i3 Energy PLC has successfully secured a C$75 million reserve-based lending facility, marking a significant financial milestone for the UK-based energy company with Canadian operations. The new financing arrangement, secured against the company's Canadian reserves and assets, provides improved terms including a slightly better interest rate compared to the previous loan structure. According to Majid Shafiq, i3 Energy's chief executive, this strategic refinancing will generate substantial annual savings for the company.
The refinancing arrangement is expected to free up approximately C$25 million annually that was previously allocated to amortizing the existing loan. This significant capital infusion will now be redirected toward business reinvestment opportunities. Shafiq emphasized the strategic importance of partnering with a Canadian banking institution, noting their specialized understanding of the Canadian oil and gas sector and enhanced capability for accurate risk assessment. This banking relationship is also viewed as strategically important for accessing development capital to support both organic growth initiatives and potential mergers and acquisitions activity.
Complementing the refinancing announcement, i3 Energy's 2023 reserves update demonstrates remarkable stability in the company's asset base. The company reported reserves of 93 million barrels on a 1P basis and 180 million barrels on a 2P basis, maintaining these levels despite ongoing production activities. Shafiq highlighted that this reserves stability was achieved with minimal capital expenditure, particularly noteworthy given the challenging environment of low gas prices. This performance underscores the inherent quality of i3 Energy's asset portfolio and the efficiency of its management approach.
The company maintains a low production decline rate and benefits from a diverse operational portfolio, providing significant flexibility in responding to commodity price fluctuations. Looking forward, i3 Energy plans to leverage its enhanced liquidity position to pursue strategic growth initiatives. The company has committed to providing market updates regarding its capital program as development plans progress. The strengthened relationship with a major Canadian financial institution is expected to provide substantial flexibility and expanded options for executing the company's growth strategy across its Canadian operations.
