REG - i3 Energy PLC - Q1 2024 Operational and Financial Results
15/05/2024 07:00
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RNS Number : 4458O i3 Energy PLC 15 May 2024
15 May 2024
i3 Energy plc
("i3", "i3 Energy", or the "Company")
Q1 2024 Operational and Financial Results
i3 Energy plc (AIM:I3E) (TSX:ITE), an independent oil and gas company with
assets and operations in the UK and Canada, is pleased to announce its
operating and financial results for the three months ended 31 March 2024. As
previously stated, the Company's Canadian shareholding has increased beyond
10% and, as a result, i3 is no longer a designated foreign issuer and
therefore no longer eligible for certain continuous disclosure exemptions
previously granted through National Instrument 71-102. As such, the Company
has commenced issuing quarterly financial reports and preparing continuous
disclosure in accordance with applicable Canadian securities laws. i3's
unaudited condensed interim financial statements for the three months ended 31
March 2024 and related Management's Discussion and Analysis ("MD&A") are
available on i3 Energy's website at https://i3.energy/ (https://i3.energy/)
and filed on SEDAR+.
Highlights:
· Free cash flow (FCF)((1)) for Q1 2024 was USD 15.0 million compared
to USD 9.9 million for the same 2023 period.
· A new CAD 75 million reserve-based senior secured credit facility
with the National Bank of Canada, comprised of a CAD 55 million revolving
facility and a CAD 20 million operating loan facility.
· Repayment of approximately CAD 57 million, representing the
outstanding balance of i3 Energy's existing CAD 75 million loan facility (the
"Debt Facility") with Trafigura Canada Ltd., a subsidiary of Trafigura Pte Ltd
("Trafigura").
· Average Q1 2024 production of 19,410 barrels of oil equivalent per
day ("boepd").
· The Company published its 2022 ESG Report, continued its CO2e
emissions reduction initiatives with the electrification of 3 well sites, and
downhole abandoned 4 wells.
· As part of i3's commitment to its total shareholder return model,
dividends of £3.084 million (USD 3.911 million) were declared and paid in Q1
2024.
· Post quarter-end, i3 entered into a definitive agreement to sell most
of the Company's royalty assets (the "Royalty Disposition") for a total gross
cash consideration of USD 24.81 million (CAD 33.50 million) before customary
closing adjustments, which translates to 6.9 times 2024 forecasted cash flow
and approximately USD 63,960 per flowing boepd.
· As at 31 March 2024, i3 had Net Debt((1)) of USD 21.0 million, which
was eliminated at the Close of the aforementioned Royalty Disposition.
· Post quarter-end, the Company further Closed the accretive
disposition of a non-core, non-operated, shallow dry gas focussed Northern
Alberta asset (Hangingstone), for realized proceeds of USD 0.3 million.
Majid Shafiq, CEO of i3 Energy plc, commented:
"Q1 2024 was a period of intense corporate activity during which we refinanced
our existing debt with a non-amortising, traditional oil and gas
reserves-based loan and laid the groundwork for monetising the majority of our
non-core royalty production which significantly strengthened our balance sheet
and increased liquidity. This financial restructuring supports the long-term
sustainability of our total shareholder return model and sets the Company up
for a busy operational period for the second half of the year, during which we
will drill a diversified inventory of drilling locations across our Canadian
portfolio, designed to grow production and advance development of some key
assets. We look forward to updating the market as the year progresses."
