TIDMI3E
RNS Number : 7599Y
i3 Energy PLC
17 May 2021
17 May 2021
i3 Energy plc
("i3", "i3 Energy", or the "Company")
Contract Restructuring with Baker Hughes, Creditor Consent to
Proceed with Dividend
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.
In September 2017, i3 entered a GBP5.8 million contract with GE
Oil & Gas UK Limited for subsea trees and wellheads (the
"Equipment Contract") intended for the Company's eventual
development of its Liberator field. In July 2019, i3 announced it
had awarded Baker Hughes, a GE company (GE Oil & Gas UK Limited
and Baker Hughes collectively referred to hereafter as "BHGE"),
contracts for its H2 2019 drilling programme at its Liberator and
Serenity assets. In connection with the July 2019 award, BHGE
agreed that GBP3 million of oilfield service ("OFS") and oilfield
equipment ("OFE") contract payments would not become payable until
such time as i3 had received its first sales revenues from
Liberator (the Deferred Payment Invoice Balance or "DPIB"). As part
of this transaction, the Company issued to BHGE warrants up to a
notional value of GBP3 million at an exercise price of 56.85p per
ordinary share, totalling up to 5,277,045 warrants (the
"Warrants"). BHGE could exercise the warrants via cash settlement
or in exchange for payments due under OFS or OFE contracts with the
Company. The warrants had a two-year term and would expire on
17(th) September 2021. The DPIB agreement and Warrants contained
certain conditions, one of which prevented the Company from taking
steps to reduce its share capital in order to make dividend
distributions to its shareholders while the Warrants remained
outstanding, and another that required repayment of the DPIB upon
consideration at or above GBP3 million being received as part of a
farm-down of i3's UK assets.
With i3's shift in focus to its Canadian assets and in the UK
its Serenity asset, and with its desire to pay dividends to
shareholders and to enter one or more farm-down agreements in the
near-term, the Company and BHGE have agreed the following to
mutually benefit both parties.
1. The remaining balance of the Equipment Contract will be
cancelled without penalty. i3 and BHGE re-confirm their commitment
to work together as the Company progresses its Serenity appraisal
and, with success, field development thereafter.
2. BHGE has granted permission to i3 to restructure its balance
sheet as required to make its intended dividend payments.
3. The Warrants will be converted to ordinary i3 shares (the
"Warrant Shares") at an exercise price of GBP0.0001/share for a
total consideration to i3 of GBP527.71 (the "Exercise Price").
4. For any dividend payments associated with i3's 2021 cash
flow, the Company will pay 10% of the value of such dividend
payments to BHGE to a maximum of GBP229,000 (the "Dividend
Fee").
5. Prior to 30 September 2021, i3 will pay to BHGE a fee of GBP145,383 (the "Further Fee").
6. At such time as the Deferred Payment Invoice Balance is
required to be settled in full by i3 (the "Payment Date", expected
to be concurrent with consideration being received from potential
partner(s) for the Company's Serenity farm-down), the DPIB will be
reduced by:
o the Exercise Price received from BHGE;
o the Dividend Fee paid to BHGE;
o the Further Fee paid to BHGE;
o an amount equal to all i3 Energy dividend payments received by
BHGE associated with its 5,277,045 Warrant Shares;
o an amount equal to the higher of: (i) the gross sales proceeds
derived from the disposal of any Warrant Shares by BHGE prior to
the Payment Date, and (ii) the 5-day volume weighted average value
of one i3 share during the 5-day dealing period to 17(th) September
2021 multiplied by the number of Warrant Shares disposed of by BHGE
prior to the Payment Date; and
o an amount equal to the aggregate value of any Warrant Shares
held by BHGE on the Payment Date, with the value of one i3 share
for these purposes being equal to the higher of: (i) the closing
price of i3 shares on the Payment Date, and (ii) the 5-day volume
weighted average value of one i3 share during the 5-day dealing
period to 17(th) September 2021.
i3 is additionally pleased to announce that all other consents
have been received from its relevant creditors, including its
Majority Noteholders, to proceed with its intended reduction in
share capital that it may pay its maiden dividend. The Company will
be imminently disseminating a Notice of Extraordinary General
Meeting to its shareholders to approve said reduction and to
proceed with a submission to the UK Courts to effect the same.
An application for admission of the Warrant Shares to trading on
AIM will be made and admission is expected on 21 May 2021. Upon
Admission, the Company will have in issue 727,724,766 ordinary
shares of GBP0.0001 each. Shareholders may use this figure of
ordinary shares as the denominator by which they are required to
notify their interest in, or change to their interest in, the
Company under the Disclosure Guidance and Transparency Rules.
Graham Heath, CFO of i3 Energy plc, commented:
"We are pleased to have reached this important milestone which
enables us to proceed with our promised dividend strategy, and we
want to reiterate our appreciation for the supportive and creative
relationships we continue to foster with our partners and creditors
as we evolve the Company."
END
Enquiries:
i3 Energy plc
Majid Shafiq (CEO) / Graham Heath c/o Camarco
(CFO) Tel: +44 (0) 203 781 8331
WH Ireland Limited (Nomad and Joint
Broker)
James Joyce, James Sinclair-Ford Tel: +44 (0) 207 220 1666
Canaccord Genuity Limited (Joint
Broker)
Henry Fitzgerald- O'Connor, James Tel: +44 (0) 207 523 8000
Asensio
Tennyson Securities (Joint Broker) Tel: +44 (0) 207 186 9030
Peter Krens
Camarco
Owen Roberts, James Crothers, Violet Tel: +44 (0) 203 781 8331
Wilson
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 100% owned 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 to long-term value creation, as these benefits extend
beyond regulatory requirements.
i3 Energy is listed on the AIM market of the London Stock
Exchange. For further information on i3 Energy please visit
https://i3.energy/
The information contained within this announcement is deemed by
the Company to constitute inside information under the Market Abuse
Regulation (EU) No. 596/2014.
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END
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