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 provide the following update.
i3 notes the announcement by Europa Oil & Gas Limited (“Europa”) (company number 03093716) regarding its agreement in principle to farm-in to the Company’s Serenity oil discovery in the UK North Sea and the equity funding it is conducting to fund its farm-in obligations.
We can confirm that the farm-in, joint operating agreement and trust deed have been essentially agreed between the parties to enable Europa to acquire a 25% non-operated working interest (“WI”) in a sub-area of UKCS Licence P.2358 Block 13/23c (containing the Serenity discovery) by funding a 46.25% paying interest for one appraisal well on the field, whereafter i3 will retain a 75% operated WI in the Block.
The well cost is estimated to be circa £14 million and Europa’s 46.25% paying interest will be applied up to a capped gross well cost of £15 million. Any well costs exceeding £15 million will be paid by the companies in proportion to their respective working interests. Completion of the deal and transfer of the licence interest to Europa will be subject to the following principal conditions:
1. Europa funding an escrow account with their paying interest obligation. We note that closing of Europa’s equity funding is subject to the approval of its shareholders at an EGM.
2. Approval of the UK Oil and Gas Authority (“OGA”) to the creation of the Serenity area of Block 13/23c as a new block of Licence P.2358 (the “New Serenity Block”).
3. Consent of the OGA to assignment of an interest in the Licence and New Serenity Block to Europa.
4. UK National Security and Investment Act approval.
5. Approval of i3’s Loan Note holders of the assignment of the Licence interest.
We will make a further announcement should Europa successfully complete its accelerated book-build and when transaction agreements for the farm-out are executed.
As previously announced, the Company has been in discussions with a number of potential Serenity farminees and these other discussions remain ongoing and may result in farm-out of additional working interests in the New Serenity Block.
Following this farm-out i3 will retain a 100% WI in the remainder of Block 13/23c which contains the Minos High prospect and Liberator discovery.
Majid Shafiq, CEO of i3 Energy plc, commented:
“i3 is delighted to announce this potential farm-out which on completion will facilitate the drilling of an appraisal well on the Serenity oil field later this year. This well will provide critical information which will help us to delineate the size of this potentially very large discovery and move it towards development. On completion of the farm-in we look forward to welcoming Europa as our joint venture partner and to a fruitful relationship between our two companies.”
Qualified Person’s Statement
In accordance with the AIM Note for Mining and Oil and Gas Companies, i3 discloses that Majid Shafiq is the qualified person who has reviewed the technical information contained in this document. He has a Master’s Degree in Petroleum Engineering from Heriot-Watt University and is a member of the Society of Petroleum Engineers. Majid Shafiq consents to the inclusion of the information in the form and context in which it appears.
i3 Energy plc
Majid Shafiq (CEO) / Graham Heath (CFO)
Tel: +44 (0) 203 781 8331
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