i3 Energy plc, an independent oil and gas company with assets and operations in the UK, today announces its intention to issue new ordinary shares of £0.0001 each in the Company (“Ordinary Shares”) via an accelerated bookbuild (the “Bookbuild”) to raise in aggregate gross proceeds of not less than £16 million (“Placing”) at a price of 37 pence per share (“Placing Price”).
The Bookbuild will open immediately following the release of this announcement and a further announcement confirming the closing and final details of the Bookbuild is expected to be made in due course.
It is proposed that the Placing be conducted in two tranches. The first tranche of the Placing (the “First Tranche”) will be completed using the authority to allot Ordinary Shares granted to the Company’s directors at its most recent annual general meeting (the Company having existing authority to allot up to 11,005,527 Ordinary Shares). Completion of the second tranche of the Placing (the “Second Tranche”) will be conditional upon, inter alia, shareholder approval being obtained at the General Meeting. Canaccord, GMP FirstEnergy and WHI are acting as Joint Bookrunners in relation to the Placing.
In order to provide an opportunity for those Shareholders who have not been able to participate in the Placing to invest further in i3, the Company intends to conduct an open offer at the Placing Price, open to Qualifying Shareholders only, to raise up to £2 million of additional funds for the Company (the “Open Offer”). Further details of the Open Offer will be announced by the Company in due course, together with the despatch of a circular to shareholders setting out the terms of the Open Offer with instructions as to how to participate. The Company’s ability to complete the Open Offer will be dependent on the passing of the necessary resolutions at the General Meeting.
Use of Proceeds
It is intended that the aggregate net proceeds of the Placing and the anticipated £24 million junior secured loan note facility with warrants (the “Junior Facility”) outlined in its announcement on 25 February 2019 will fund i3’s planned 2019 multi-well appraisal and development drilling programme at its 100% owned and operated Liberator oil field and Serenity prospect and its near term working capital requirements. The programme is expected to commence as early as June 2019 and is targeting STOIIPs of 314 and 197 million barrels respectively. i3 plans to:
· Drill the A3 appraisal well in Block 13/23c (“Liberator West”), expected to convert Liberator West resources into reserves
· Drill the first Liberator Phase I development well (“L2 Well”) in Block 13/23d, which will be suspended for completion in 2020
· Drill the S1 well into the Serenity prospect that i3 expects will prove a material extension of the neighbouring Tain discovery
As announced on 25 February 2019, the Company has entered into a term sheet for the Junior Facility, which is subject to the relevant lenders’ investment committee approvals of final legally binding documentation which will include certain conditions precedent that the Company and the participants expect to be met during April 2019. The aggregate proceeds of the Junior Facility and the Placing are expected to be sufficient, subject to the outcome of the 2019 drilling programme, to allow i3 to draw on an anticipated c$100million senior debt facility, which the Company is currently negotiating with multiple interested banks and financial institutions. The senior debt facility will be applied to fund the remainder of i3’s currently envisaged 2019/20 capital expenditure plan. As previously announced, following the 2019 three-well development and appraisal campaign referred to above, in 2020 the Company expects to undertake further development drilling and to secure delivery of first oil from Liberator at approximately 20,000 bopd. With the successful appraisal and development of Liberator and Serenity, i3 could potentially produce more than 200 MMbbls from its current licences.
i3 continues to progress its joint venture farmout process which has attracted numerous interested parties. The Company will optimise the bid date to ensure all bona fide counterparties are allowed to complete their due diligence within an expedited time frame.
The Placing and the Bookbuild
Canaccord, GMP FirstEnergy and WHI will commence the Bookbuild with immediate effect. The Joint Bookrunners have entered into the Placing Agreement under which, subject to the conditions set out therein, the Bookrunners have agreed to use their respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price and as set out in the Placing Agreement.
The final number of new Ordinary Shares to be issued pursuant to the Placing (the “Placing Shares”) will be determined following the close of the Bookbuild, with the Placing Shares, upon issue, being fully paid and ranking pari passu in all respects with the Existing Ordinary Shares.
The timing of the closing of the Bookbuild and allocations of Placing Shares are at the discretion of the Joint Bookrunners and the Company. The details of the results of the Placing will be announced as soon as practicable after the close of the Bookbuild. Attention is drawn to the Appendix to this Announcement containing, inter alia, the terms and conditions of the Placing (representing important information for Placees only).
By choosing to participate in the Placing and by making an oral and legally binding offer to acquire Placing Shares, investors will be deemed to have read and understood this announcement in its entirety (including the Appendix) and to be making such offer on the terms and subject to the conditions in it, and to be providing the representations, warranties and acknowledgements contained in the Appendix.
Majid Shafiq, CEO of i3 Energy commented:
“Today’s placing, alongside our anticipated junior loan facility, allows us to retain a 100% interest in and operatorship of the Liberator field and Serenity prospect and ensures i3 is in a robust and competitive position to deliver substantial shareholder growth as we move into an operationally driven phase. This is a further key milestone that the management team has delivered on and ensures that the drilling of our first three wells remains on track to commence in June 2019 using the Blackford Dolphin drilling rig.
“Liberator is a highly material project with attractive production potential and strong growth optionality relative to the size of i3. We will continue to pursue joint venture discussions from a position of financial strength with a number of high calibre potential partners as we also progress a senior debt facility that will enable the Company to develop Liberator on a 100% basis until such time as we attract a JV farmout proposal that we believe to be commensurate with the potential of our asset base.
“I would like to thank shareholders for their support and look forward to a transformational 2019 and 2020.”