I3 Energy Regulatory News (I3E)

14 October 2020

i3 Energy plc

("i3" or the "Company")

Publication of Admission Document & Notice of General Meeting

Acquisition of Toscana Energy Income Corporation

The Company is pleased to announce that it has posted an Admission Document containing a Notice of General Meeting (the "Admission Document") to its shareholders in relation to the reverse takeover of Toscana Energy Income Corporation (the "Toscana Acquisition").

The Admission Document is also being made available on the Company's website: https://i3.energy/

Acquisition of Toscana Energy Income Corporation

As announced by the Company on 23 June 2020, i3 has agreed to acquire all of the issued and outstanding common shares of Toscana Energy Income Corporation ("Toscana" or "TEIC"), a TSX-listed oil and gas company with identifier TSX:TEI.

As announced on 30 March 2020, i3 has purchased the rights and interests in Toscana's CAD$24.8 million senior debt facility and CAD$3.2 million junior debt facility for a total consideration of CAD$3.0 million and CAD$0.4 million, respectively, with the cash consideration being paid 50 per cent. up front and 50 per cent. at 31 December 2020. As at 23 June 2020, the aggregate consideration being paid by i3 for Toscana's debt and equity totals approximately CAD$3.85 million (c.US$2.83 million) and, in light of TEIC's 2019 production and reserves, represents approximately 0.7x Toscana's 2019 Field Netback (revenue minus royalties, opex and transportation) of CAD$5.5 million (c.US$4 million), CAD$3,618/boepd (c.US$2,661/boepd), or CAD$0.83/boe (c.US$0.61/boe). Summaries of the finance documents pursuant to which i3 acquired Toscana's senior and junior debt facilities are set out in paragraph 12.10 of Part IX of the Admission Document.

The Toscana Acquisition is to be consummated via a plan of arrangement, the terms of which have been agreed between i3 and Toscana in an arrangement agreement dated 23 June 2020 (the "Arrangement Agreement"). Under the terms of the Arrangement Agreement, the consideration payable by i3 for all of the issued and outstanding common shares of TEIC will be wholly satisfied by the issue by i3 of 4,399,224 fully paid ordinary shares of £0.0001 each in the capital of the Company ("Ordinary Shares"), which represent 0.63 per cent. of the existing Ordinary Shares in issue and 0.63 per cent. of the enlarged share capital of the Company following the completion of the Toscana Acquisition.

Due to its size and nature, when it was announced on 23 June 2020, the Toscana Acquisition constitutes a reverse takeover of the Company pursuant to the AIM Rules for Companies. As a result, the Toscana Acquisition requires to be approved by i3 Shareholders by way of an ordinary resolution at a general meeting of the Company to be held at 11 Abercrombie Court, Prospect Road, Arnhall Business Park, Westhill, Aberdeenshire, AB32 6FE on 29 October 2020 at 10:00 am, formal notice of which is set out in Part X of the Admission Document (the "General Meeting").

Should the Toscana Acquisition complete:

· i3's Ordinary Shares will be listed on the TSX (in addition to AIM), subject to the approval of the TSX; and

· subject to regulatory due diligence, a current member of the TEIC board, John Festival, will join the board of i3 as a non-executive director. John is a chemical engineer with over 35 years of experience in the Western Canadian Sedimentary Basin's oil and gas sector and has an excellent track record of founding, growing and monetising oil and gas ventures in Canada. He is currently the CEO of Broadview Energy and was the President and CEO of Black Pearl Resources Inc. prior to its acquisition by International Petroleum in December 2018 in a stock and debt transaction valued at CAD$715 million. He was previously the founder and President of BlackRock Ventures Inc., which was established in 2001 and sold to Shell Canada for CAD$2.4 billion in 2006.

Completion of the Toscana Acquisition is also conditional upon, inter alia: (i) at least 66 2/3 per cent. of the votes cast by TEIC's shareholders being voted in favour of the arrangement at a general meeting; (ii) the approval of the Court of Queen's Bench of Alberta, Canada; (iii) the receipt of certain regulatory approvals; and (iv) the satisfaction of certain other closing conditions customary in acquisitions of this nature. If such conditions are not satisfied, or, where applicable, not waived, the Toscana Acquisition will not proceed.

Shareholders should note that the Toscana Acquisition will not occur if the resolution is not passed at the General Meeting.

The Admission Document contains detailed information about the Company and the Toscana Acquisition, and explains why the Directors consider the Toscana Acquisition and the re-admission of the entire issued and to be issued ordinary share capital of the Company to AIM ("Admission") to be in the best interests of the Company and its Shareholders. The Directors recommend that you vote in favour of the resolution to be proposed at the General Meeting, further details of which can be found in the Notice of General Meeting in the Admission Document.

