Member Info for tonynorstrom1

The next production update will likely be our best todate - the data points to production increasing by over 10% from an already record high with a lot more well still to come by the end of the year.

The question is when i3e plan to release the next production and financial update - before, with Serenity Result of after ?

It's not difficult to estimate how much cash EOG have within a reasonably degree of accuracy - its not rocket science. Currently EOG have very little to spend their money on except Simon Oddie's salary and bonuses.

It's pretty clear that if a side track is required - this will eat up a significant chunk of i3e's cash resources and the extra $1m provides a cushion if additional expenses arise from wherever (new project or unexpected expenses)

Also Mcfishy on the EOG is pretty much an expert on everything - he’s a holder of RBD also - ask him !

Why wouldn’t you be buying more EOG - at 3p you were saying ridiculously undervalued and SP supported by Wressle alone - now you can buy at a 50% discount - why would you not be topping up there.

What the company have said is production over 24,000 boed by the end of the year. However, they say 7 wells cleaning up and should be on production before the end of October. By my reckoning - these are the 7 wells:

3 x Glautenitic (Central Alberta) = 798 boepd each (40 oil, 185 NGL's, 573 Gas)
1 x Simonette = 1000 boepd (718 Oil, 282 Gas)
2 x (net 1) Marten Hills = 150 bopd (Oil)
1 x (net 0.2) Wapiti =34 boepd (16 Oil, 8 NGL's , 10 Gas)

Total 3579 boepd (1004 Oil, 563 NGL's, 2012 Gas)

So October production update should be over 24K. In addition 3 additional wells have been spud including another Simonette well and 3 more have already been licensed.

"Save major disruptions in the macro-economic forces that determine our industry’s valuations, I believe i3’s continued success is inevitable."

Is it not where you store your wine?

I'm sure that Gusto did not mean it but i'm going to give him the chump of the week award anyway. WHI's view:

FIRST LIGHT
i3 Energy (i3E) – Corporate – Graham Heath Resigning, Ryan Heath Appointed to Board
Market Cap £277.3m Share Price 23.25p

i3 Energy announced that Graham Heath, CFO and Executive Director, will be resigning to focus on the rehabilitation of his health and to pursue other interests. The company announced its intention to appoint Ryan Heath, President of i3
Canada, to the board. Finally, the company stated that it has commenced a search for a replacement CFO.

WHI View: Graham Heath has been instrumental in creating from scratch one of the best AIM listed oil & gas companies, in our opinion, in an extremely countercyclical context. i3 Energy has completed a number of extremely value accretive transactions while much of the industry was frozen – it has been non-stop and every deal has been a winner. We are still somewhat amazed that an AIM listed company is operating in the very best acreage of Canada, in a context where there are hundreds of excellent North American oil & gas companies all vying for the best lands. Buying the best land before it is recognised is the name of the game for long-term growth. We believe that Ryan Heath has been a key reason i3 Energy is so well positioned in Canada’s best acreage. We are also very pleased to see the company’s wells, many of which are technically challenging, coming in with a 100% success rate with excellent production rates. Again, we believe that Ryan Heath has been instrumental in creating the operational success the company has experienced in Canada. We believe having him on the board strengthens the company. Graham Heath has been a force of nature, creating some of the best deals we have ever seen for the benefit of i3 Energy’s shareholders in some of the most challenging conditions the oil & gas sector has ever experienced. We see the company evolving in many ways from a deal-making company into a traditional oil & gas company: We see the core thrust of value creation shifting from deals to drilling. In this respect, Graham Heath has again shown that his timing is absolutely perfect. The extraordinarily value accretive deals completed at the bottom of the market and in the chaos of COVID made the most of the opportunities of that period. Although we are sure the company will continuously be on the lookout for more value accretive deals, we believe that given the
Marketing Communication landholdings secured by the company with over 400 undrilled well locations, combined with i3 Energy’s operational excellence, now is the time for i3 Energy to drill wells. Led by CEO, Majid Shafiq, we believe the company remains on a trajectory of robust value creation. We reiterate our fair value estimate of 66p/sh, of which 49p/sh relates to the company’s Canadian operations (net of balance sheet adjustments) with the remainder attributable to the potential of the company’s UK North

Ryan his brother - he was the CEO of Toscana - the first Company i3e bought so was instrumental with Graham in forging the Company as it is now.

