i3 Energy Secures C$75 Million Refinancing to Fuel Growth Strategy
TL;DR
i3 Energy PLC secures C$75 million RBL facility, reducing interest costs and freeing up $25 million Canadian annually for reinvestment, providing a significant financial advantage.
The RBL facility is secured against Canadian reserves and assets, offering a slightly better interest rate, with an option to index the rate to the Canadian prime rate.
The refinancing allows i3 Energy to reinvest $25 million Canadian annually into the business, enhancing liquidity for growth initiatives and potential mergers and acquisitions, contributing to future sustainability.
i3 Energy's 2023 reserves update reveals stable reserves despite production, with 93 million barrels 1P and 180 million barrels 2P, highlighting the quality of its assets and efficient management.
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i3 Energy PLC has successfully secured a C$75 million reserve-based lending facility that represents a strategic refinancing of its Canadian operations, providing enhanced financial flexibility and positioning the company for future growth. The new arrangement offers improved terms compared to the previous loan structure, including a slightly better interest rate that is expected to become even more favorable as central bank interest rates decline. This refinancing has effectively freed up C$25 million annually that was previously allocated to amortizing the existing loan, creating significant additional capital for reinvestment in the business.
Chief Executive Majid Shafiq emphasized the strategic importance of partnering with a Canadian banking institution, noting their deep understanding of the Canadian oil and gas sector and their capability to accurately assess risk in this specialized market. This banking relationship is viewed as crucial not only for the immediate refinancing benefits but also for accessing development capital to support both organic growth initiatives and potential mergers and acquisitions activity. The company's deliberate choice to work with a major Canadian bank reflects a strategic approach to building long-term financial partnerships that can support i3 Energy's expansion objectives in the Canadian energy market.
Complementing the refinancing announcement, i3 Energy's 2023 reserves update demonstrates remarkable stability in its asset base despite ongoing production activities. The company reported reserves of 93 million barrels on a 1P basis and 180 million barrels on a 2P basis, maintaining these levels with minimal capital expenditure in a challenging environment of low gas prices. Shafiq highlighted that this reserves stability underscores both the quality of i3 Energy's asset portfolio and the efficiency of its management approach. The company maintains a low production decline rate and benefits from a diverse portfolio that provides operational flexibility to respond effectively to commodity price fluctuations.
Looking forward, i3 Energy plans to deploy its enhanced liquidity position to accelerate growth initiatives and will provide market updates on its capital program as development plans are finalized. The strategic relationship with its Canadian banking partner is expected to provide significant flexibility and multiple options for executing the company's growth strategy, positioning i3 Energy to capitalize on opportunities in the evolving energy landscape while maintaining financial stability and operational efficiency.
Curated from News Direct
