I3 Energy Regulatory News (I3E)

17 April 2024

i3 Energy plc

("i3", "i3 Energy", or the "Company")

Partial Sale of the Company's Royalty Assets and Elimination of All Bank Indebtedness

i3 Energy plc (AIM:I3E) (TSX:ITE), an independent oil and gas company with assets and operations in the UK and Canada, is pleased to announce that its subsidiary, i3 Energy Canada Ltd., has entered into a definitive agreement with a newly formed private royalty company for the sale of certain of the Company's royalty assets (the "Royalty Disposition") for a total gross cash consideration of USD 24.81 million (CAD 33.50 million(1)) before customary closing adjustments. The proceeds of the Royalty Disposition mark the next step in transitioning i3's capital structure, enhancing the Company's financial flexibility through improved liquidity and enabling acceleration of its growth and income-based business plan.

Highlights:

· Accelerating and Unlocking Value: Realization of USD 24.81 million in gross proceeds from the sale of an estimated 388 barrels of oil equivalent per day ("boe/d")(2), translates to 6.9 times 2024 forecasted cash flow and approximately USD 63,960 per flowing boe/d, which represents a significant premium to the Company's current market valuations.

· Pro Forma Financial Position Upon Closing: The proceeds of the Royalty Disposition will fully eliminate i3's outstanding bank indebtedness and establish a working capital surplus(4) without materially impacting its working interest production base; which, together with forecasted cash flows and undrawn credit facility, provides the Company with significant liquidity to execute its growth and income strategies.

· Retained Key Royalty Position at Greater Simonette: As part of i3's high-impact Montney oil asset at Simonette, the Company has retained its 16,160 acre royalty position, along with approximately 35 boe/d of associated production(3) (collectively the "Simonette Royalty"), throughout this core area.

Ryan Heath, President of i3 Energy Canada Ltd., commented:

"i3 Energy Canada Ltd. is extremely pleased to have closed this complex accretive transaction with a newly minted private Canadian royalty company. Proceeds from the Royalty Disposition advantageously position the Company to fully eliminate its bank debt and create a working capital surplus; all while preserving a substantial, low decline, production base exceeding 19,000 boe/d (~48% liquids). The increased liquidity on the Company's balance sheet combined with its stable cash flows, will support both its organic and inorganic initiatives, as we actively look towards a dynamic 2024."

The Royalty Disposition, involving most of the Company's royalty assets, but not its core Simonette Royalty, provides substantial capital and will allow i3 to accelerate value associated with its extensive inventory of high-return drilling locations, while jointly pursuing accretive inorganic growth initiatives.

The Royalty Disposition is comprised of i3 fee royalties, i3 gross overriding royalties, along with certain newly created royalties on a minor subset of previously unburdened lands, and is expected to average 388 boe/d in 2024, while delivering USD 3.61 million in royalty income based on strip pricing (as at 3 April 2024).

The Company now has a fully undrawn USD 55.56 million (CAD 75 million) senior secured revolving credit facility with a Canadian chartered bank and will remain disciplined with its conservative approach to debt management as it looks to balance stable, predictable, growth, along with its ongoing dividend programme. The Company now looks forward to updating the market later this month with its capital programme for 2024.

Norton Rose Fulbright Canada acted as legal counsel to i3 in relation to the Royalty Disposition.

(1) Unless otherwise denoted, all figures are referenced in USD ($) and assume a foreign exchange rate of 1.35 CAD:USD

(2) Production numbers reflect the Company's 2024 average

(3) Production numbers reflect the Company's December 2023 average

(4) Non-IFRS measure, refer to 'Non-IFRS Financial Measures'

END

Enquiries:

Notes to Editors:

i3 Energy is an oil and gas Company with a low cost, diversified, growing production base in Canada's most prolific hydrocarbon region, the Western Canadian Sedimentary Basin and appraisal assets in the North Sea with significant upside.

The Company is well positioned to deliver future growth through the optimisation of its existing asset base and the acquisition of long life, low decline conventional production assets.

i3 is dedicated to responsible corporate practices and the environment, and places high value on adhering to strong Environmental, Social and Governance ("ESG") practices.  i3 is proud of its performance to date as a responsible steward of the environment, people, and capital management.  The Company is committed to maintaining an ESG strategy, which has broader implications to long-term value creation, as these benefits extend beyond regulatory requirements.

i3 Energy is listed on the AIM market of the London Stock Exchange under the symbol I3E and on the Toronto Stock Exchange under the symbol ITE. For further information on i3 Energy please visit https://i3.energy.