A shocker of an RNS - Graham has been the main face of i3e for me over the last 3 years and has been a significant part of why I maintained the faith and trust in i3e. Probably more than a few others here feel the same way. I'm sure we all wish Graham a speedy recovery.

And as Graham said in the RNS:

"With many exciting deliverables ahead, trying to find the "right time" to depart this dynamic business has been difficult........."

"I depart i3 in the best condition of its history - growing production, strong cash flow and balance sheet, a strong dividend yield, and ongoing operations intended to de-risk and convert high-value assets within our portfolio to production and reserves."

Well it certainly wouldn't be "the economy forecast agency" - wtf are they ?

Gusto - you back?

Yanis,

No one is as experienced as Mcfishy - if your invested here, you should not let him chase you off the board.

A bit of balance and contrarian thinking is a good thing!

https://oilprice.com/Energy/Crude-Oil/Razor-Thin-Spare-Capacity-To-Keep-Oil-Prices-Elevated.html

why oil prices may not fall too much further.

https://wp-i3energy-2021.s3.eu-west-2.amazonaws.com/media/2021/11/20190115-i3-ENERGY-Q1-UPDATE-v1.3.pdf

Interesting to go back to an early 2019 i3e presentation that outlines the full development of the Liberator phase 1, Serenity and Liberator Phase 2. A couple of interesting points:

1) required Capex for Liberator phase 1 - useful information for estimating what a small Serenity Development might cost.

2) Production Profile provided for the 3 developments - strip out Liberator Phase 1(License relinquished) and there's potentially a full field development of up to 50,000 bopd

Boom Boom

I agree with some of your comments - but not all:

1) Even in a single well tie back - the required funds will be in excess of EOG's pockets via FCF and a reserve based lending facility - in my opinion only. Investors should run the numbers themselves and make their own assessment.

2) "if S-2 failed to find commercial oil, then the development will be include one tie up well to Tain facility." - isdeer posted the same on the i3e board. I gave my thoughts there - suffice to say I did not agree entirely though this is certainly a possibility.

GLA - and lets hope the drill comes in and we all make lots of money!

Wraith,

If you listen again - SO addressed future appraisal wells of the Moroccon & Irish assets along with development of Wressle only, he did not address how they would fund development of Serenity.

I emailed EOG to ask this question specifically - they came back and referred to the previous RNS/ placing which is of course specific to the appraisal well only. I have since forwarded the email twice more and reworded for the avoidance of any doubt on what the question was and so far I do not have a response. Due to the larger funds required for an actual development and even allowing for the fact that EOG's portion of these costs is only 25% - I think its fair to say they would have to consider all options including a further equity raise or even selling down 25% to say 15%.

i3e as a reference have previously said they dont intend to fully finance their part of the development and would look for a further farm down.

ignore the Westwood energy link below - not sure how it got into the post.

I will update my spread sheet this weekend with the new hedges / oil price to check on the dividend. I did run a couple of preliminary numbers and I believe the added production by the end of the year will compensate +/- for the lower Oil price and i3e should have no problem maintaining the dividend at current levels

Obviously the decline in Oil Prices as well as SP is a concern, but at $78 WTI - i3e is still spinning off a lot of cash. I can remember how bullish this board was back in January when the Oil Price was in the 60's trying to break into the 70's - were now at $78 !

I'm still seeing from various market commentators that demand is reasonably strong and supply remains constrained with stock piles continue to decline. The general consensus appears to be that the current weakness in oil prices is down to the financial demand rather than the physical demand and physical demand will win out in then end.

I'm currently betting that the dividend will remain in tact and I can afford to wait out the current weakness - I could be wrong - just my opinion and investors should obviously make their own assessment.

