I3 Energy (AIM:I3E) has entered into a binding agreement to acquire Gain Energy (“Gain”), a private Canadian oil and gas company, through a reverse takeover for $58.8m.
The AIM-listed oil and gas company had previously announced its intention to acquire the company, leaving the company’s name undisclosed at the time, on 23 June 2020.
Gain, which operates in the Western Canadian Sedimentary Basin ("WCSB"), holds assets which produced at 11,020 boepd and generated around US$34m in field EBITDA in 2019.
This came from 365 net wells across multiple low-decline, long-life, light oil and gas fields.
I3 Energy said Gain’s assets would add 26.4 MMboe (million barrels) producing reserves and 69.4 MMboe 2P reserves to i3's portfolio, this morning’s statement outlined.
Under the agreement, i3 will acquire the assets free of all encumbrances, apart from industry standard or acceptable permitted encumbrances, for C$80 million or US$58.8 million.
Shares in I3 Energy closed at 6.1p on Friday afternoon.
The company said its shares will remain suspended on AIM until a readmission document is completed that will contain fuller details of both transactions.
I3 further outlined that it is ‘closely following the global energy transition towards carbon neutral energy sources, and intends to be a proactive participant in this critical endeavour.’
In line with this strategy, the group highlighted Gain's interest in the oil-producing Weyburn unit, the fourth largest carbon capture, utilization and storage ("CCUS") project in the world.
For Gain's interest, the amount of carbon dioxide annually sequestered is estimated to offset around 17,760 boepd of scope 1 greenhouse gas emissions, the group noted.
Currently, this figure is more than sufficient to cover the 10,645 boepd produced by the Gain Assets in Q4 2019 and will further offset production as it is added to i3's portfolio in the future.
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