i3 Energy, an independent oil and gas company with assets and operations in the UK and Canada, provides the following operational update on its 2022 Canadian capital programme.

Highlights

Phase one of the Company's US$47 million 2022 Canadian Capital Budget is designed to combine efficient low-risk development drilling with strategic resource delineation and land capture. This includes development of the Company's extensive Glauconitic fairway, expansion of its key Clearwater position and demonstration of its prolific Simonette Montney resource. Phase one of the Capital Budget is well-underway with:

• Seven gross (five net) wells to be drilled across the Company's diversified portfolio in Central Alberta (Mannville liquids-rich gas), Marten Hills & Marten Creek (Clearwater oil) and Simonette (Montney oil), collectively expected to add approximately 2,420 boepd (55% oil and Natural Gas Liquids ("NGLs"))
• A recompletion and reactivation campaign targeting low-cost, high-return opportunities with less than one-year paybacks, estimated to add initial production of 600 boepd (50% oil and NGLs)
• Strategic field operations targeting improved opex, increased netbacks, and the systematic reduction of greenhouse gas ("GHG") emissions  

Majid Shafiq, CEO of i3 Energy plc, commented:
"We are very pleased to have successfully completed drilling operations on our first new operated well in the Company's 2022 Canadian capital programme and look forward to bringing this well and subsequent wells onto production over the first half of this year. This is the initial phase of drilling operations, and following evaluation of log and production data from these wells we will embark upon phase two which will target an additional 10 to 13 locations."

Central Alberta - Open Creek

i3's first operated drill, targeting liquids-rich gas in the Glauconite formation at 14-24-042-05W5, was completed on time and on budget. As part of i3's 100% owned, two-well Glauconite programme, drilled off the same pad in the Open Creek field of Central Alberta, the 14-24 well was drilled in 17 days - spud to rig release - to a total measured depth ("TMD") of 5,334m with a lateral length of 2,900m. As expected, the well encountered clean sand and strong gas shows throughout the entirety of the horizontal length with porosity averaging 9%. The rig has been skidded over on the same surface pad to the 13-24-042-05W5 location, with intermediate casing already set and the 3,060m lateral section currently being drilled. Both wells are expected to be completed, equipped and tied-in before the end of the first quarter with anticipated initial production rates (at 30 days post production start-up) of greater than 600 boepd per well (33% oil and NGLs) and will be produced through i3's extensive network of existing infrastructure, specifically its Leedale 09-21-043-04W5 gas plant, enabling low associated operating costs. This two-well development pad is expected to pay out in less than one year and to demonstrate the repeatability of i3's inventory of greater than 216 gross (135 net) liquids-rich development locations in the Glauconite formation.

Clearwater Drilling and Appraisal

The Company is advancing its Marten Hills Clearwater development with a non-operated four-well drilling programme (two net), which offsets i3's two wells (one net) that were drilled and tied in last July (the 01-12 and 02-12-075-26W4 wells).  i3 owns a 50% working interest in the Clearwater programme wells and has the option under the associated farm-in agreement, previously announced on 5 May 2021, to participate in an additional three wells, post this programme, which would see i3 earn 11.5 net sections of land (circa 29.4 km2) in the Marten Hills, Cadotte and West Dawson areas of the Clearwater play.

The first well, located at 12-13-075-26W4, is currently being drilled, with the remaining three wells of the programme expected to be drilled off the same pad in succession by early April. All laterals drilled to date have encountered a clean 25m thick upper shoreface sandstone with porosities ranging from 20% to 24%, and oil has been evidenced throughout via oil shows on cuttings. The wells will be equipped and brought online sequentially and concurrent with drilling operations throughout February and into April. These wells are expected to add in aggregate 440 bopd (220 bopd net) and pay out in approximately one year. 

The Company continues to de-risk its expansive Clearwater acreage position in Marten Creek, undertaking confirmatory recompletions targeting multiple distinctive Clearwater intervals (individually averaging 11 meters of thickness and 29% porosity) to characterize oil properties, further confirm the extent of i3's mapped resource, and establish future development strategies across i3's 78.6 net sections (circa 200 km²) in this core area.

Simonette

The 13-13-061-01W6 well (99% working interest) is the first i3 Energy operated Lower Montney drill on its prolific Simonette position where the Company holds an average 87.5% working interest in approximately 70 net sections (circa 178 km2) across the Company's North and South Simonette acreage positions. i3 spud the 13-13 well in South Simonette on February 4th and is currently drilling at a depth of approximately 2,600m, with an estimated TMD of 6,300m and a proposed 3,000m lateral section. 13-13 directly offsets the 102/15-13-061-01W6 Lower Montney well which was drilled in late 2018 by the prior operator and delivered strong initial results with oil rates of greater than 800 bopd. The 13-13 well will be completed using modern techniques, consistent with area operators, that have proven to deliver consistently strong results across the Montney fairway. Based on its successful implementation at the offsetting 15-13 well, 13-13 will be equipped with gas-lift to improve overall performance and to maintain consistent runtime. The well will be tied in after spring thaw and is expected to come online this summer at rates of greater than 1,000 boepd (70% oil and NGLs) with an anticipated payout of 10 months from first production. This highly prospective Montney Fairway provides an impactful growth engine for the Company, with positive results from 13-13 expected to warrant additional capital allocation and the transition to efficient multi-well pad development.

Recompletions and Operational Enhancements

The Company's operations group continues to identify low-cost, high-return opportunities across i3's robust but historically undercapitalized inventory. i3 is moving to bring on production from several recompletion and reactivation candidates with associated deliverability upwards of 600 boepd net. All such identified projects have excellent economics and payback periods of less than 1 year. 

i3 has also identified multiple pumping oil wells, which currently run off propane or casing gas, as suitable electrification candidates. These projects not only reduce operating costs but further i3's commitment to good oilfield practices, including strong environmental stewardship in the form of reduced GHG emissions from ongoing field operations.

Positioning to Capitalize on Commodity Strength

Early results from the abovementioned activities position i3 to achieve or exceed its initial expectations. Should similar success continue, the Company will look to accelerate its approved Capital Budget to take advantage of operational momentum and the current favorable commodities environment.