i3 Energy plc, an independent oil and gas company with assets and operations in the UK, is pleased to update the market on the status of its discussions with potential joint venture partners As announced on 23 May 2018, i3 Energy respectively holds and has been awarded a 100% working interest in UK North Sea Blocks 13/23(d) (“Liberator”) and 13/23(c) (“Liberator West”) containing the entire Liberator trend with associated 2P reserves plus Mid case contingent and prospective resources totalling 80 MMBO. The Company has granted a period of exclusivity to a potential farminee in order to conclude contractual negotiations which, upon success, would result in i3 being fully funded for both the Liberator field development and the appraisal of Liberator West.
i3 expects to disclose the proposed terms of a commercial arrangement in due course. During the 90-day exclusivity period, the parties expect to enter a legally binding Sales & Purchase Agreement (“SPA”). Completion of the SPA will be subject to the negotiation of certain joint venture agreements in line with industry practice as well as certain conditions precedent relating to the approval of the final Liberator Phase I FDP by the OGA.
A Joint Venture project team will be formed between i3 and the potential farminee to accelerate and submit the enlarged Phase I FDP to the OGA for approval as soon as possible following signing of the SPA. Meanwhile, the parties will continue to progress the sourcing of long lead items and other development kit and services in a timely manner to meet their commitment to an earliest possible Liberator first oil date.
Shareholders should note that there is no certainty that the proposed farm-in will successfully conclude. Further announcements will be issued in due course and as appropriate.
Reserves and Resources
According to AGR Tracs International Limited (“AGR”), i3’s independent competent person, Liberator West contains a Mid case of 22 MMBO of 2C Contingent Resources, in addition to Liberator’s 11 MMBO of 2P Reserves which i3 expects to increase through well optimisation. AGR’s Liberator West Resources Report (now posted to the Company’s website at http://i3.energy) recognizes an area within the Liberator structure which extends beyond i3’s modified Phase I development plans, and provides additional Mid case Prospective Resources of 47 MMBO recoverable for this area (bringing i3’s total Mid case reserves, contingent resources and prospective resources to over 80 MMBO on a gross basis).
Neill Carson, CEO commented
“The entry by i3 into a period of exclusivity with a potential farm-in partner for the Liberator Licences is a key step on our path to securing the funding for the development and appraisal of the entire Liberator trend. The interest from a potential farm-in partner can be attributed to the quality and scale of the Liberator opportunity and the state of project readiness. We look forward to working with the potential farminee’s management to conclude our negotiations and towards the safe and efficient delivery of the Liberator development and Liberator West appraisal programmes in due course.”
Graham Heath, CFO commented
“Today’s announcement follows a strong start to the year for i3 during which the Company has completed a number of material achievements. Upon the successful negotiation of an SPA, this farm-in would be a highly satisfying solution to achieving first oil from Liberator and the appraisal of Liberator West.”