i3 Energy Canada Ltd. Announces Year-End 2023 Reserves

Source: www.gulfoilandgas.com 3/25/2024, Location: North America

i3 Energy plc, an independent oil and gas company with assets and operations in the UK and Canada, is pleased to announce the results of its 2023 year-end reserve report, for its subsidiary i3 Energy Canada Ltd.

i3's independent reserve report (the "GLJ report") was prepared by GLJ Ltd. ("GLJ") in accordance with standards contained in the Canadian Oil and Gas Handbook (COGEH) and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), with an effective date of 31 December 2023. All cash figures presented below are expressed in USD unless otherwise stated.

Highlights
Successful Execution of 2023 Capital Programme and Strong Performance of the Company's Production Base Maintained Reserve Volumes Across Key Categories Despite Limited Capital Expenditures Due to Declining Commodity Prices
· Total Company Interest Total Proved ("1P") reserves and Total Proved plus Probable ("2P") reserves were effectively maintained year-over-year at 92.9 million barrels of oil equivalent ("boe") and 179.9 million boe, respectively.
· Proved Developed Producing ("PDP"), 1P and 2P reserve volumes all experienced strong positive technical revisions, despite the dramatic reduction in forecasted natural gas and natural gas liquids pricing which impacts approximately 76% of the Company's produced commodities.

Established Reserves Highlights Strong Underlying Corporate Value
· The Before-tax Net Present Value ("NPV") of cash flows attributable to the Company's reserves, discounted at 10%, has been determined to be USD 303.1 million (CAD 400.9 million), USD 501.3 million (CAD 663.1 million), and USD 1,026.4 million (CAD 1,357.5 million) for its PDP, 1P and 2P reserves, respectively, being indicative of the Company's robust portfolio of economic development opportunities.

· Reserves values per share, after adjusting for year-end net debt of approximately USD 23 million, of £0.18 per share (CAD 0.31) (PDP), £0.31 per share (CAD 0.53) (1P) and £0.67 per share (CAD 1.10) (2P), represent significant premiums to the Company's current share price.

Long Reserve Life and Low Decline Rate Reinforce the Sustainability of the Company's Total Return Model
· PDP, 1P and 2P reserve life index of 7.1 years, 12.6 years, and 23.0 years, respectively, show increased reserve life across each of the categories.
· Following the 2023 capital programme, i3's top-tier corporate decline rate for 2024 of approximately 15%(10), allied with an extensive portfolio of diversified booked drilling locations, underpins the Company's growth and income strategy.

Strong Finding, Development and Acquisition ("FD&A") Metrics and Recycle Ratios
· Very strong economics demonstrated by low cost and high return projects.
· Efficient FD&A of $5.67/boe (PDP), $2.32/boe (1P) and $1.76/boe (2P), after including changes in FDC, translate to strong recycle ratios of 2.17x (PDP), 5.31x (1P) and 6.97x (2P).

Large Inventory of Booked Development Locations with Significant Inventory of Future Unbooked Locations
· Total gross booked locations of 391 (254.4 net) across the Company's four core areas, for a total Company inventory (booked and unbooked) of greater than 950 gross (550 net) undeveloped locations.
· Total undeveloped inventory represents greater than 50 years of development drilling based on the Company's 2023 capital programme.

Majid Shafiq, CEO of i3 Energy plc, commented:
"We are extremely pleased with the results of our 2023 year-end reserves audit which once again confirms the high-quality nature of our assets and speaks to the tenacity and diligence of our employees in Canada, both in the head office and at field level. In 2023 we limited our capital expenditures due to the low commodity price environment and despite that, we have managed to maintain our reserves volumes essentially flat. This is a testament to the quality of our base assets and also our drilling inventory. This quality is characterised by a low decline rate, the substantial scale of our operations and the diversity of the fields and reservoirs we produce from, which allows us to add reserves with good oil field management in addition to drilling operations. Our 2P reserves are valued at over USD 1.0 billion or £0.67 per share, demonstrating the value potential of this portfolio, and the scope for many years of growth from a total shareholder return perspective."

2023 Reserves Review
i3's independent reserve report (the "GLJ report") was prepared by GLJ Ltd. ("GLJ") in accordance with standards contained in the Canadian Oil and Gas Handbook (COGEH) and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), with an effective date of 31 December 2023.The reserves evaluation was based on the average forecast pricing of GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Limited ("3 Consultants Average", or "3CA") and foreign exchange rates at 1 January 2024.

Reserves included are Company Interest reserves which reflect i3's total working interest reserves before the deduction of any royalties and including any royalty interests payable to the Company. Additional reserve information as required under NI 51-101 will be included on Forms 51-101 F1-F3 which will be filed on SEDAR+ at www.sedarplus.ca . The numbers outlined in the tables below may not add due to rounding.

Performance Measures - Finding and Development ("F&D"), Finding, Development and Acquisition ("FD&A") Costs and Recycle Ratio
F&D and FD&A costs for 2023, 2022, 2021 and the three-year average are presented in the tables below. The capital costs used in the calculations are those costs related to land acquisition and retention, seismic, drilling, completions, tangible well site, tie-ins, and facilities, plus the change in estimated Future Development Costs ("FDC") as per the GLJ report. Net acquisition costs are the cash outlays in respect of acquisitions, minus the proceeds from the disposition of properties during the year. The reserves used in this calculation are working interest reserve additions, including technical revisions and changes due to economic factors. The recycle ratio is the net operating income (revenue minus royalties, opex, transportation and processing) per barrel divided by the cost per barrel (F&D or FD&A).


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