i3 Energy (I3E) , a UK and Canada focused oil producer, released unaudited results for the 6 months to 30 June 2023 (H1 2023).
Revenues in H1 2023 came in at £75.5m from £101.6m a year ago, and net operation income stood at £38.9m from £68.8m in H1 2022. Cashflow from operations was £24.3m, compared to £48.4m last year. i3 Energy successfully restructured its debt through a new CAD 100m loan facility with Trafigura Canada.
The oil producer declared total dividends of 0.855p/share in H1 2022, totalling £10.215m. In June 2023, i3 Energy revised its annual dividend guidance from a monthly 0.171p to a quarterly 0.0855p, which annualises to approx. £12.3m.
Operationally, i3 saw average H1 2023 production of 20,640 barrels of oil equivalent per day (boepd) for the 6-month period, 9% higher than the 18,950 boepd achieved in H1 2022, while exiting H1 2023 above 22,000 boepd. i3 drilled 8 gross wells (5.5 net) in H1 in its core Central Alberta, Wapiti, and Clearwater assets as part of its 2023 capital programme.
As a result of wildfires in Alberta, certain i3 Energy facilities were periodically shut-in with resultant calendar day downtime estimated at 1,650 boepd and 385 boepd, respectively for May and June. However, after these May/June curtailments, production surged with a July average rate of 22,065 boepd.
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While i3 Energy's Q2 2023 was negatively impacted by a number of external factors, including commodity price weakness, Alberta wildfires, apportionment issues, and scheduled turnarounds and debottlenecking projects, production held steady at only 5% lower year-on-year in Q2. This was followed by a strong recovery in July resulting in a 9% year-on-year production increase in H1 with strong momentum into H2 at over 22,000 boepd at the beginning of August, and with 2P reserves of 182 mmboe providing a solid platform for growth.
Overall, H1 was a busy period for i3 Energy as it completed its Q1 capital programme including 8 gross (5.5 net) new wells in its Central Alberta, Wapiti and Clearwater acreage, 20 facility turnarounds, and a refinancing of its outstanding debt with a new CAD 100m facility from Trafigura Canada, providing working capital for further expansion.
Commodity price weakness and other abovementioned factors in H1 meant i3 Energy revised down its 2023 capital and dividend programme. However, improving commodity prices and futures in July and August prompted the oil producer to up its full-year net operating income forecast by c. 20% to US$90-95m. Investors reacted positively to the news, driving I3E shares 10.1% higher as of time of writing. i3 Energy also said commodity price volatility has yielded more M&A opportunities, and that it continues to "monitor the market to ensure our capital allocation for the remainder of the year is optimised."
Overall, despite production hurdles in H1 2023, i3 Energy is continuing on its growth trajectory through aggressive development and expansion of its asset base, aided by a newly secured CAD 100m loan facility.
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