i3 Energy (I3E) – a UK and Canada focused oil producer - said that production in the second quarter of 2022 more than doubled from a year earlier, averaging 19,502 barrels of oil equivalent per day (boepd).
The oil explorer and producer delivered the 116% increase despite poor weather, production curtailments at a third-party midstream facility, planned maintenance at some of its own facilities and well shut-ins to enable offset-drilling and completion activity in the company's core Montney position at Simonette.
The increase in production was driven by strong operational performance from its first quarter Canadian drilling programme, and with planned maintenance and shut-ins complete, the company exited July with daily production above 20,000 boepd and currently running at 20,500 boepd.
The company also drilled 7 wells in the period, with production testing now underway and the wells expected to begin material production imminently. That leaves it on track to deliver peak 2022 production of 24,000 boepd, which will deliver net operating income of $200m. That's lowered from $241m previously, reflecting volatile near-term commodity pricing and inflationary pressures, but the company continues to forecast robust cash flow and increased the minimum annual dividend to be paid in 2022 by 25% to £14.784 million.
The company also completed the farmout of a 25% working interest in the offshore UK Serenity discovery to Europa Oil and Gas, under which Europa will fund 46.25% of the cost of the appraisal well, up to a gross capped well cost of £15 million. Rig mobilisation for what analysts at SP Angel described as a "company-making resource" is expected in the first half of September.
i3 CEO Majid Shafiq added: “Our expanded drilling campaign in Canada proceeds at pace and preparations for appraisal drilling on the Serenity field in the UK are on track for an expected spud in mid-September. We look forward to providing further updates to the market over the coming weeks.”
i3's shares have risen 132% over the past 12-months