Financial and Operating Summary
OPERATIONAL: Three-months Ended 31 March 2024 Three-months Ended 31 March 2023
Average daily production:
Oil and condensate (bbl/d) 4,246 5,238
Natural gas liquids (bbl/d) 4,814 5,569
Natural gas (mcf/d) 60,009 69,555
Royalty interest (boepd) 348 373
Average Sales Production (boepd) 19,410 22,773
Average realised pricing:
Oil and condensate (CAD$/bbl) 89.57 95.80
Natural gas liquids (CAD$/bbl) 21.14 26.61
Natural gas (CAD$/mcf) 2.61 3.30
Royalty interest (CAD$/boe) 29.73 41.02
Total (CAD$/boe) 33.42 39.31
FINANCIAL: USD '000s USD '000s
Revenue (net of royalties) 39,825 52,803
Net Operating Income ("NOI")((1)) 15,962 30,204
Adjusted EBITDA((1)) 8,749 31,249
(Loss) / profit before Tax (4,943) 15,356
(Loss) / profit after Tax (7,727) 12,414
Net cash from operating activities 17,138 25,650
Acquisitions & Capex((1)) 2,177 15,787
FCF((1)) 14,961 9,881
Dividends declared and paid 3,911 7,437
NET OPERATING INCOME (USD/boe):
Oil and gas sales 24.79 29.07
Royalties (3.40) (4.28)
Processing income 1.14 0.91
Production costs (13.49) (10.96)
Net Operating Income (USD/boe)((1)) 9.04 14.74
Pence / share Pence / share
Basic EPS (0.51) 0.86
Diluted EPS (0.51) 0.84
As at As at
31 March 2024 31 December 2023
USD '000s USD '000s
Net Debt((1)) 21,008 23,005
(1) Non-IFRS measure. Refer to Note 1.
The Company experienced robust FCF((1)) for Q1 2024 of USD 15.0 million. i3
incurred an earnings loss in the first quarter, primarily as a result of
non-cash charges including, but not limited to, risk management contracts,
depletion/depreciation/amortization, increased deferred taxes and the
acceleration of deferred finance charges associated with the early expiration
of the Debt Facility.
Debt Refinancing
During the first quarter, the Company announced the successful establishment
of a reserve-based lending facility (the "Credit Facility"). The new Credit
Facility marked a significant step in transitioning i3's capital structure,
enhancing the Company's financial flexibility through improved liquidity and
enabling acceleration of its growth and income-based business plan.
The establishment of a CAD 75 million senior secured revolving credit facility
with the National Bank of Canada was utilized to settle the Company's existing
CAD 75 million Debt Facility with Trafigura, without prepayment penalty, of
which approximately CAD 57 million was outstanding at the time of the
repayment. Secured against substantially all the assets and shares of i3
Energy Canada Ltd., the new Credit Facility, comprised of a CAD 55 million
revolving facility and a CAD 20 million operating loan facility, has been
established for i3 Energy's wholly owned subsidiary, i3 Energy Canada Ltd.
The refinanced capital structure enhances the Company's free cash flow profile
through the elimination of the previously managed three-year, CAD 25 million
per annum, straight-line amortization schedule, which can now be redeployed to
accelerate the development of its extensive drilling inventory to enhance
shareholder value.
Production Update
Production in Q1 2024 averaged 19,410 boepd, comprised of 60.0 million
standard cubic feet of natural gas per day ("mmcf/d"), 4,814 barrels per day
("bbl/d") of natural gas liquids ("NGLs"), 4,246 bbl/d of oil & condensate
and 348 boepd of royalty interest production. The quarterly production
represents a decrease of approximately 4% relative to Q4 2023, resulting from
conservative capital management during the period of softening gas prices and
further downtime primarily due to extreme cold in January 2024, which led to a
loss of ~300 boepd for the month (or ~100 boepd for the quarter).
Hedging Programme
i3 continues to employ a defensive risk management strategy with current
hedges in place protecting USD 44.8 million of net operating income in 2024,
and covering 31%, 26%, 26% and 24% of the Company's projected Q1, Q2, Q3 and
Q4 2024 production volumes, respectively. i3's 2024 hedges are as follows:
Swaps Basis Swaps
GAS Volume (GJ) Price (CAD/GJ) Volume (mmbtu) Price (USD/mmbtu)
Q1 2024 2,275,000 3.04 nil nil
Q2 2024 1,365,000 2.52
Q3 2024 1,380,000 2.52
Q4 2024 1,685,000 2.64
Costless Collars
OIL Volume (bbl) Price (CAD/bbl) Volume (bbl) Avg Floor Price (CAD/bbl) Avg Ceiling Price (CAD/bbl)
Q1 2024 189,750 95.89 22,750 100.00 121.32
Q2 2024 182,000 98.45 38,000 95.99 108.46
Q3 2024 84,500 100.08 122,500 100.00 111.11
Q4 2024 145,550 97.41 41,450 100.37 111.46
Environmental, Social and Governance ("ESG")
Continuing with the ESG initiatives executed in 2023, i3 Energy has maintained
its commitment to reducing the Company's Scope 1 and Scope 2 carbon emissions.
