i3 Energy Exercises ROFR on Montney Assets
LSE-listed i3 Energy Plc has exercised its right of first refusal (ROFR) to acquire an additional 49.5% operated interest in certain Montney formation assets located in the Simonette area of Alberta (referred to as the South Simonette property) from privately-held Anegada Oil Corp., in exchange for a consideration of US$4.2 million, subject to normal closing adjustments. Upon completion, i3 Energy will hold a 99% operated interest in the assets.
In May, Anegada had executed a purchase and sale agreement (PSA) to sell its 49.5% operated interest in the South Simonette property to an undisclosed third party, which resulted in the activation of the ROFR held by i3 Energy over Anegada’s interest.
The assets acquired include 64 sq. km of Montney formation properties in the Simonette area of Alberta, with three drilled Lower Montney oil wells. One production well produces approximately 317 barrels of oil equivalent per day (boe/d), and the remaining two wells are currently suspended. The acreage has 12 future drilling locations, with the potential for more than 60 additional development drilling locations. i3 Energy plans to bring the two suspended wells back onto production in July 2021, at an estimated expenditure of approximately US$1.16 million. Total proved plus probable (2P) reserves attributable to the acquired interest in the acreage were approximately 4.9 million barrels of oil equivalent (MMboe) as of December 31, 2020, with a current average daily production of approximately 430 boe/d.
“The recent increase in global oil prices has resulted in a significant increase in M&A activity in offsetting Montney acreage, as competitors seek to grow their exposure to this prolific play. In this environment i3 is very pleased to capture a near 100% operated and contiguous working interest in over 120 sq. km. of Montney acreage in Simonette which includes strategically located processing infrastructure,” commented Ryan Heath, President of i3 Energy.
Scotland-based i3 Energy has operations in the UK North Sea, with a primary focus on the development of the Liberator oil field.
Based in Calgary, Anegada Oil is engaged in the exploration, development and production of oil & gas assets in Canada, with a primary focus on the development of the Charlie Lake light oil property in the Peace River High area of Alberta.
The transaction is subject to customary closing conditions, including regulatory approval, and is expected to close in Q2-2021, with an effective date of April 1, 2021.