[source: I3 Energy]
I3 Energy (I3E ) has achieved record production levels with current production expected to exceed expectations due to continual outperformance of i3’s low decline production base.
The independent oil and gas company which holds assets in Canada and the UK exited the first quarter of 2022 with a record weekly average production of approximately 20,312 boepd.
This comprised 61.1m standard cubic feet of gas per day, 6,290 barrels per day of natural gas liquids 3,522 bbl/d of oil as well as 316 boepd of gross overriding royalty interest production.
The Company said current production continues to exceed expectations due to continual outperformance of the Company’s low decline production base, which has been further enhanced through strong drilling results via i3's inaugural development drilling program.
Based on forward strip pricing at 31 March 2022, i3 now forecasts FY22 net operating income (“NOI” = revenue minus royalties, opex, transportation and processing) of $192 million, a 28% increase over that predicted in the Company’s December 2021 capital budget announcement.
The Company highlighted to investors that this increase reflects the upward shift in commodity prices, in addition to well results that have bettered i3's pre-drill forecasts.
In addition, Majid Shafiq, CEO of i3 Energy said the company’s 2021 year-end reserves report for its subsidiary i3 Energy Canada has encapsulated “a very successful year” for i3 Energy.
I3 said it has “significantly increased” its reserve base in 2021 through acquisitions and operational activity, with its 2P reserves valued at $775m or £0.52 per share at year-end. On a proven reserves basis, i3’s organic reserves replacement ratio in 2021 was 220%.
While proved plus probable developed producing reserves increased 262% to 60.1 million boe, total proved (“1P”) reserves increased 163% to 85.3 million boe and total proved plus probable (“2P”) reserves increased 185% to 154.1 million boe, compared to the prior year.
The pre-tax net present value of cash flows attributable to i3’s reserves has been determined to be $354mm, $444mm, and $775mm for its P50 PDP, 1P and 2P reserves, respectively. I3 said this indicates a strong production base and a robust portfolio of economic opportunities.
The Group said a total reserve life index of 9.5 years, 11.8 years and 18.6 years, respectively, combined with a low base decline rate of around 12.4% and an extensive inventory of highly economic development drilling locations, underpins its ability to sustainably grow production.
Commenting this morning, Ryan Heath, President of i3 Energy Canada Ltd., told investors: “The Canadian reserve report reflects the hard work and commitment of the entire i3 team. Strategic, accretive acquisitions along with efficient, low-cost field optimization has built predictable base production and a portfolio with extensive future development opportunities.
Shafiq said I3’s organic reserves replacement ratio of 200% “demonstrates the quality of our assets and operational capability to replace production from our existing asset base and with a 2P reserves life index of almost 19 years and multiple drilling opportunities, we have a portfolio ideally suited to deliver a consistent and progressive dividend and value growth.”
He added: “We are very pleased to exit the last quarter at over 20,000 boepd and look forward to updating the market with results from our currently active drilling program.”
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