i3 Energy, an independent oil and gas company with assets and operations in the UK and Canada, announces the following Q4 2022 operational and financial update.

Highlights:

• Average Q4 2022 production of approximately 22,757 barrels of oil equivalent per day ("boepd"), an 11% increase from the previous quarter, with current production of approximately 23,440 boepd
• Record corporate production exceeding 24,000 boepd achieved in December
• 2022 drilling programme completed, delivering 31 gross (18.4 net) wells, which met or exceeded management's expectations and completed approximately 5% underbudget in a high inflationary environment
• In Q4, 10 gross wells (5.7 net) brought onto production and 8 gross wells (4.3 net) drilled in its core Central Alberta, Wapiti and Clearwater assets
• Completed the 13/23c-12 appraisal well on the UK North Sea Serenity field, with a single well field development plan now being progressed
• Dividends of £5.098 million declared and £3.399 million paid in the quarter, with total dividends of £15.351 million paid in 2022
• Operations commenced on the 2023, USD 64.05 million capital programme ahead of schedule targeting 23 gross wells, with 6 gross (4.3 net) wells drilled

Majid Shafiq, CEO of i3 Energy plc, commented:
"Q4 2022 was very busy as we completed our 2022 drilling programme which met management expectations, was executed under budget and achieved peak production rates in excess of 24,000 boepd. We have successfully completed the first phase of our 2023 drilling programme, with multiple wells now on clean-up flow and several Clearwater intervals tested, and we are now on course to deliver positive YE2022 financials and reserves data by the end of March."

Production Update

Production in Q4 2022 averaged 22,757 boepd, comprised of 72.4 million standard cubic feet of gas per day ("mmcf/d"), 5,106 barrels per day ("bbl/d") of natural gas liquids, 5,119 bbl/d of oil & condensate and 458 boepd of royalty interest production. The strong quarterly production represents an increase of approximately 25% and 11% over Q4 2021 and Q3 2022, respectively. The growth realized in the fourth quarter marks the seventh consecutive quarter-on-quarter production increase for i3, which reflects both the predictable low-decline nature of the Company's base assets and the efficiency of its 2022 drilling programme.

In Q4, i3 achieved record corporate production, with peak daily rates exceeding 24,000 boepd in December as new wells were brought on stream, cleaned-up and optimized.

Current corporate production averaged 23,472 boepd, for the seven-day period ending 18 February 2023, comprised of approximately 70.7 mmcf/d, 7,132 bbl/d of NGLs, 4,516 bbl/d of oil and condensate and an estimated 400 boepd of gross overriding royalty interest production. Although intermittent seasonal production curtailments occurred, due to operational freeze-up, the continued performance of i3's predictable, low-decline asset base positions the Company to meet or exceed management's production forecasts.

Q4 2022 Operational Results

i3 continued the successful execution of its expanded 2022 drilling programme into Q4, along with the commencement of its 2023 capital programme, bringing 12 gross (7.7 net) wells on production, which focussed on operated oil and liquids rich gas wells in its strategically important Central Alberta (Glauconite, Falher, Belly River), Wapiti (Cardium, Dunvegan), and Clearwater (operated and non-operated) assets. In the quarter, the Company participated in 8 gross (4.3 net) wells across its drilling portfolio, including 5 gross (3.4 net) operated wells and 3 gross (0.9 net) non-operated wells. 

In total, i3's 2022 Canadian drilling programme delivered 16 gross (14.2 net) operated wells and 15 gross (4.2 net) non-operated wells incurring a total drilling capex of USD 71 million. The programme efficiently served to further delineate and develop its core areas, with the aggregate well performance of key targeted reservoirs meeting or exceeding management expectations. Further, the Company diligently managed its use of capital and was pleased to achieve a total budget underspend of 5.3%, a significant achievement in an environment of high inflation.

Simonette (Montney)
i3's initial 2 gross (1.99 net) Middle Montney and Lower Montney extended-reach 2-mile horizontal wells at North and South Simonette, respectively, were drilled and tied-in to production in late Q3 2022. The South Simonette Lower Montney well is now fully cleaned up and has demonstrated strong results, with initial production rates of over 1000 boepd. The single well targeting the Middle Montney formation in North Simonette continues to produce lower water cuts and higher gas oil ratios as load fluid recovery progresses.  Peak producing day production rates exceed 500 boepd.  These results, showcasing modern stimulation technology, are very encouraging for future full field pad development.  

In addition to the Montney formation, the Company's Simonette acreage has additional oil and gas potential in the Dunvegan and Wilrich formations with hundreds of potential future drilling locations. i3 plans to drill 2 Dunvegan wells and 1 Wilrich well in the Simonette field in H2 2023.

Marten Hills (Clearwater)
In Q4, i3 and its working interest partner drilled three gross (0.9 net) nine-leg multilateral horizontal wells at Marten Hills. The wells were equipped and tied-in to production facilities in November and put on clean up flow with production results exceeding Company forecasts, achieving an average gross initial 30-day producing rate of 235 bbl/d.   

2023 Capital Programme

In December 2022, i3 announced a USD 64.05 million capital programme for 2023 focussed on drilling activities in its Canadian portfolio and is forecast to deliver 23 gross wells (15.2 net, 70% net i3 operated). The drilling programme was accelerated and commenced in December 2022 with 3 gross operated (1.77 net) 1.5 mile horizontal Cardium oil wells and one gross (0.22 net) non-operated Dunvegan oil well drilled in Wapiti / Elmworth, a 100% working interest, 1.5 mile, Cardium oil well in Carnwood (Central Alberta), and 3 gross (2.5 net) Clearwater wells being drilled in Dawson and Marten Creek - the Company's two largest contiguous Clearwater land positions. These wells are either being flowed back for clean-up or being tied-in to production facilities to commence clean-up.

KeyFacts Energy:  i3 Energy UK country profile