Corporate M&A

i3 Energy Enters into Option Agreement to Acquire Toscana Energy

By Shriya Bhargava
March 30, 2020
a minute read
Toscana Energy Assets

AIM-listed oil & gas company i3 Energy Plc has entered into an Option Agreement to acquire all of the issued and outstanding common shares of Toscana Energy Income Corp. (TEIC), a TSX-listed company with current portfolio of oil & gas interests in Western Canada. The total aggregate consideration being paid by i3 for TEIC’s debt and equity totals approximately C$3.95 million (US$2.82mm).

Previously, on March 27th, i3 Energy also purchased the rights and interests in TEIC’s senior and junior debt facilities (which were in default), acquiring TEIC’s C$24.8 million senior facility for C$3.0 million and its C$3.2 million junior facility for C$0.4 million, with cash consideration for each being paid 50% up front and 50% at year-end.

TEIC focuses on investing in medium to long-life oil & natural gas assets, unitized production, and royalties for yield and capital appreciation. The company had 2019 year-end 2P Reserves of 4.65 MMboe (53% oil, 47% gas) across its oil & gas interests in Alberta and Saskatchewan. Toscana’s 2019 production averaged 1,065 boepd and generated C$5.5 million (US$3.9mm) in field netback from 13 low-decline, long-life conventional fields.

Upon i3’s exercise of the Option, TEIC shareholders will be offered up to 4,399,224 i3 shares for TEIC’s entire share capital, representing dilution of approximately 4% to i3’s current shareholders and having a market value of approximately C$0.55 million. Following exercise of the Option and on conclusion of the Arrangement Agreement, i3 intends that its enlarged share capital will also be listed on the TSX, satisfying the Company’s obligation under its existing Loan Notes to seek a secondary listing for its shares.

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