i3 electrified three well sites throughout key operating areas, converting
combustion engines to electric drive engines on existing pumpjacks. The
Company further executed Phase 1 of the previously announced Alternative
Fugitive Emissions Management Programme (ALT FEMP), which images methane
emissions from the air. The effect of this program, along with corrective
actions applied, resulted in an annual emissions reduction of 3862 tCO2e.
Phase 2 of the ALT FEMP is currently underway.
During the period, i3 also downhole abandoned 4 gross wells (2.78 net) and, in
January 2024, the Company published its 2022 ESG Report. i3 remains dedicated
to environmental sustainability and strives towards continued positive
advancements in its ESG practices.
Return of Capital
The Company remains committed to delivering a sustainable dividend as part of
its total return model. The Q4 2023 dividend of £3.084 million (USD 3.911
million) or 0.2565 pence per share was declared and paid in Q1 2024. The Q1
2024 dividend of £3.084 million (USD 3.911 million) or 0.2565 pence per share
was declared in early April and subsequently paid in early May. Subject to
Board approval, the Company expects to pay the Q2 2024 dividend of 0.2565
pence per share in early Q3 2024, which translates to a forward yield of 9.4%
based on the closing price of i3's ordinary shares on 10 May 2024.
Post Quarter-end Events
Partial Sale of Royalty Assets
Subsequent to the first quarter, i3 announced that its subsidiary, i3 Energy
Canada Ltd. entered into a definitive agreement with a newly formed private
royalty company to sell the majority of the Company's royalty assets for a
total gross cash consideration of USD 24.81 million (CAD 33.50 million) before
customary closing adjustments.
The Royalty Disposition, involving most of the Company's royalty assets, but
not its core Simonette Royalty, translated to 6.9 times 2024 forecasted cash
flow and approximately USD 63,960 per flowing boe/d, which represents a
significant premium to the Company's current market valuations.
The proceeds of the Royalty Disposition fully eliminated i3's outstanding bank
indebtedness and established a working capital surplus without materially
impacting its working interest production base; which, together with
forecasted cash flows and undrawn credit facility, provides the Company with
significant liquidity to execute its growth and income strategies.
Partial Sale of Hangingstone
Post quarter-end, i3 Energy Closed a disposition encompassing most of its
position in the Company's non-core, non-operated, shallow dry gas focussed
Northern Alberta Hangingstone asset, for realized proceeds of USD 0.3 million.
The sub-economic asset produced net 115 boepd for the month of February 2024
and is forecast to return negative cash flows for the 12-month period of March
2024 to February 2025, based on strip pricing. The sale of these non-core
assets is highly accretive to the Company's Asset Retirement Obligations
("ARO") standing, further reducing the Company's total ARO by USD 1.2 million.
Outlook
Following the Company's recent USD 24.8 million partial sale of its royalty
assets, the elimination of all bank indebtedness and the establishment of a
USD 55.6 million reserve-based credit facility, i3 is well positioned to
execute its USD 50.9 million 2024 capital programme. The programme will be
fully funded from existing Company resources and is designed to balance
growth, financial discipline, and a sustainable long term-dividend through a
predictable development-focused programme, all while positioning the Company
to commence its Simonette Montney pad development drilling in Q1 2025.
The Company has an ongoing campaign of scouting, surveying and acquiring key
surface locations to ensure a large inventory of drillable oil and gas
locations, allowing it to pivot operationally to respond to commodity price
movements and operational risks, as they occur.
The capital programme will be focused on the second half of the year, with 85%
of the capital deployed over the balance of 2024. As such, the 2024 programme
anticipates drilling operations will commence in late Q2, with continuous
operations through to year-end. Should it be the case that the forward strip
forecast for commodity prices deviates from the Company's budgeted
projections, the Company is well positioned to both reallocate its drilling
locations to optimize economic returns or capitalize on strategic accretive
acquisitions as they are identified.
