Member Info for JoeSoap

Yesterday there was a good exchange of views. Perhaps the most profound comment though was Tony's 'Peer translates to “of equal standing” – BOEPD is misleading as you can see that Oil weighted stocks have significantly higher revenues than their Gas weighted counter parts.'

But it is more than that and is where the comparisons cited fail as i3E has no peer. I do not know of another London listed O&G stock with NS acreage and Canadian production with a secondary listing on TSX. Period.

All the Canadian generated income has to first fund London and the NS team and Licences, before considering what to do with the 'FCF'.

However, it is important to remember that the Canadian venture was only undertaken to meet the obligations of the revised loan note terms, and that the fund raise that came with it had a Dividend Policy: 'to begin paying a dividend of between 20 per cent. and 30 per cent. of free cash flow annually, progressively increasing this to 40 per cent. asi3's Canadian business expand'. That Loan note provider is still the largest stockholder and will clearly be afforded the same access to the BOD that Eric enjoys with the BODs of companies with his much smaller percentage holdings to express his preferential views and which may or may not be aligned with PIs.

With the NS still in abeyance, the progress on the Canadian assets was not only derailed by the Trafigura amortising loan and covenants (in conjunction with realised lower commodity prices) but also resulted in a halving of dividend.

Now, free from those shackles with the RBL, the long awaited 2024 Capex plan can be delivered. But there will still be some wondering why an appropriate plan could not be announced last year and updated as things changed. Q1 was put on ice.

Apparently C$232,649M were to be spent this year according to the 2022 Reserves Report...but just C$36,630M according to the 2023 Reserves Report. DYOC.

jimo

joe

We know that the capital programme has been deferred to 'mid-April' but what of the YE Results?

Is anybody expecting them to be released today to satisfy the Canadian regulation deadline: 90days from YE but extended to 2 April due to the long Easter weekend?

Busy 4 days ahead...

11 March:

The Circular will be available on the Company's website at https://i3.energy on the

anticipated date of posting, 25 March 2024,

&

26 February 2024:

As we enter 2024 with continued weakness in commodity price forecasts, in particular for North American gas, our business strategy remains flexible between high rate of return organic drilling and inorganic growth opportunities. The Company is progressing several initiatives which will be incorporated into an optimised 2024

drilling and capital programme, and we look forward to updating the market on this during the course of March."

Year-End 2023 Reserves Update

i3's year-end 2023 independent reserves evaluation is in progress and the Company expects to release its final numbers in late March, prior to the dissemination of its 2023 year-end financial statements.

Year-End 2023 and 2024 Quarterly Financial Reporting

As the Company's Canadian shareholding has now increased beyond 10%, i3 is no longer a designated foreign issuer and therefore is no longer eligible for TSX continuous disclosure exemptions previously granted through National Instrument 71-102. As such, the Company will commence issuing TSX required quarterly financial reports for Q1 2024, including a Management Discussion and Analysis (MD&A). Additionally, an Annual Information Form (AIF) will be included as part of the Company's 2023 year-end financial statements which will be issued by 31 March 2024.

The Art of Accounting.

Similar to the art of photography: now you see it, now you don't.

aiui, the accounting rules now adopted have created an embarrasment of riches in the wrong place in the accounts.

This can be resolved by issuing new bonus shares in the company [notionally doubling], creating an (almost equal) rise in share premium account that the courts can then agree to cancel and we are back at square one. What's not to like??

The accounts for 2023 have therefore been completed and the Asset value recorded will have come from the reserves statement, all subject to final audit and board meeting approval before being made public. (2 of the 3 in the last RNS)

Previously, the Shareholder agreement to capital reduction (with near identical justification) was tagged into the AGM. This time it's stand alone.

Or is it? And what is the 'urgency'?

What about the third item?

Looks like a busy end to the month, let's hope for clean announcements and that they do not need to re-issue.

jimo

joe

Contd.

