RE: RNS28 Sep 2018 18:56
Farm out initiatives
The Company first considered engaging potential farminees in October of 2017. As this was ahead of the 30th Round's November 2017 bid date, i3 remained quite opaque about its intended bid target and limited the number of approached parties given Liberator West's strategic significance to us. Several showed interest and joint venture discussions were advanced across Q1 and Q2 of 2018. On 27 June 2018, i3 granted a 90-day period of exclusivity to a potential farminee during which the parties were to conclude contractual negotiations that, upon completion, would result in i3 being fully funded for both the Liberator field development and the appraisal of Liberator West.
During the exclusivity period, the joint project team formed between the parties constructively refined the Liberator field development plan and appraisal well location and agreed the commercial arrangements underpinning the completion of legally binding agreements. As was announced on 18th September, i3's potential joint venture partner was expected to deliver on key assurances within the 90-day period of exclusivity. Some of these conditions remained outstanding and were not expected to be addressed in advance of exclusivity ending on 24th September. It is important for i3's stakeholders to recognize that the aforementioned assurances are in no way related to the Liberator asset or project, commercial negotiations, or other elements within i3's control. They are structural issues of the potential farminee and outside of i3's ability to resolve. As was stated, i3 remains ready to enter a legally binding Farmout Agreement with this potential JV partner at such time as these key assurances have been provided.
To ensure the Liberator project is fully funded at FDP approval in 2019, the Company will without delay explore the interest of alternative potential farminees to join i3 in its development and appraisal of Liberator. We plan to engage an acquisitions and divestures ("A&D") advisor for this undertaking now that i3 is the 100% owner and operator of the entire Liberator structure, casting a much wider net than our October 2017, pre 30th Round Award position had allowed.
As described above, i3 seeks to maximise shareholder value through the right balance of JV farmout and self-funding. To facilitate this, the Company continues to progress multiple options, including an undertaking to upsize the previously announced US$25 million credit facility given stronger Brent pricing and i3's addition of Liberator West to its Reserves & Resource base.
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