i3 Energy plc’s subsidiary in Canada has agreed to sell certain of its royalty assets for gross cash of US$24.81 million (£19.9m).
GROWTH
The company said that the definitive transaction, with a “newly formed private royalty company” marked the next step in changing i3’s capital structure.
The deal will also enhance its financial flexibility through improved liquidity and “enabling acceleration of its growth and income-based business plan”.
Proceeds from the sale will also eliminate i3’s outstanding bank debt and establish a working capital surplus.
The company retains its 16,160 acre Simonette royalty with approximately 35 boe/d of associated production.
President of i3 Energy Canada Ltd, Ryan Heath, added that the company look to a dynamic 2024.
“The royalty disposition provides substantial capital and will allow i3 to accelerate value associated with its extensive inventory of high-return drilling locations, while jointly pursuing accretive inorganic growth initiatives.
“The company now has a fully undrawn US$55.56m senior secured revolving credit facility with a Canadian chartered bank and will remain disciplined with its conservative approach to debt management as it looks to balance stable, predictable, growth, along with its ongoing dividend programme.”
i3 Canada expects to announce later this month its capital programme for 2024.