The Company is extremely pleased with recent objectives completed and is
excited to have realized increased liquidity on its balance sheet which,
combined with stable cash flows, can be used to support both its organic and
inorganic initiatives during the remainder of 2024.
The Company is pleased to present a snapshot of our Q1 2024 financial results
below. i3's unaudited condensed interim financial statements for the three
months ended 31 March 2024 and related Management's Discussion and Analysis
("MD&A") are available on i3 Energy's website at https://i3.energy/
(https://i3.energy/) and filed on SEDAR+.
Financial Statements
Condensed Consolidated Statement of Comprehensive Income
Three-months Ended 31 March 2024 Three-months Ended
31 March 2023
£'000 £'000
(unaudited) (unaudited)
Revenue 31,408 43,452
Production costs (18,790) (18,490)
(Loss) / gain on risk management contracts (3,083) 2,956
Depreciation and depletion (8,633) (10,708)
Gross profit 902 17,210
Administrative expenses (2,851) (2,332)
Operating (loss) / profit (1,949) 14,878
Finance income 216 129
Finance costs (2,165) (2,370)
(Loss) / profit before tax (3,898) 12,637
Tax charge (2,196) (2,421)
(Loss) / profit for the period (6,094) 10,216
Other comprehensive loss:
Items that may be reclassified subsequently to profit or loss:
Foreign exchange differences on translation of foreign operations (2,470) (3,828)
Other comprehensive loss for the period, net of tax (2,470) (3,828)
Total comprehensive (loss) / income for the period (8,564) 6,388
Earnings per share Pence Pence
(Loss) / earnings per share - basic (0.51) 0.86
(Loss) / earnings per share - diluted (0.51) 0.84
Condensed Consolidated Statement of Financial Position
31 March 2024 31 December 2023
£'000 £'000
(unaudited) (audited)
Non-current assets
Property, plant & equipment 190,577 205,667
Exploration and evaluation assets 63,309 63,133
Total non-current assets 253,886 268,800
Current assets
Cash and cash equivalents 1,022 23,507
Trade and other receivables 20,834 20,534
Income taxes receivable 343 205
Risk management contracts 1,048 1,701
Inventory 1,857 1,847
Total current assets 25,104 47,794
Current liabilities
Trade and other payables (27,667) (27,640)
Risk management contracts (2,637) (136)
Borrowings and leases (113) (14,001)
Decommissioning provision (3,823) (3,244)
Total current liabilities (34,240) (45,021)
Net current (liabilities) / assets (9,137) 2,773
Non-current liabilities
Borrowings and leases (10,843) (20,568)
Decommissioning provision (71,569) (78,109)
Deferred tax liability (10,593) (9,817)
Other non-current liabilities (207) (84)
Total non-current liabilities (93,212) (108,578)
Net assets 151,538 162,995
Capital and reserves
Ordinary shares 120 120
Deferred shares 50 50
Share premium - -
Share-based payment reserve 7,083 6,892
Foreign currency translation reserve 1,360 3,830
Retained earnings 142,925 152,103
Shareholders' funds 151,538 162,995
Condensed Consolidated Statement of Cash Flow
Three-months Ended Three-months Ended
31 March 2024 31 March 2023
OPERATING ACTIVITIES £'000 £'000
(unaudited) (unaudited)
(Loss) / profit before tax (3,898) 12,637
Adjustments for:
Depreciation and depletion 8,633 10,708
Finance costs 2,165 2,370
Unrealised loss on risk management contracts 3,126 843
Unrealised FX loss / (gain) 19 (14)
Share-based payments expense - employees (including NEDs) 191 141
Expenditure on decommissioning oil and gas assets (543) (968)
Current tax expense (1,255) (4,609)
Changes in non-cash working capital - operating activities 5,078 -
Net cash from operating activities 13,516 21,108
INVESTING ACTIVITIES
Acquisitions - (13)
Additions to property, plant & equipment (1,418) (11,951)
Disposal of property, plant & equipment - -
Additions to exploration and evaluation assets (299) (1,027)
Tax credit for R&D expenditure - 184
Changes in non-cash working capital - investing activities (5,376) (5,575)
Net cash used in investing activities (7,093) (18,382)
FINANCING ACTIVITIES
Exercise of warrants and options - 13
Repayment of Debt Facility (35,272) -
