i3 Energy PLC, a UK-based energy company with significant operations in Canada, has successfully secured a strategic refinancing arrangement and reported stable reserves, setting the stage for its future growth initiatives. The company has entered into a reserve-based lending (RBL) facility amounting to C$75 million, secured against its Canadian reserves and assets. This new financial arrangement not only offers a marginally better interest rate than the previous loan but is also anticipated to become more favorable as central bank interest rates decline.
Majid Shafiq, the chief executive of i3 Energy, highlighted that the refinancing has liberated C$25 million annually, funds that were previously earmarked for amortizing the existing loan. This financial flexibility allows i3 Energy to reinvest the freed-up capital back into the business, fostering growth and operational efficiency. Shafiq underscored the strategic advantage of partnering with a Canadian bank, which brings a deep understanding of the Canadian oil and gas sector and a nuanced approach to risk assessment. This partnership is pivotal for i3 Energy, not only for securing development capital for organic growth but also for facilitating mergers and acquisitions (M&A) activities.
The 2023 reserves update from i3 Energy further solidifies the company's strong position, revealing stable reserves of 93 million barrels 1P and 180 million barrels 2P, despite ongoing production. Shafiq pointed out that this stability, achieved with minimal capital expenditure amidst low gas prices, is a testament to the quality of i3 Energy's assets and its efficient management practices. The company boasts a low production decline rate and a diversified portfolio, which provides the agility needed to navigate the volatile commodity price landscape effectively.
Looking forward, i3 Energy is poised to leverage its enhanced liquidity to pursue growth initiatives, with plans to keep the market informed about its capital program. The strategic relationship with a major Canadian bank is expected to afford i3 Energy considerable flexibility and a range of options to support its growth strategy, ensuring the company remains well-positioned to capitalize on future opportunities in the energy sector.
