COLLABCAD 75 MILLION RBL & SETTLEMENT OF EXISTING LOAN-I3 ENERGY PLC

COLLABCAD 75 MILLION RBL & SETTLEMENT OF EXISTING LOAN-I3 ENERGY PLC

Establishment of a CAD 75 Million Reserve-Based Credit Facility and Settlement of Existing Loan Facility

i3 Energy plc (AIM:I3E) (TSX:ITE), an independent oil and gas company with assets and operations in the UK and Canada, is pleased to announce the successful establishment of a reserve-based lending facility (the "Credit Facility"). The new Credit Facility marks a significant step in transitioning i3's capital structure, enhancing the Company's financial flexibility through improved liquidity and enabling acceleration of its growth and income-based business plan.

Highlights:

·    New Credit Facility: A new CAD 75 million reserve-based senior secured credit facility with a Canadian chartered bank, comprised of a CAD 55 million revolving facility and a CAD 20 million operating loan facility.

·    Settlement of Existing Loan Facility: Repayment of approximately CAD 57 million, representing the outstanding balance of i3 Energy's existing CAD 75 million loan facility (the "Loan") with Trafigura Canada Ltd., a subsidiary of Trafigura Pte Ltd ("Trafigura").

·    Removal of Amortisation Schedule: The new Credit Facility, unlike the Loan, is non-amortising and releases CAD 25 million per annum, which the Company will deploy in its production growth initiatives.

·    Pro Forma Positioning: An estimated year-end 2023 net debt of approximately USD 23 million (CAD 30.5 million) (unaudited), together with forecast cash flow, positions the Company with significant liquidity to contribute to its growth and income strategies.

Majid Shafiq, CEO of i3 Energy plc, commented:

 

"We are very pleased to have re-financed our existing Loan with a traditional reserve-based lending facility provided by a major Canadian chartered bank with a long history of financing the country's oil and gas industry. The non-amortising structure of the facility has an immediate benefit in increasing liquidity, which we can deploy in high return growth initiatives. This is a very positive validation of the strength of our underlying portfolio, and we look forward to building our new financial relationship in a mutually beneficial manner as we expand and grow our Canadian operations.

 

We maintain an extremely positive working relationship with Trafigura, and the expansion of our commercial dealings with a range of sophisticated debt capital market investors attests to the quality of our portfolio, staff, and the success of our development operations in Canada over the last several years."

 

The establishment of a CAD 75 million senior secured revolving credit facility with a Canadian chartered bank was utilized to settle the Company's existing CAD 75 million Loan facility with Trafigura, without prepayment penalty, of which approximately CAD 57 million was outstanding at the time of the repayment. Secured against substantially all the assets and shares of i3 Energy Canada Ltd., the new Credit Facility, comprised of a CAD 55 million revolving facility and a CAD 20 million operating loan facility, has been established for i3 Energy's wholly owned subsidiary, i3 Energy Canada Ltd. The two-year term of the new Credit Facility is expected to be extended on an annual basis, subject to lender approval.

The Company has initially drawn down approximately CAD 27 million on the new Credit Facility, which was used, along with cash on hand, to repay the Trafigura Loan. The interest rate on the outstanding portion of the revolving facility depends on certain ratios and at inception will be Canadian Prime Rate plus 2.00%, with the option to change to Canadian Overnight Repo Rate plus 3.00% should it be more favourable to do so. The balance of undrawn credit will be available for general corporate purposes, including working capital requirements, acceleration of organic growth from i3's proven portfolio of development drilling locations, and to fund accretive acquisition opportunities.

The refinanced capital structure provides greater financial flexibility by unlocking the Company's significant working capital surplus and enhances its free cash flow profile through the elimination of the previously managed three-year, CAD 25 million per annum, straight-line amortization schedule. With this refinancing, the Company now has the ability to accelerate development of its extensive inventory of development locations to enhance shareholder value.

Following the establishment of the new Credit Facility, the Company plans to release its 2024 capital budget in mid-April. The Company will remain disciplined with its conservative approach to debt management, as it looks to balance stable, predictable, growth, along with its ongoing dividend program.

Norton Rose Fulbright Canada acted as legal counsel to i3 in relation to the refinancing.

Year-End 2023 and 2024 Quarterly Financial Reporting

As the Company's Canadian shareholding has now increased beyond 10%, i3 is no longer a designated foreign issuer and therefore is no longer eligible for TSX continuous disclosure exemptions previously granted through National Instrument 71-102. As such, the Company will commence issuing TSX required quarterly financial reports for Q1 2024, including a Management Discussion and Analysis (MD&A). Additionally, as i3 transitions to this reporting schedule, an Annual Information Form (AIF) will be included as part of the Company's 2023 year-end financial statements which will be issued in mid-April

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