Net draw on Credit Facility 12,024 -
Payment of deferred finance costs (1,273) -
Interest and other finance charges paid (856) (649)
Lease payments (30) -
Dividends declared (3,084) (6,120)
Changes in non-cash working capital - financing activities - 67
Net cash used in financing activities (28,491) (6,689)
Effect of exchange rate changes on cash (417) -
Net Decrease in cash and cash equivalents (22,485) (3,963)
Cash and cash equivalents, beginning of period 23,507 16,560
CASH AND CASH EQUIVALENTS, END OF PERIOD 1,022 12,597
NoTE 1: Alternate performance measures
The Group uses Alternate Performance Measures ("APMs"), commonly referred to
as non-IFRS measures, when assessing and discussing the Group's financial
performance and financial position. APMs are not defined under IFRS and are
not considered to be a substitute for or superior to IFRS measures. Other
companies may not calculate similarly defined or described measures, and
therefore their comparability may be limited. The Group continually monitors
the selection and definitions of its APMs, which may change in future
reporting periods. All USD figures were derived from the Group's GBP figures,
which is the Group's IFRS presentation currency, and may differ from IFRS
figures prepared using USD as their presentation currency.
EBITDA and Adjusted EBITDA
EBITDA is defined as earnings before depreciation and depletion, financial
costs, and tax. Adjusted EBITDA is defined as EBITDA before gain on bargain
purchase and acquisition costs. Management believes that EBITDA provides
useful information into the operating performance of the Group, is commonly
used within the oil and gas sector, and assists our management and investors
by increasing comparability from period to period. Adjusted EBITDA removes the
gain or loss on bargain purchase and asset dispositions and the related
acquisition costs which management does not consider to be representative of
the underlying operations of the Group.
A reconciliation of profit as reported under IFRS to EBITDA and Adjusted
EBITDA is provided below.
Three-months Ended 31 March 2024 Three-months Ended 31 March 2023
£'000 £'000
(Loss) / Profit for the period (6,094) 10,216
Depreciation and depletion 8,633 10,708
Finance costs 2,165 2,370
Tax 2,196 2,421
EBITDA 6,900 25,715
Acquisition costs - -
Loss / (gain) on bargain purchase and asset dispositions - -
Adjusted EBITDA 6,900 25,715
Adjusted EBITDA presented in USD ((i)) 8,749 31,249
(i) Amounts converted at the period-average GBP:USD exchange rates of
1.2680 and 1.2152 for the 2024 and 2023 periods, respectively.
Net operating income
Net operating income is defined as gross profit before depreciation and
depletion, gains or losses on risk management contracts, and other operating
income, which equals revenue from the sale of oil and gas and processing
income, less production costs. Management believes that net operating income
is a useful supplementary measure as it provides investors with information on
operating margins before non-cash depreciation and depletion charges and gains
or losses on risk management contracts.
A reconciliation of gross profit as reported under IFRS to net operating
income is provided below.
Three-months Ended 31 March 2024 Three-months Ended 31 March 2023
£'000 £'000
Gross profit 902 17,210
Depreciation and depletion 8,633 10,708
Loss / (gain) on risk management contracts 3,083 (2,956)
Other operating income (30) (107)
Net operating income 12,588 24,855
Net operating income presented in USD ((i)) 15,962 30,204
(i) Amounts converted at the period-average GBP:USD exchange rates of
1.2680 and 1.2152 for the 2024 and 2023 periods, respectively.
Acquisitions & Capex
Acquisitions & Capex is defined as cash expenditures on acquisitions,
PP&E, and E&E. Management believes that Acquisition & Capex is a
useful supplementary measure as it provides investors with information on cash
capital investment during the period.
A reconciliation of the various line items per the statement of cash flow to
Acquisitions & Capex is provided below.
