i3 Energy plc, an independent oil and gas company with assets and operations in the UK, has entered into a term sheet which sets out the terms and conditions of a £24mm junior secured loan note facility with warrants. A European Investment Manager with assets under management in excess of £1 billion has agreed to subscribe for £12 million of the Loan Notes and, based on offers received, the remainder of the Loan Notes are expected to be issued to one or more syndicate members and/or offtake providers who are also potential lenders in i3's senior debt facility which is under negotiation to provide USD100 million (the "Senior Facility") towards the Company's Liberator oil development.

The Junior Facility will be subject to Loan Note holders' investment committee approvals of final legally binding documentation which will include certain conditions precedent that the Company and the participants expect to be met during April 2019.

Once drawn, the proceeds of the Junior Facility will be made available to, amongst other things, partially fund the Company's planned 2019 appraisal and development drilling programme, expected to cost c.£32 million, at its 100% owned and operated Liberator oil field and Serenity prospect, which i3 estimates have STOIIPs of 314 and 197 million barrels respectively. 

As one of the conditions precedent to drawing on the Junior Facility, i3 will be required to commit a minimum of £16 million of equity which the Company can contribute through either the issue of new ordinary shares to investors or through the proceeds of its previously announced JV farmout process. The aggregate of the Junior Facility plus the contribution of £16 million from i3 is anticipated to be sufficient to allow i3 to fund its working capital requirements through to first oil and to draw on the proposed Senior Facility to fund the remainder of its currently envisaged 2019/20 capital expenditure plan. As previously announced, the Company intends to conduct a three-well development and appraisal campaign in 2019 followed by additional 2020 development drilling and delivery of first oil from Liberator at approximately 20,000 bopd by mid year.

KeyFacts Energy UK country page   l   Link to i3 Energy United Kingdom country profile