Some i3E "small print":-

18 Risk management contracts

The Group enters risk management contracts to hedge a portion of the Group’s exposure to fluctuations in prevailing commodity prices for oil, gas, and natural gas liquids. The Group’s physical commodity contracts represent physical delivery sales contracts in the ordinary course of business and are therefore not recorded at fair value in the consolidated financial statements. The Group’s financial risk management contracts have not been designated as hedging instruments in a hedge relationship under IFRS 9 and are carried at fair value through profit and loss. The financial risk management contracts are classified as Level 2 in the fair value hierarchy as defined by IFRS 13 ‘Fair value measurements’ (note 22).

Net operating income (NOI)

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.

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.

HTH

As all the crude oil now has to be sold to Trafigura, a condition attached to the amortising loan they provided, will these hedges (and collars not disussed below!) all have to be with Trafigura, a multinational commodity trading company?

This year, the loan repayments are c. 30M C$ -> c. 22.5US$, so if they have protected approximately USD $41 million of 2024 NOI, the loan repayments are covered.

The volume and time horizon, however, are unprecedented at i3E. Is this strategy the work of Jason Dranchuk or might one suspect some Trafigura obligation?

The magnitude of the hedging cannot be known until there is some annual guidance.

Tony took the latest quarter production figures in his calculations, which is not unreasonable; trouble is afaik they will not drill in the winter access only area this year, have not announced that they will drill at all in Q1, and they have a 17% decline rate. Two Q4 drills were successful and will add to the production figures, as will the suspended 2023 well which is now delivering oil for trucking, whilst the winter roads exist, but we do not have information on the duration of the reductions attributed to "conservative capital management during the period of softening gas prices".

If they are to continue their Y-O-Y production growth, expect it to be bought.

And with this level of hedging, PIs will need to contain their excitement at upward moving commodity prices as the bottom line will be less affected.

jimo

joe

Nomad, if you look at the LSExchange reported trades, you will see that high opening prices are a standard feature with a SINT trader regularly waiting on the bell with his penny buys which naturally are at the top of the price range. Frequently it's followed buy a small sell, at the bottom of the spread. Todays 3 trades were all timed to the same second...

Earlier this week was probably also slightly distorted also by the small DRIP buys going through at a time of their choice, not yours.

And it takes an 'A'trade to move the reported price here.

B b but the Boardroom is at neither of those locations

As it's Clive's birthday today, are you wondering if they are all partying at that brewery Kuat established and ran?

The 3 AB licence may be 'work in progress' with the authorities, but having defaulted on the terms of the licence when it was transferred it seems churlish to blame the previous owners for the lapse. At least the family got their value out of it, even if it was in CASP shares. It was Casp that had to write down that value on their books, and it is worth remembering that Total could not do as they wished on the next door licence, it went to the state oil company.

afaik, there has never been a mention of 'Reserves' on Block 8, and the two wells would seem to be a requirement of the licence. If, as Smarty advises, they are on the two other structures whether that makes them Exploration/Appraisal/Development wells could be debated as they have not declared any previous drilling beyond the two producers, but they would not be classed as Production wells (even though any oil produced could be sold) until the Licence was upgraded and that would require more successful wells aiui.

That would also allow Gaffney Cline & Associates ("GCA") to make a technical audit and assign Reserves as they did with MJF & South Yelemes in 2016.

There are no Reserves associated with the Deeps Licence (the BNG Contract Area), and although 802 was the final well required under the original work programme, the current work programme requires Well 803 to be drilled before the end of the year. "Our intention is to spud this well in Q3 2023 and complete the drilling by the end of the year."(AR 2022 -July2023)

Further info on progress is still awaited beyond the delay to Q4 in the H1 report.(Sept 2023)

The Licence was awarded in 2007 and has been successively extended 'until 2024'. Is that the same as 31 December 2023, or is there a date in 2024? It was noted that there was no mention of further extending the Licence, but an overt statement that after 803 "it is unlikely any further deep wells will be drilled at the BNG Contract area."

DYOC, but remember the MJF Licence payment was for the whole of BNG.

They also said that they were evaluating other projects, including minerals.

They are still a NED or two shy: the next update might be interesting...

