i3 Energy (,I3E), a UK and Canada-focused driller, reported its results for the year ended 31 December 2022, with revenues surging 140% in the period, alongside detailing four quarters of production growth, highlighting the efficiency of its 2022 drilling programme.
Revenues increased from £86.8 million in 2021 to £208.4 million in 2022, while adjusted EBITDA increased 224% to £98 million. Following a solid financial performance and carefully managed cash expenditure, i3 had a period end-cash balance of £16.6 million.
In 2022, i3 delivered 31 gross (20.1 net) wells, increasing the company’s leasehold position to 628,000 net acres. Aggregate well productivity met or exceeded management expectation and key wells drilled in strategic Simonette and Clearwater acreage.
I3’s 2022 capital program helped to increase 2P reserves by 18% to 182 million barrels of oil equivalent, resulting in reserves replacement of 479% on a 2P basis.
The company also detailed it’s ESG performance, eliminating all high-bleed pressure controllers and commenced installation of solar powered pumps. These initiatives when complete are set to eliminate 71,450 tonnes CO2e methane emissions. I3 also said it completed the electrification of 7 pumpjacks in Carmangay and Retlaw.
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I3’s operational successes across 2022 have translated into a meteoric rise in oil and gas sales, as the company pivoted from growth via acquisitions to organic growth.
In January 2022, i3 commenced its inaugural operated drilling program in Canada with an announced US$47 million budget. After positive results of the wells drilled in the first quarter, coupled with a strong operational performance and the forecasted strength of commodity prices, i3 expanded its program in May with an additional US$50 million of capital. This was forecast to provide peak production above 24,000 boepd by year end, with i3 meeting this target. This increased production, teamed with a strengthened balance sheet and growing cashflow all point to i3’s fundamental value delivery.
For the remainder of the year, i3 is set to perform well in 2H 2023, as oil prices are predicted to rise, with some estimates saying demand will eclipse supply by around 2 mb/d. When oil prices stabilise or rise, this should cause the market to recognise the value in i3s ongoing operational success.
Looking forward, i3 looks forward to executing a successful drilling program in Canada in 2023, growing production and returning cash to shareholders and so delivering on its total shareholder return model. Looking beyond 2023, i3 has a high-quality and diverse asset portfolio with immense unrealised upside potential.
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