Three-months Ended 31 March 2024 Three-months Ended 31 March 2023
£'000 £'000
Acquisitions - 13
Expenditures on property, plant & equipment 1,418 11,951
Expenditures on exploration and evaluation assets 299 1,027
Acquisitions & Capex 1,717 12,991
Acquisitions & Capex presented in USD ((i)) 2,177 15,787
(i) Amounts converted at the period-average GBP:USD exchange rates of
1.2680 and 1.2152 for the 2024 and 2023 periods, respectively.
Free cash flow (FCF)
FCF is defined as cash from / (used in) operating activities less cash capital
expenditures on PP&E and E&E. Management believes that FCF provides
useful information to management and investors about the Group's ability to
pay dividends.
A reconciliation of cash from / (used in) operating activities to FCF is
provided below.
Three-months Ended 31 March 2024 Three-months Ended 31 March 2023
£'000 £'000
Net cash from operating activities 13,516 21,109
Expenditures on property, plant & equipment (1,418) (11,951)
Expenditures on exploration and evaluation assets (299) (1,027)
FCF 11,799 8,131
FCF presented in USD ((i)) 14,961 9,881
(i) Amounts converted at the period-average GBP:USD exchange rates of
1.2680 and 1.2152 for the 2024 and 2023 periods, respectively.
Net debt
Net debt is defined as borrowings and leases and trade and other payables,
less cash and cash equivalents and trade and other receivables. This
definition was expanded in 2023 to include other non-current liabilities which
is a new account balance that arose during the year. Management believes that
net debt is a meaningful measure to monitor the liquidity position of the
Group.
A reconciliation of the various line items per the statement of financial
position to net debt is provided below.
31 March 2024 31 December 2023
£'000 £'000
Borrowings and leases 10,956 34,569
Trade and other payables 27,667 27,640
Other non-current liabilities 207 84
Income taxes (receivable) / payable (343) (205)
Cash and cash equivalents (1,022) (23,507)
Trade and other receivables (20,834) (20,534)
Net debt 16,631 18,047
Net debt presented in USD ((ii)) 21,008 23,005
(ii) Amounts converted at the period-end GBP:USD exchange rates of 1.2632
and 1.2747 for the 2024 and 2023 periods, respectively.
END
Qualified Person's Statement
In accordance with the AIM Note for Mining and Oil and Gas Companies, i3
discloses that Majid Shafiq is the qualified person who has reviewed the
technical information contained in this document. He has a Master's Degree in
Petroleum Engineering from Heriot-Watt University and is a member of the
Society of Petroleum Engineers. Majid Shafiq consents to the inclusion of the
information in the form and context in which it appears.
Enquiries:
i3 Energy plc c/o Camarco
Majid Shafiq (CEO) Tel: +44 (0) 203 757 4980
WH Ireland Limited (Nomad and Joint Broker)
James Joyce, Darshan Patel Tel: +44 (0) 207 220 1666
Tennyson Securities (Joint Broker)
Peter Krens Tel: +44 (0) 207 186 9030
Stifel Nicolaus Europe Limited (Joint Broker)
Ashton Clanfield, Callum Stewart Tel: +44 (0) 20 7710 7600
Camarco
Andrew Turner, Violet Wilson, Sam Morris Tel: +44 (0) 203 757 4980
Notes to Editors:
i3 Energy is an oil and gas Company with a low cost, diversified, growing
production base in Canada's most prolific hydrocarbon region, the Western
Canadian Sedimentary Basin and appraisal assets in the North Sea with
significant upside.
The Company is well positioned to deliver future growth through the
optimisation of its existing asset base and the acquisition of long life, low
decline conventional production assets.
i3 is dedicated to responsible corporate practices and the environment, and
places high value on adhering to strong Environmental, Social and Governance
("ESG") practices. i3 is proud of its performance to date as a responsible
steward of the environment, people, and capital management. The Company is
committed to maintaining an ESG strategy, which has broader implications to
long-term value creation, as these benefits extend beyond regulatory
requirements.
i3 Energy is listed on the AIM market of the London Stock Exchange under the
symbol I3E and on the Toronto Stock Exchange under the symbol ITE. For further
information on i3 Energy please visit https://i3.energy
This announcement contains inside information for the purposes of Article 7 of
the UK version of Regulation (EU) No 596/2014 which is part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon
the publication of this announcement via a Regulatory Information Service,
this inside information is now considered to be in the public domain.