Will they have mentioned tonight why the two transfers of assets to Axiom Oil And Gas Inc. were "Withdrawn" and what the consequences of that action are?

In total 43 Wells and 2 Facilities Licences were withdrawn from transfer on 9 November.

DM ' -ish'

Excellent use of the suffix, helps to clarify their best intent plan.

However, they have it all covered by the 'forward looking' clause...

Do you recall the sequential 'Red Buses' drilling plan??

Yes, Tony.

It's problem with having no edit facility particularly when the brain is wondering why Jason didn't take the opportunity to average down, while his bosses were averaging up, and the fingers then type his name...

And how did Jason get to 8m+, just behind Majid??

3LB, the trades info here says that the delayed 14:14:12 trade was 'Deletion', followed by the same volume/price trade restated at 16:00:55, suggesting some error in the original execution details that had to be corrected.

So not 3 x 550,000 buys as there was just one valid trade.

And given the decline in sp since the trade was initially actioned a 'buy' would be less likely.

jimo

joe

Smarty re

"Seems strange that they made the appointment and launched new IP but maybe that’s just coincidence and they just wanted a firm that was more suited to their requirements whilst saving a few quid."

In line with their obligations, BDO said they "changed to a firm with lower audit fee."

And nothing needs to be brought to the attention of members or creditors.

re Block8: You may recall that at A8 "the well flowed for approximately seven hours, producing at the rate of approximately 1,500bopd. The flow ended with the well becoming blocked with excess drilling fluid originally introduced during the drilling phase."

And the AR2022

"During 2021 we decided to resume drilling towards the original objective in the

Devonian. Drilling reached a final depth of 5,400 meters in early December. Neither of

the two intervals of interest perforated resulted in commercial quantities of oil with

pressures below the levels expected. Accordingly, the well has been abandoned."

When will the new independent directors be appointed?

Somm, if we assume that there is some veracity in the various RNSs, it could be explained by A8 being drilled with A G70 rig, rather than the NEW rig that they had expected to get.

A8

30Sept2019

The well was spudded with an intended Total Depth of 5,300 meters, but in conjunction with our drilling partners,

Sinopec, we decided to seek to exploit the interval already identified in drilling to a depth of 4,520 meters.

As A8 was spudded in November 2018, it was at the time that they used hired rigs, prior to buying the job lot in Sept19, which may have included a G70 but termed 350tonne rig which could drill to 5000m in the RNS, but if not, then they intend to re-hire that same rig. Was it Sinopecs, perchance?

It seems that they have accepted that they do not need to go to 5300 to hit sufficient gold, perhaps because they don't have the necessary rig power or enough drill pipe!

wrt 155, don't confuse TD with TVD, it could be a longer horizontal...

Well it seems that the CR was delivered in a timely manner to Companies House.

It was just the lackadaisical management of the company that failed to share the news: must have been brooding over maxing out the options RNS.

Given the wait, there is every possibility that the HT&P has now caused a mud blockage that needs specialized equipment to be brought in and an, as yet, un-formulated acid...

Just saying.

Stas, I expect an RNS tomorrow morning, very similar to this from their previous reduction:

"Maiden Dividend

The final confirmation hearing in the High Court of Justice of England and Wales was held yesterday and the court approved the cancellation of i3 Energy's share premium account (the "Capital Reduction"). The court order together with the court approved statement of capital has been delivered to the Registrar of Companies and the Capital Reduction will finally become effective upon the registration of the court order by the Registrar of Companies, which is expected to occur in the next few days. The Ex- dividend date, Record Date and Payment Date will be announced immediately following confirmation of the registration. With then predicted timing of the above registration by the Registrar of Companies, i3 expects the Ex-dividend date to be during the week commencing 12 July 2021."

sans the divi bit, of course!

[30 June 2021]

It also came with news of the Completion of Wapiti Production Acquisition; whether they will bundle additional info tomorrow, and there must be some due, we will very soon know.

PS the well licence referred to by Tony was spud on Friday.

PPS if there is no RNS, where will the sp be?