i3 Acquires Cenovus Assets in Central Alberta to Expand WCSB Footprint
LSE-listed i3 Energy Plc has entered into an asset sale agreement with integrated oil & gas company Cenovus Energy Inc. to acquire approximately 212,000 net acres of oil and gas properties and associated infrastructure located in Central Alberta, in exchange for a cash consideration of C$65 million (~US$53.7 million). The acquired assets complement i3 Energy’s existing area assets and delivers extensive operational synergies, predictable low-decline production, a large reserve base with multi-year development inventory, and expected strong free cash flow.
The acquired acreage contains 722 gross (407 net) producing wells as well as 143 net drilling locations and 80 net reactivation opportunities. As of June 1st, 2021, total proved (1P) reserves attributable to the assets were 27.5 million barrels of oil equivalent (MMboe), and total proved plus probable (2P) reserves were 79.5 MMboe. Average daily production attributable to the acreage is expected to be approximately 8,400 barrels of oil equivalent per day (boe/d) over the next twelve months.
“We continue to execute on our business plan which is to build and grow a material and diversified production business through the most efficient deployment of capital, whether that is through exploitation of opportunities within the Company’s existing portfolio or through accretive acquisitions such as this one. This transaction not only scales up our cashflow, but it will also, in the near term, lower our unit operating costs, increase third party tariff income and add scale to i3’s expanding list of varied development opportunities, which will materially increase our options to both grow the business and manage risks,” commented Majid Shafiq, CEO of i3 Energy.
Headquartered in Westhill, Scotland, i3 Energy is primarily engaged in operations in the UK North Sea, with a focus on the development of the Liberator oil field located in license P1987 (Blocks 13/23c and 13/23d). In June 2020, the company made its first foray into Canada and acquired assets in the Western Canadian Sedimentary Basin through a reverse takeover of private company Gain Energy Ltd.
The transaction is subject to normal interim period adjustments and standard regulatory approvals, and has an effective date of April 1st, 2021.