Forward-Looking Statements
This press release offers our assessment of i3's future plans and operations
as at the time of dissemination and contains certain forward-looking
information and statements within the meaning of applicable securities laws.
The use of any of the words "anticipate", "continue", "estimate", "expect",
"forecast", "may", "will", "project", "should", "plan", "intend", "believe"
and similar expressions (including the negatives thereof) are intended to
identify forward looking information or statements.
The forward-looking information and statements included in this news release
are not guarantees of future performance and should not be unduly relied upon.
Such information and statements involve known and unknown risks, uncertainties
and other factors that may cause actual results or events to differ materially
from those anticipated in such forward-looking information or statements
including, without limitation: those relating to results of operations and
financial condition; general economic conditions; industry conditions; changes
in regulatory and taxation regimes; volatility of commodity prices; escalation
of operating and capital costs; currency fluctuations; the availability of
services; imprecision of reserve estimates; geological, technical, drilling
and processing problems; environmental risks; weather; the lack of
availability of qualified personnel or management; stock market volatility;
the ability to access sufficient capital from internal and external sources;
and competition from other industry participants for, among other things,
capital, services, acquisitions of reserves, undeveloped lands and skilled
personnel. Risks are described in more detail in our Financial Review, which
is available on www.i3.energy (http://www.i3.energy/) and
on www.sedarplus.ca. Forward-looking statements are provided to allow
investors to have a greater understanding of our business.
You are cautioned that the assumptions used in the preparation of such
information and statements, including, among other things: future oil and
natural gas prices; future capital expenditure levels; future production
levels; future exchange rates; the cost of developing and expanding our
assets; our ability to obtain equipment in a timely manner to carry out
development activities; our ability to fund future dividends; our ability to
market our oil and natural gas successfully to current and new customers; the
impact of increasing competition; the availability of adequate and acceptable
debt and equity financing and funds from operations to fund our planned
expenditures; and our ability to add production and reserves through our
development and acquisition activities, although considered reasonable at the
time of preparation, may prove to be imprecise and, as such, undue reliance
should not be placed on forward-looking statements. Our actual results,
performance, or achievement could differ materially from those expressed in,
or implied by, these forward-looking statements. We can give no assurance that
any of the events anticipated will transpire or occur, or if any of them do,
what benefits we will derive from them. The forward-looking information and
statements contained in this document is expressly qualified by this
cautionary statement. Our policy for updating forward-looking statements is
that i3 disclaims, except as required by law, any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
Non-IFRS Financial Measures
i3 uses the following terms for measurement within this press release that do
not have a standardized prescribed meaning under International Financial
Reporting Standards ("IFRS") and these measurements may not be comparable with
the calculation of similar measurements of other entities. The Company refers
to these as Non-IFRS Measures or Alternate Performance Measures ("APMs"). APMs
are not defined under IFRS and are not considered to be a substitute for or
superior to IFRS measures. Other companies may not calculate similarly defined
or described measures, and therefore their comparability may be limited. The
Company continually monitors the selection and definitions of its APMs, which
may change in future reporting periods. Refer to Note 1 Alternative
Performance Measures for further discussion.
51-101 Advisory
In conformity with National Instrument 51-101, Standards for Disclosure of Oil
and Gas Activities ("NI 51-101"), natural gas volumes have been converted to
barrels of oil equivalent ("boe") using a conversion rate of six thousand
cubic feet of natural gas to one barrel of oil. In certain circumstances,
natural gas liquid volumes have been converted to a thousand cubic feet
equivalent ("mcfe") on the basis of one barrel of natural gas liquids to six
thousand cubic feet of gas. Boes and mcfes may be misleading, particularly if
used in isolation. A conversion ratio of one barrel to six thousand cubic feet
of natural gas is based on an energy equivalency conversion method primarily
applicable at the burner tip and does not represent a value equivalency at the
wellhead. Given that the value ratio based on the current price of crude oil
as compared to natural gas is significantly different from the energy
equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be
misleading as an indication of value.
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