i3 Energy Sells Royalty Assets for $25 Million, Eliminates Net Debt

i3 Energy PLC chief executive Majid Shafiq stated that the sale of a portion of the company's royalty assets significantly enhances the company's financial metrics. These assets, described as non-core, consisted of 388 barrels per day of oil equivalent, generating a forecasted $3.6 million in cash flow annually. Despite their low production and cash flow impact, they fetched $25 million. Shafiq highlighted that this sale accelerates value realization, effectively trading less than 2% of last year's production for about 14% of the company's market cap.

The transaction has zeroed i3 Energy's net debt and created a working capital surplus, enabling access to a fully undrawn $75 million Canadian debt facility. The proceeds are earmarked for business growth in Canada, potentially through drilling high-return oil and gas wells or pursuing mergers and acquisitions. This aligns with i3 Energy's strategy of maximizing shareholder value through tactical asset management and sensible acquisition and divestment.

The company retained its royalty position in the strategically valuable Montney position at Simonette, anticipating substantial future gains from its high-potential oil wells. This strategic retention demonstrates i3 Energy's focus on maintaining exposure to high-value assets while divesting non-core holdings to strengthen the company's financial position and fund future growth opportunities in the Canadian energy sector.