The independent oil and gas company i3 Energy (I3E ) has reported average production in 4Q21 at around 18,229 barrels of oil equivalent per day (“boepd”), a 38% increase from 3Q.

I3 Energy said 4Q production levels include the newly integrated Central Alberta assets which were acquired from Cenovus Energy in 2021. In 4Q, these assets alon averaged 18,229 boepd, up from 13,239 boepd in 3Q, 9,018 boepd in 2Q and 9,173 boepd in 1Q, respectively.

The production estimate for the quarter was comprised of 58 million standard cubic feet of gas per day (“mmscfd”), 5,210 barrels per day (“bbl/d”) of NGLs, 3,015 bbl/d of oil and 331 boepd of gross overriding royalty interest production. The Group noted that 4Q21 production was impacted by the closing of multiple non-core disposals and December’s severe cold weather.

With improved winter conditions and the positive impact of drilling, I3 said current aggregate production averages at around 19,055 boepd for the seven-day period to 12 February 2022. 

I3, which holds assets and operations in the UK and Canada, said the continued performance of its asset base positions the group ‘to meet or exceed management’s production forecasts.’

To increase its focus on its high working interest assets in Central Alberta, Wapiti / Elmworth, Simonette and the Clearwater play, i3 executed multiple non-core disposals during 4Q.

This was with the purpose of ‘reducing its per boe operating costs, decreasing end-of-life obligations, and releasing $0.945m of decommissioning-related bonds to its balance sheet.’

These disposals reduced i3's 4Q production by around 130 boepd from a combined 213 gross (184.5 net) wells and reduced its undiscounted asset retirement obligation by around $9.8m. 

The company outlined to sharedholers this morning that the proceeds from both these and future disposals will be utilised to accelerate growth from its inventory of highly-economic development locations as it remains focused on delivering total shareholder returns.

On 20 December 2021, the Company announced a fully funded 2022 capital budget of $47mm to fund a 12.6 net well operated drilling programme, non-operated drilling, well reactivations, debottlenecking, consolidation, and third-party tariff generating projects

The programme, which is expected to deliver average production in 2022 above 20,000 boepd with peaks reaching 21,000 boepd, started last month, with operated and non-operated wells currently being drilled in i3's Central Alberta, Simonette and Marten Hills acreage.

I3 said early results from ongoing operations have positioned it to achieve or exceed initial management expectations. If this success continues, the Company could expand its 2022 drilling programme to take advantage of operational momentum and the current favourable commodity price environment. i3 added that it is sufficiently funded to be able to do this.

In 4Q21, i3 paid a dividend of £2.25mm, bringing its total 2021 distributions to £3.41m. On 20 December 2021, i3 said it was committed to pay a minimum dividend of £11.827m in 2022.

The first monthly dividend from this sum is expected to be paid on 11 March 2002, it noted.

Majid Shafiq, CEO of i3 Energy, commented: “We are very pleased with the progress we’ve made with the Cenovus assets since acquisition in August 2021. We spent the following months on an extensive integration process to optimise the portfolio and generate a development programme to organically grow our production and income base.”

The execution of these plans in 3Q and 4Q allowed us to replace declines, grow production and enhance margins in an improving commodity price environment. I am pleased to report that this has resulted in significantly improved income projections for the coming year.”

He added: “We entered 2022 with a significant working capital surplus and a disciplined hedging program, covering approximately 36% of forecasted 2022 production, ensuring the fully funded 2022 programme and a monthly dividend commitment. We are also very excited to have commenced our high impact 2022 drilling programme in January and initial results are very promising; we will update the market as we commence production from these new wells.”

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