I would be interested to hear GGG's thoughts about the current oil price as probably the biggest investor on here - is he sweating yet ?

https://1drv.ms/b/s!AoSqKfvcR4IMgYMpm4SybyoGgIFwqA?e=wOX7V3

As per the report -https://www.westwoodenergy.com/news/infographics/global-subsea-tree-tracker there are three primary uncertainties that they need to confirm / resolve in order to prove up / delineate the field:

1) Oil Water Contact (OWC). i3e did not encounter water in the discovery well and the OWC was determined via calculation. i3e have postulated a common OWC for all 3 cases based on modelling and observations from the blake & tain wells etc. Tracs have calculated shallower OWC based on uncertainties in the calculation. This is a primary reason for differences in the STOIIP estimations.

2) Confirmation of Sand Thickness and quality

3) Extension of the trapping structure west and the Oil Column thickness- there's no guarantee that they find oil in the new location though obviously i3e and EOG think this unlikely.

I did ask a Petroleum Engineer how he reconciled the CPR with the Company's bullish comments - his response was that CEO's tended to be bullish whereas Reserve Auditors tend to be more Conservative.

Personally - with the amount of data the Company have, the number of Companies that have reviewed it in the data room and the fact that EOG have staked a significant portion of their MC on this drill makes me reasonably confident of success - but this is more a gut feel as I'm not an expert.

So if anyone says this is a no brainer no lose situation - vet the data yourself and make your own mind up - its your money !

"Tony, you also posted this on the EOG board today, is it wrong are you not suggestion production from serenity whatever the outcome will still go ahead or am I reading too much into this:

You've quoted me correctly but drawn the wrong conclusion - I in no way said production would proceed at Serenity regardless of the outcome of the Appraisal well - I dont believe I3e have said this - why would I. You seem to have been suggesting it and this is why I think you are wrong:

From Page 103 of the Competent Persons Report (Tracs) - numbers are mmbbl of STOIIP

-------------------Tracs----i3e------Case
Low--------------16-------109-----P90
Mid---------------42-------190-----P50
High-------------240------273-----P10

You'll notice that i3e are considerably more optimistic than the Independent Reserves Auditor particularly in the low and mid case. Who's right and who's wrong ?

From Page 110 of the CPR (Tracs calculation of Contingent RESOURCES)

--------------STOIIP--------RF-----------Gross Resources
Low------------16----------15%----------2.4--------(1C)
Mid-------------42----------39%---------16.2-------(2C)
High------------240--------48%---------115.2------(3C)

So a couple of things to note:
1) No proven Reserves yet - all Contingent resources( which you might expect as this is an appraisal well intended to delineate and prove up reserves)
2) In the low case 2.4 mmbbl (0.6mmbbl net to EOG) - this I suspect is insufficient to support a development.
3) The mid case usually considered the "Best Case" or most likely - estimates 16.2mm bbl of Contingent resources - see definition of Contingent Resources below.
4) High case of 115.2 mmbbl of 3 C resources

Contingent Resources are those quantities of petroleum estimated, as of a given date, to be
potentially recoverable from known accumulations, by the application of development project(s)
not currently considered to be commercial owing to one or more contingencies.

Isdeer - "Tony, you also posted this on the EOG board today, is it wrong are you not suggestion production from serenity whatever the outcome will still go ahead or am I reading too much into this."

I know facts and figures are not your thing - but you did ask and so I will bother and counter some of your blatant ramping with some "facts and figures" - if you don't mind. If there's two things that burn my ass - one is sitting on top of a flare stack - the other is a blatant ramper trying to mislead fellow investors.

From the Broker Note (Tennyson):

"We have set our target price at our risked Core NAV of 7.8p/shr"

You will have noted that out of the 7.8p - 5.4p is attributed to Serenity valuing the remainder of EOG's Core Assets at 2.4p

Comparing to Tennysons valuation report for i3e - they exclude Serenity from the core valuation and include only the Canadian producing and 2P reserves which they value at about 50p. As a reference i3e trade at 23p or less than 50% of the brokers estimate . So I would be asking myself is 2.4p a realistic estimate for Wressle of is a more realistic value 1.2p ?

I'll get to you questions on Serenity in a little while - just got to finish watching episode 6, Season 3 of the Crown.