I3 Energy Regulatory News (I3E)

6 February 2018

i3 Energy plc

("i3" or the "Company")

Amended Loan Note Terms

i3 Energy plc, an independent oil and gas company with assets and operations in the UK is pleased to announce it has entered into an agreement to amend the terms of the existing loan notes (the "Existing Loan Notes") subscribed by James Caird Asset Management (the "Noteholder"). As previously set out in the Company's IPO Admission Document, the Loan Notes are for the amount of US$2,500,000 and are automatically convertible into new ordinary shares if the Company raises at least $20million of new equity post IPO (a "Relevant Fundraising"). The conversion price in the event of a Relevant Fundraising is the lower of: (i) 75% of the subscription price paid per Ordinary Share pursuant to the Relevant Fundraising or: (ii) 54 cents per Ordinary Share (approx. 39p at the current exchange rate).

The amended loan note instrument supercedes the existing loan note instrument dated 17 July 2017 and the principal amendments to the Existing Loan Notes are as follows:

· Under the Existing Loan Notes, the Company may not: (i) incur any borrowings exceeding US$4,950,000; or (ii) create, or permit to subsist, any security without the consent of the Noteholder. The former of these has been removed in the amended loan note instrument, and the latter has been amended such that "security" for the purposes of the undertaking shall not include any security granted for the purpose of securing any obligation of the Company in relation to any financing or borrowing provided to the Company to fund the development of its oil and gas assets. These amendments and relaxation of these provisions provides the Company with greater flexibility to negotiate terms for the potential joint venture and other financing arrangements currently under discussion. 

· Where an equity fundraising by the Company raises less than US$20 million of new money, the Noteholder shall be entitled to convert a pro-rata proportion of the amended Loan Notes (such that, for the avoidance of doubt, if a fundraising raises US$15 million, the Noteholder would be entitled to convert 75% of the amended Loan Notes) at a conversion price per Ordinary Share equal to 75% of the subscription price per Ordinary Share pursuant to such fundraising. 

· In the event that the Company serves notice on the Noteholder of its intention to redeem the amended Loan Notes in cash, the Noteholder has the right to elect for all of the amended Loan Notes to instead convert into Ordinary Shares at a conversion price per Ordinary Share equal to the volume weighted average price of the Ordinary Shares over the five business days immediately preceding the date on which the redemption notice is served by the Company.  

· The maturity date of the Loan Notes is 18 August 2018 (as per the Existing Loan Notes).

Pursuant to the foregoing amendments, following completion of the Company's recent placing of new Ordinary Shares raising £2.57m, the Noteholder becomes entitled to convert US$451,614 of the amended Loan Notes into 1,427,271 new Ordinary Shares at a price per new Ordinary Share of US$0.3164 (being 75% of the subscription price per new Ordinary Share under the Company's recent placing of new Ordinary Shares raising £2.57m, and using an exchange rate of GBP1:US$1.4063). The Company will additionally convert c.US$48,386 of the amended Loan Notes at US$0.54 per Ordinary Share (approx. 39p at the current exchange rate), bringing the total resulting converted shares to 1,516,876 (the "Conversion Shares"). The outstanding value of the Loan Notes post this conversion will be US$2,000,000.

The directors of the Company intend to call a general meeting of the Company within the next few days (such meeting to take place on or around the end of February) seeking, among other things, authority from shareholders to issue the Conversion Shares.

ENDS

CONTACT DETAILS:

Notes to Editors:

i3 is an oil and gas development company initially focused on the North Sea. The Company's core asset is the Liberator oil field discovered by well 13/23d-8 located in License P.1987, Block 13/23d in which it has a 100% operated interest.

The Company's strategy is to acquire high quality, low risk producing and development assets, to broaden its portfolio and grow its reserves and production.

i3 has a strong management team with a track record of delivery and was founded by Neill Carson, previously founder and CEO of Ithaca Energy, where he built an asset portfolio including multiple developments.

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.