I3 Energy (I3E) has entered into a contract with Petrofac Facilities Management under which Petrofac will provide well engineering, operations management, and operator services for the drilling of the Serenity appraisal well on i3’s UK North Sea Licence P.2358 Block 13/23c.
The independent oil and gas firm which has assets and operations in the UK and Canada said the contract will enable it to have access to Petrofac's expertise and services for three years.
Petrofac has an existing contract with Stena Drilling Limited for the use of the Stena Don, a harsh environment, dynamically positioned fifth generation, semi-submersible drilling unit. i3 has secured a well slot with a start date between 15 August 2022 and 15 September 2022.
Majid Shafiq, Chief Executive of i3 Energy, told investors: "We are very pleased to be working again with PFML who we contracted to drill the Serenity discovery well in 2019, where operations were completed successfully, safely, on time and on budget. Operations planning is well underway, and we are on-track to spud the Serenity appraisal well in early September."
According to Europa Oil & Gas, which farmed into the project back in April 2022, Serenity is strategically located near existing infrastructure in the North Sea, however, the companies believe the well could provide sufficient recoverable volumes for a standalone development.
Shares in I3 Energy have increased by nearly 14% in the past three months, reaching highs of 31.94p. Today, shares were trading 4.06% higher at 27.9p following the announcement.
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Results from the company’s wells drilled to date have either met or exceeded management's pre-drill geological and production capacity expectations and have been drilled within budget.
I3 Energy recently told investors it is planning to expand its drilling programme for the second half of the year as a result of the continued strong performance of its base production assets.
The Company reported average production of approximately 18,095 barrels of oil equivalent per day ("boepd") in 1Q22 representing a 100% production increase when compared to 1Q.
I3 said this strong quarterly production represents a 100% increase over 1Q21 and is a direct result of the continued outperformance of the company’s low-decline base production, which is forecasted at 11.5%, as well as strong operational results across the Canadian portfolio.
i3 exited 1Q22 with record production of 20,312 boepd with April field sales estimates averaging 20,256 boepd. Following this, i3's Board of Directors approved a 2022 capital budget increase of up to an additional $50 million, internally funded through existing operations, over the previously announced Canadian capital budget of $47 million.
I3 said the increased capital budget was a direct result of its robust operational performance and forecasted strength in commodity prices. The enlarged capital budget of up to $97 million will allow for the expansion and acceleration of its key Canadian development opportunities.
i3 explained that the enlarged capital budget is fully-funded through existing Company resources (cash on hand and near-term forecasted cash flow), and is expected to materially enhance 2022 production and NOI ‘while preserving the Company's strong balance sheet.’
Earlier this month, i3 said it would increase the minimum dividend to be paid in 2022 by 25% from £11.827m to £14.784m, which is to be implemented by increasing the monthly dividend.
I3 said the move was due to the “ongoing exceptional performance of its production assets, positive results from the initial phase of its 2022 development drilling programme, continuing commodity price strength as well as the resultant positive impact on cash flow projections.”
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