i3 Energy, an independent oil and gas company with assets and operations in the UK and Canada, today announced the results of its 2022 year-end reserve report, for its subsidiary i3 Energy Canada.

i3's independent reserve report (the "GLJ report") was prepared by GLJ Ltd. ("GLJ") in accordance with standards contained in the Canadian Oil and Gas Handbook (COGEH) and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), with an effective date of 31 December 2022.

Highlights

Successful Execution of 2022 Capital Programme Provided Year-Over-Year Reserve Additions Across All Reserve Categories 

• Total Company Interest proved plus probable developed producing reserves ("2PDP") increased 9% to 65.7 million boe, total proved ("1P") reserves increased 10% to 93.5 million boe and total proved plus probable ("2P") reserves increased 18% to 181.5 million boe, compared to the prior year.

Strong Organic Reserves Replacement Ratio, Long Reserve Life Assets and Low Decline Profile to Support the Company's Total Return Model

• The Company's organic Working Interest reserves replacement ratio in 2022 was 176% on a 2PDP reserve basis, 214% on a 1P reserves basis and 479% on a 2P basis.
• 2PDP, 1P and 2P reserve life indices of 8.8 years, 12.2 years and 22.5 years, respectively, combined with our low base corporate decline rate of approximately 17% and our extensive inventory of highly economic development drilling locations, underpin i3's ability to sustainably grow production per share from our existing asset base and generate significant distributable cash flow for our shareholders. 

Material Increase in the Company Interest Reserve Value

• As evaluated by GLJ, the Before-tax Net Present Value ("NPV") of cash flows attributable to the Company's reserves, discounted at 10%, has been determined to be $511.0 million (CAD 689.8 million), $623.0 million (CAD 841.0 million), and $1,161.5 million (CAD 1,568.0 million) for its 2PDP, 1P and 2P reserves, respectively, being indicative of the Company's strong production base, successful 2022 drilling program and robust portfolio of economic development opportunities.
• 2PDP NPV per share, using a 10% discount rate, increased by 50% to £0.36 per share (CAD 0.58 per share), 1P NPV increased by 43% to £0.43 per share (CAD 0.71 per share) and 2P NPV increased by 56% to £0.81 per share (CAD 1.31 per share), as compared to the prior year.

Strong Finding, Development and Acquisition ("FD&A") Cost Metrics and Recycle Ratios Reflective of Efficient Development and Opportune Acquisition Strategy

• Efficient development provided strong FD&A costs of $7.68 per boe on a 2PDP basis, translating to recycle ratios of 2.84x.
• Over the three-year period since its entrance into the Western Canadian Sedimentary Basin, i3 has delivered FD&A costs of $2.96 per boe on a 2PDP basis, translating to a recycle ratio of 6.0x.

Partial Recognition of the Company's Undeveloped Locations Leaves Significant Inventory of Future Unbooked Upside

• Successful conversion of undeveloped locations to production, while increasing the total net undrilled booked locations by 25% to 376 gross (255.1 net) locations across the Company's four core areas, for a total Company inventory (undrilled booked and undrilled unbooked) of 881 gross (502 net) undeveloped locations.
• Material increases in booked Montney and Cardium oil locations, with 32 net and 12.2 net locations added, respectively.
• Total undeveloped inventory represents greater than 30 years of development drilling assuming the current annual capital program.

Ryan Heath, President of i3 Energy Canada Ltd., commented:
"The Canadian reserve report reflects the hard work and commitment of the entire i3 team. The Company's 2022 capital programme was executed with efficiency, while meeting or exceeding production expectations and corporate guidance. The efforts of 2022 have placed i3 in a strong position for 2023 as we continue to build upon the Company's predictable low-decline base production and further expand its extensive portfolio of high-return development opportunities."
 
Majid Shafiq, CEO of i3 Energy plc, commented:
"2022 was another very successful year for i3 Energy. In 2021 our reserves replacement was primarily driven by acquisitions. In 2022 we pivoted to growth via the drill bit and very successfully grew production and our reserves base. We proved the quality of our asset base and the expertise of our staff by organically delivering growth in our P1 reserves by 10% and 2P reserves by 18%. Our 2P reserves are now independently valued at circa $1.2 billion or £0.81 per share at year end, with their longevity demonstrated by a reserve life index of 22 years. Whilst this reflects year-end commodity pricing it demonstrates the material upside in our portfolio and the potential for year-on-year growth in production and total shareholder return."

Through the Company's productive 2022 drilling programme, i3 successfully converted a suite of high-return undeveloped locations to production, while increasing the total net undrilled booked locations by 25% to 376 gross (255.1 net) locations across its core areas, for a total Company inventory (undrilled booked and undrilled unbooked) of 881 gross (502 net) undeveloped locations. 

Material increases in booked reserves were predominantly a direct result of i3's successful 2022 Montney and Cardium development initiatives, in its Simonette and Wapiti fields, resulting in an increase of 32 net and 12.2 net booked oil locations added, respectively. Total undeveloped inventory now represents greater than 30 years of economic development drilling, based on the Company's current annual capital programme.

KeyFacts Energy Industry Directory: I3 Energy