[source: I3 Energy]

i3 Energy (I3E ) has established its joint venture partnership for the Serenity project in the North Sea after the oil and gas firm executed its farm-in agreement with Europa Oil & Gas.

The independent company, which holds assets and operations in both the UK and Canada, confirmed to investors today that Europa Oil & Gas has now signed the farm-in agreement following its completion of an equity fundraising to fund its share of the Serenity project.

Under the terms of this agreement, Europa will earn a 25% interest in the Serenity field in return for funding 46.25% of the costs of a planned appraisal well, which is capped at £15 million. Thereafter, i3 Energy will retain a 75% operated interest in the New Serenity Block.

Drilling of the Serenity appraisal well is expected for 3Q22, and well costs are estimated at around £14m. The tie-up is subject to regulatory approval by Britain’s North Sea Transition Authority, and there are no material conditions for Europa to satisfy to complete the farm-in.

Majid Shafiq, CEO of i3 Energy said: “i3 is delighted to announce the execution of the farm-in agreement with Europa and we will now commence the detailed planning and permitting process for the Serenity appraisal well, which we now expect to spud in late Q3 this year.”

Shares in i3 Energy have more than doubled since the year ended 31 December 2021.

 

View from Vox

The Board of i3 has reiterated its confidence in its belief that the Serenity field holds a company-making resource and it expects the next appraisal well to prove that premise.

In the meantime, the company is also continuing discussions with other potential farminees as it considers bringing in additional parties up to the point of drilling commencement.

In the full year to 31 December 2021, i3 paid total dividends of 0.36 p/share, equating to a yield of around 6.5% for shareholders based on i3’s closing share price on 1 January 2021.

As announced in December 2021, the Company is committing to pay a minimum of £11.827 million in dividends during the course of 2022 - that’s 3.5 times all dividends paid throughout 2021 and equates to 1.05 pence per share or a 10.2% yield on the date of announcement.

I3 has also forecasted year end “2022 Unencumbered Cash” of $66m which could support shareholder distributions or share buybacks, M&A, and supplemental development activity.

Follow News & Updates from i3 Energy: