i3 Energy PLC has taken a significant step toward strengthening its financial position by selling a portion of its non-core royalty assets. The transaction, which involved assets producing 388 barrels per day of oil equivalent and generating an annual cash flow of $3.6 million, was completed for $25 million. According to Majid Shafiq, the company's chief executive, this move not only accelerates the realization of value but also trades less than 2% of last year's production for about 14% of the company's market capitalization.
The sale has had a transformative impact on i3 Energy's balance sheet, eliminating the company's net debt and creating a working capital surplus. This financial flexibility grants i3 Energy access to a fully undrawn $75 million Canadian debt facility, providing ample resources for future growth. The proceeds from the sale are earmarked for expanding the company's operations in Canada, with potential investments in high-return oil and gas wells or strategic mergers and acquisitions.
This strategic divestment aligns with i3 Energy's broader strategy of maximizing shareholder value through careful asset management and judicious acquisition and divestment decisions. Notably, the company has retained its royalty position in the Montney position at Simonette, a move that underscores its belief in the area's high potential for future gains from oil wells. For more information on i3 Energy's strategic initiatives, visit https://www.i3energy.com.
