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(Alliance News) - i3 Energy PLC said it raised GBP40 million in a placing and PrimaryBid offer on Wednesday to fund the purchase of exploration assets in central Alberta, Canada.
The Aberdeen-based oil and gas company sold 363.7 million shares for 11 pence each.
Following the fundraise, i3 Energy shares were trading down 17% at 11.95p each in London on Wednesday afternoon.
The firm said it will use the funds to buy petroleum and infrastructure assets in central Alberta from Cenovus Energy Inc for CAD65 million, around GBP37.8 million.
The new Canadian assets will likely add around 8,400 barrels of oil equivalent per day to its operations, including 51% oil and 49% natural gas liquids, i3 said.
The company added that the newly acquired assets have proved and probable developed producing reserves of 27.5 million barrels of oil equivalent, offering a potential USD90 million in 10% discounted estimated net present value.
Provided there is only a small decline in the production profile and minimal annual maintenance, the company said the Alberta assets will produce an estimated USD31 million in net operating income in the next 12 months.
The firm noted that that acquisition offers opportunities for future exploration, with over 220 identified drilling locations and reactivation opportunities across 212,000 net acres and a 1,140-kilometre network of operated pipelines and key processing facilities.
i3 Energy's chief executive, Majid Shafiq, noted: "This transaction not only scales up our cashflow, but it will also, in the near term, lower our unit operating costs, increase third party tariff income and add scale to i3's expanding list of varied development opportunities, which will materially increase our options to both grow the business and manage risks."
By Scarlett Butler; scarlettbutler@alliancenews.com
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