Background to the Company

i3 is an independent oil and gas company with assets and operations in the UK and Canada. The Company's UK operations are managed by its wholly owned subsidiary, i3 Energy North Sea Limited. Its strategy is to focus on the development of discoveries located close to existing infrastructure and delineation appraisal drilling of prior discoveries to the point of development readiness. The Company's intent is to maintain a limited level of exploration exposure.

On 3 September 2020, i3 completed a transaction to acquire oil and gas assets from Gain Energy Ltd. The assets are located in Alberta, Canada. In Q4 2019, the Gain Assets (as defined in the Admission Document) produced on average 9,509 boepd (40 per cent. liquids) to which GLJ Ltd. ("GLJ"), an independent reserves evaluator, had attributed PDP reserves of 21.5 MMboe with a before-tax NPV10 of US$118 million, and 2P reserves of 61.3 MMboe with a before-tax NPV10 of US$307 million. As part of i3's re-admission process for the Gain Transaction (as defined in the Admission Document) (and to reflect the change in the oil price environment since December 2019), i3 commissioned GLJ to update the reserves associated with the Gain Assets. As at 30 June 2020, the updated reserves of the Gain Assets were 18.4 MMboe PDP with a before-tax NPV10 of c.US$56.5 million and 2P reserves of 53.8 MMboe with a before-tax NPV10 of c.US$182 million. In 2019, the Gain Assets produced c.US$22 million in field EBITDA from 242 Gain-operated wells at an average working interest of 78 per cent. and 1,044 non-operated wells at an average working interest of 14 per cent., and included 172k net developed acres and 186k net undeveloped acres of land.

Summary information on Toscana

Toscana is a public company listed on the TSX in Canada and is engaged in the acquisition, development and production of petroleum and natural gas reserves in Western Canada. Toscana targets operating and non-operating working interest investments in the oil and natural gas sector with reserve life indexes of more than eight years. Toscana is run by a proven management team with strong relationships and access to deal flow that allow the team to select only investments that meet its strict criteria.

Toscana maintains a strong asset base, primarily comprised of properties that are mature, with low declines and, as a result, have long-life reserves. Toscana has been focusing on its oil and NGL weighted properties, which currently provide for better operating netbacks, whilst managing its natural gas assets in a low natural gas price environment. On 20 November 2013, Toscana received approval from the TSX to list its shares and certain securities on the TSX. Those shares and securities commenced trading on the TSX effective 22 November 2013 under the ticker symbol "TEI" and "TEI.DB", respectively.

The head office of Toscana is located at 46th Floor, Bankers Hall, West Tower, 833 3rd Street S.W., Calgary, Alberta, T2P 5C5 and the registered office of Toscana is located at 400 - 3rd Avenue S.W., Calgary, Alberta, T2P 4H2.

Toscana had 2019 year-end 2P Reserves of 4.65 MMboe (45.2 per cent. gas, 54.8 per cent. liquids) with a reserve life index of 14.7 years and average 2019 production of 1,065 boepd which generated CAD$5.5 million (c.US$4 million) in Field Netback across its total of 121 wells from 12 low-decline, long-life conventional fields producing at an average break-even price of CAD$30.43/boe (c.US$22.38/boe). TEIC operates 62 per cent. of the producing wells in its portfolio at an average net working interest of 67 per cent. At 30 June 2020, 2P reserves were 3.98 MMboe (46 per cent. gas, 54 per cent liquids). Importantly, TEIC has accumulated tax pools of c.CAD$128 million (US$94 million), which will benefit cash flows from the Gain Assets. Toscana has one wholly-owned subsidiary, Firenze Energy Ltd.

Notice of General Meeting

The Admission Document contains detailed information about the Company and the Toscana Acquisition, and explains why the Directors consider the Toscana Acquisition and Admission to be in the best interests of the Company and its Shareholders.

The General Meeting is to be held at 11 Abercrombie Court, Prospect Road, Arnhall Business Park, Westhill, Aberdeenshire, AB32 6FE on 29 October 2020 at 10:00 am. Under the UK Government's current recommendations with regards to public gatherings, it will not be possible for all shareholders to attend the General Meeting in person. The Company therefore strongly encourages Shareholders to vote on the Resolution by completing an online proxy appointment form appointing the Chairman of the meeting as their proxy, to register any questions in advance by emailing those to i3energy@camarco.co.uk and not to attend the meeting in person. Further details of the General Meeting can be found in the Notice of General Meeting in the Admission Document.

ENDS

Qualified Person's Statement

In accordance with the AIM Note for Mining and Oil and Gas Companies, i3 discloses that Mihai Butuc, i3's New Ventures Manager, is the qualified person who has reviewed the technical information contained in this document. He graduated as a Diplomat Engineer, Geology and Geophysics from the University of Bucharest in 1985 and is a member of the Society of Petroleum Engineers. Mihai Butuc consents to the inclusion of the information in the form and context in which it appears.

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