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                                  c/o Camarco

 Majid Shafiq (CEO)                             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 (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.

 

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