This announcement contains inside information for the purposes of Article 7 of the UK version of Regulation (EU) No 596/2014 which is part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"). Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.

Forward-Looking Statements

This press release offers our assessment of i3's future plans and operations as at April 17, 2024, and contains certain forward-looking information and statements within the meaning of applicable securities laws. The use of any of the words "anticipate", "continue", "estimate", "expect", "forecast", "may", "will", "project", "should", "plan", "intend", "believe" and similar expressions (including the negatives thereof) are intended to identify forward looking information or statements.

The forward-looking information and statements included in this news release are not guarantees of future performance and should not be unduly relied upon. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements including, without limitation: those relating to results of operations and financial condition; general economic conditions; industry conditions; changes in regulatory and taxation regimes; volatility of commodity prices; escalation of operating and capital costs; currency fluctuations; the availability of services; imprecision of reserve estimates; geological, technical, drilling and processing problems; environmental risks; weather; the lack of availability of qualified personnel or management; stock market volatility; the ability to access sufficient capital from internal and external sources; and competition from other industry participants for, among other things, capital, services, acquisitions of reserves, undeveloped lands and skilled personnel. Risks are described in more detail in our Financial Review, which is available on www.i3.energy and on www.sedar.com. Forward-looking statements are provided to allow investors to have a greater understanding of our business.

You are cautioned that the assumptions used in the preparation of such information and statements, including, among other things: future oil and natural gas prices; future capital expenditure levels; future production levels; future exchange rates; the cost of developing and expanding our assets; our ability to obtain equipment in a timely manner to carry out development activities; our ability to market our oil and natural gas successfully to current and new customers; the impact of increasing competition; the availability of adequate and acceptable debt and equity financing and funds from operations to fund our planned expenditures; and our ability to add production and reserves through our development and acquisition activities, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. Our actual results, performance, or achievement could differ materially from those expressed in, or implied by, these forward-looking statements. We can give no assurance that any of the events anticipated will transpire or occur, or if any of them do, what benefits we will derive from them. The forward-looking information and statements contained in this document is expressly qualified by this cautionary statement. Our policy for updating forward-looking statements is that i3 disclaims, except as required by law, any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-IFRS Financial Measures

i3 uses the following terms for measurement within this press release that do not have a standardized prescribed meaning under International Financial Reporting Standards ("IFRS") and these measurements may not be comparable with the calculation of similar measurements of other entities. The Company refers to these as Non-IFRS Measures or Alternate Performance Measures ("APMs"). APMs are not defined under IFRS and are not considered to be a substitute for or superior to IFRS measures. Other companies may not calculate similarly defined or described measures, and therefore their comparability may be limited. The Company continually monitors the selection and definitions of its APMs, which may change in future reporting periods.

The term "working capital surplus" in this press release is not a recognised measure under IFRS. i3 refers to working capital surplus as "Net Debt" in other public filings, which is defined as borrowings and leases, trade and other payables, other non-current liabilities, and incomes taxes receivable/payable, less cash and cash equivalents and trade and other receivables. Management of i3 believes that that Net Debt is a meaningful measure to monitor the liquidity position of the i3 Energy Group.

See i3's Interim Report and Annual Report and Consolidated Financial Statements as filed on www.i3.energy and on www.sedar.com for the periods ended 30 June 2023 and 31 December 2022, respectively, for a discussion of Net Debt.

51-101 Advisory

In conformity with National Instrument 51-101, Standards for Disclosure of Oil and Gas Activities ("NI 51-101"), natural gas volumes have been converted to barrels of oil equivalent ("boe") using a conversion rate of six thousand cubic feet of natural gas to one barrel of oil. In certain circumstances, natural gas liquid volumes have been converted to a thousand cubic feet equivalent ("mcfe") on the basis of one barrel of natural gas liquids to six thousand cubic feet of gas. Boes and mcfes may be misleading, particularly if used in isolation. A conversion ratio of one barrel to six thousand cubic feet of natural gas is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion ratio on a 6:1 basis may be misleading as an indication of value.