REG - i3 Energy PLC - Reduction of Capital

I3 EnergyAnnouncement

11/03/2024 07:00

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RNS Number : 2525G  i3 Energy PLC  11 March 2024

11 March 2024

i3 Energy plc

("i3", "i3 Energy", or the "Company")

Reduction of Capital

i3 Energy plc (AIM:I3E) (TSX:ITE), an independent oil and gas company with
assets and operations in the UK and Canada, announces that a Notice of General
Meeting (the "Circular") will be posted to Shareholders on 25 March 2024.
The Circular will contain details of a proposed normal course reduction of
capital (the "Capital Reduction"), being undertaken to ensure there are
sufficient distributable reserves to facilitate dividend payments in the long
term. This announcement, and the filing by the Company of a Notice of Meeting
and Record Date on SEDAR+, is made earlier than required by the Companies Act
2006 in the UK in order to satisfy the requirements applicable to the Company
under Canadian securities laws. This Capital Reduction process is not required
to facilitate the payment of the next quarterly dividend.

Notice of General Meeting, as determined by the Companies Act 2006 in the UK
(considered a Notice of Special Meeting for the purposes of Canadian
securities laws, as determined in accordance with National Instrument 54-101 -
Communication with Beneficial Owners of Securities of a Reporting Issuer) ("NI
54-101").

The Circular will be available on the Company's website at https://i3.energy
(https://i3.energy) on the anticipated date of posting, 25 March 2024, and
will be mailed to UK shareholders where it has been requested and to Canadian
shareholders in accordance with applicable Canadian securities laws. The
Circular will also be filed under the Company's profile on SEDAR+ at
www.sedarplus.ca.

The General Meeting ("GM") is to be held at the offices of W H Ireland Limited
at 24 Martin Lane, London, EC4R 0DR at 11 a.m. (BST) on 15 April 2024. The
General Meeting will be a "special meeting" for the purposes of NI 54-101.

Shareholders are strongly encouraged to appoint the Chair of the meeting as
their proxy for the GM. This will ensure that your vote will be counted even
if attendance at the GM is restricted, or you are unable to attend.
Shareholders should refer to the Circular for detailed instructions as to how
they may submit their proxy for the GM.

The results of the votes on the resolution proposed at the GM will be
announced as soon as practicable after the conclusion of the GM and will be
available on the Company's website.

Proposed Capital Reduction

The Board considers it highly desirable that the Company has the maximum
flexibility to continue the payment of dividends in line with its dividend
policy and otherwise to return value to Shareholders. The capacity of a UK
company to make distributions is restricted by the sufficiency of
distributable reserves. The Board considers that it is to the benefit of
shareholders that the significant value in the Company and its subsidiary
undertakings (the "Group") is reflected in the parent company balance sheet
and is represented by distributable profits to facilitate a sustainable
dividend policy.

The Company has transitioned to UK-adopted international accounting standards
("UK-IFRS") in its parent company accounts for the year ended 31 December
2023, which is the same reporting framework applied in the consolidated Group
accounts. Under the transitional provisions of UK-IFRS the Company has
restated its investment in i3 Canada to fair value as at the date of
transition, and this remeasurement has given rise to a reserve in equity,
being the Transition Reserve. The Transition Reserve is an unrealised profit
and, as such, does not form part of the Company's distributable reserves.

The adoption of UK-IFRS in the parent entity accounts has no impact on the
consolidated financial statements of the Group.

It is therefore proposed that:

        a.   the amount standing to the credit of the Transition Reserve
of £148,517,000 is capitalised by way of a bonus issue of newly created
capital reduction shares with a nominal value of £0.0001 and share premium of
£0.1234 for each share;

        b.   the newly created capital reduction shares are cancelled by
way of a Court-approved reduction of capital; and

        c.   £148,396,755, being the amount standing to the credit of
the Company's share premium account following the capital reduction bonus
issue, is cancelled.

This is expected to increase distributable reserves in the Company to
facilitate the future payment of dividends (in cash or otherwise) to
Shareholders, where justified by the profits of the Company, or to allow the
redemption or buy-back of the Company's shares (or other distributions to
Shareholders).

If the proposed Capital Reduction is approved by Shareholders at the GM, it
will be subject to the scrutiny of, and confirmation by, the High-Court of
England and Wales (the "Court") which will take due account of the protection
of creditors and, subject to that confirmation and registration by the
Registrar of Companies in England and Wales of the order of the Court, is
expected to take effect later this year.

