I3 Energy (I3E ) said initial production of the A-52-G horizontal gas well located on the Company's Noel acreage in Northeast British Columbia has exceeded expectations.
The oil and gas company with assets and operations in the UK and Canada brought the well on-stream on 17 June 2021 following the completion of construction and tie-in operations.
Since then, production from the well has averaged 650 barrels of oil equivalent per day (boepd) since start-up on a ¼" downhole choke, exceeding initial expectations by 30%.
I3 said reserves additions associated with this location will be booked in its 2021 year-end reserves update, and it is currently evaluating potential offsetting development locations.
Meanwhile, the company said operations at the Marten Hills 01-12-075-26W4 well targeting the Clearwater play which was spud on 15 June 2021 have “proceeded exceptionally well.”
To date, five of eight horizontal lateral sections, averaging 1661m in length, have been drilled in the Clearwater formation from this wellbore, with operations being on time and on budget.
All laterals drilled have encountered clean upper shoreface sandstone ranging from 24% to 27% porosity and all have encountered oil as evidenced by oil shows on cuttings, it added.
I3 said the well is currently being drilled, and upon finishing the eighth lateral the rig will be demobilised and relocated to spud the second well in this Marten Hills Clearwater drilling programme at 02-12-075-26W4. Production here is expected to commence during July.
Commenting on i3’s operations, Majid Shafiq, CEO of i3 Energy informed investors:
"We are very pleased with the initial production performance of the Noel well, which has exceeded expectations, will contribute to year-end reserves additions and has de-risked similar offsetting drilling locations. Operations in Marten Hills have proceeded exceptionally well and we look forward to bringing these wells onto production in late July."
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Earlier this month, i3 told investors that its maiden dividend could be paid in July should its share premium account be cancelled which is likely to be confirmed by the end of this month.
Having acquired a large production package at the bottom of the market in 2020, i3 said its assets have outperformed its expectations. As a result, it is reclassifying its previous dividend of $2m as a "special dividend" which will be paid if the court proceedings to cancel its share premium account are successful.
Overall, total revenue from the company’s Canadian assets amounted to £13m for 2020. Meanwhile, profit after tax for the final year ended 31 December 2020 came to £11.7m.
Looking ahead, i3 highlighted that negotiations continue with multiple potential farm-in partners in regard to the Serenity field appraisal drilling programme in the North Sea.
I3’s focus for 2021 will include growing the Canadian business, ensuring the farmout of its UK licences and distributing dividends to shareholders with up to 30% of free cash flow.
Shares in i3 have risen by over 70% in value since the beginning of 2021. The stock was trading 5.29% higher at 9.95p this morning following the announcement.
Reasons to I3E
i3E’s is focused on the development of discoveries located close to existing infrastructure and the exploitation of producing fields, whilst maintaining limited exploration exposure.
Majid Shafiq, CEO of I3E said i3’s entry into the WCSB is “to provide a platform to execute on a strategy for the rapid growth of a Canadian onshore production portfolio via M&A.”
Alongside its acquisition of Toscana, i3 has continued to expand its Canadian assets, with CEO, Majid Shafiq, and in particular, has viewed 2020 as “a transformational year.”
In September 2020, the company told investors that it completed its acquisition of all the petroleum and infrastructure assets of Gain Energy for CAD$80m after raising around £29m in August in order to complete its proposed acquisition of the Gain Energy assets in Canada.
i3 Energy also agreed to sell Gain's Saskatchewan portfolio to Harvard Resources Inc. for CAD$45m, c.US$33m, immediately following the completion of its acquisition of Gain.
i3 believes the diversification of its portfolio will add ‘a quality production base to provide internal free cash flow to grow the enlarged group and provide a near-term return to its shareholders.’
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