i3 Energy Secures C$75 Million Refinancing, Reports Stable Reserves for Growth Strategy
TL;DR
i3 Energy PLC secures C$75 million RBL facility, reducing interest costs and freeing up $25 million Canadian annually for reinvestment, providing a significant financial advantage.
The RBL facility is secured against Canadian reserves and assets, offering a slightly better interest rate, with an option to index the rate to the Canadian prime rate.
The refinancing allows i3 Energy to reinvest $25 million Canadian annually into the business, enhancing liquidity for growth initiatives and potential mergers and acquisitions, contributing to future sustainability.
i3 Energy's 2023 reserves update reveals stable reserves despite production, with 93 million barrels 1P and 180 million barrels 2P, highlighting the quality of its assets and efficient management.
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i3 Energy PLC, a UK-based energy company with operations in Canada, has secured a strategic refinancing arrangement while reporting stable reserves, positioning the company for future growth initiatives. The company entered into a reserve-based lending facility totaling C$75 million, secured against its Canadian reserves and assets. This new financial arrangement offers improved terms compared to the previous loan structure and is expected to become more favorable as central bank interest rates decline.
According to Majid Shafiq, i3 Energy's chief executive, the refinancing has created significant financial flexibility by freeing up C$25 million annually that was previously allocated to amortizing the existing loan. This substantial capital will now be reinvested directly into the business operations and growth initiatives. Shafiq emphasized the strategic importance of partnering with a Canadian banking institution, noting their specialized understanding of the Canadian oil and gas sector and enhanced capability for accurate risk assessment.
The banking relationship provides strategic advantages beyond immediate financing needs, offering access to development capital for both organic growth projects and potential mergers and acquisitions activities. This financial partnership aligns with i3 Energy's long-term strategic objectives in the Canadian energy market. The company's 2023 reserves update demonstrates remarkable stability despite ongoing production activities, with proven reserves of 93 million barrels and proven plus probable reserves totaling 180 million barrels.
Shafiq highlighted that this reserves stability was achieved with minimal capital expenditure, particularly notable given the challenging environment of low natural gas prices. This performance underscores the inherent quality of i3 Energy's asset portfolio and the efficiency of its operational management. The company maintains a low production decline rate and benefits from a diverse portfolio of assets, providing operational flexibility to respond effectively to changing commodity price environments.
Looking forward, i3 Energy plans to leverage its enhanced liquidity position to pursue strategic growth initiatives and will provide market updates regarding its capital program development. The strengthened relationship with a major Canadian financial institution is expected to provide significant strategic flexibility and expanded options for executing the company's growth strategy across its Canadian operations.
Curated from News Direct