The Board anticipates that this will result in the creation of distributable
reserves, however this is subject to: (i) there being no materially negative
change in the financial position or prospects of the Company; and (ii) any
provision that the Court requires the Company to make for the protection of
its creditors (although the Board does not expect any undertakings or similar
measures to be required). This will give the Company the maximum flexibility
to consider the payment of dividends and otherwise return value to
Shareholders, should the Board consider it appropriate.  It should however be
noted that if the Company is required to give undertakings to the Court, this
may delay the Company's ability to pay dividends and otherwise return value to
Shareholders.

There will be no change in the number of Ordinary Shares in issue (or their
nominal value) following the implementation of the Capital Reduction and no
new share certificates will be issued as a result of the Capital Reduction.
The Capital Reduction itself will not involve any distribution or repayment of
capital or share premium by the Company and will not reduce the underlying net
assets of the Company. The distributable reserves arising on the Capital
Reduction will, subject to the discharge of any undertakings required by the
Court as explained below, support the Company's ability to pay dividends.

The Directors reserve the right to abandon or discontinue any application to
the Court for confirmation of the Capital Reduction if the Directors believe
that the terms required to obtain confirmation are unsatisfactory to the
Company or if, as the result of a material unforeseen event, the Directors
consider that to continue with the Capital Reduction would be inappropriate or
inadvisable.

A detailed description of the business to be conducted at the GM will be
provided in the Circular.

Notes

1. All times shown are London times unless otherwise stated.

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                      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 high working interest 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 for
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.

Cautionary Statements Regarding Forward Looking Information

Certain statements and information contained in this announcement and other
continuous disclosure documents of the Company referenced herein, including
statements and information that contain words such as "could", "should",
"can", "anticipate", "expect", "believe", "will", "may", "continue",
"proposed" and similar expressions relating to matters that are not historical
facts, constitute "forward-looking information" within the meaning of
applicable Canadian securities legislation. These statements and information
involve known and unknown risks, uncertainties and other factors that may
cause actual results or events to differ materially from those anticipated in
such forward-looking statements and information. The Company believes the
expectations reflected in such forward-looking statements and information are
reasonable, but no assurance can be given that these expectations will prove
to be correct. Such forward-looking statements and information included in
this announcement should not be unduly relied upon. These forward-looking
statements and information speak only as of the date of this announcement.

In particular, forward-looking information and statements in this announcement
include, but are not limited to the following:

•     the expected timing of the Circular and of the results of the
Company's GM;

•     the anticipated benefits of the Capital Reduction;

•     expectations regarding proceedings before the Court in respect of
the Capital Reduction, including the timing of any required approvals; and

•     the Company's expectations regarding its ability to create and
increase distributable reserves in the Company to facilitate the future
payment of dividends (in cash or otherwise) to Shareholders, where justified
by the profits of the Company, or to allow the redemption or buy-back of the
Company's shares (or other distributions to Shareholders).

The forward-looking information and statements made in this announcement rely
on certain expected economic conditions and overall demand for the Company's
services and are based on certain assumptions. The assumptions used to
generate this forward-looking information and statements are, among other
things, that:

•     the Company will maintain its financial position and financial
resources will continue to be available to the Company;

•     demand for the Company's products and services will remain
consistent;

•     there will not be significant changes in the Company's financial
position due to pricing changes driven by market conditions, competition,
regulatory factors or other unforeseen factors; and

•     the Company will obtain requisite approvals required to realize
the perceived benefits of the Capital Reduction.

Risks and other uncertainties that could cause actual results to differ
materially from those anticipated in such forward-looking statements include,
but are not limited to: political and economic conditions; industry
competition;  price fluctuations for oil and natural gas and related products
and services; the availability of future debt and equity financing; changes in
laws or regulations, including taxation and environmental regulations which
may adversely impact the Company; extreme or unsettled weather patterns; and
fluctuations in foreign exchange or interest rates.

Readers are cautioned that the foregoing factors are not exhaustive.
Additional information on these and other factors that could affect the
Company's operations and financial results is included in reports filed on the
Company's website. The forward-looking statements and information contained in
this announcement are expressly qualified by this cautionary statement. The
Company does not undertake any obligation to publicly update or revise any
forward-looking statements or information, whether as a result of new
information, future events or otherwise, except as may be required by
applicable securities laws.

 

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