i3 Energy PLC (AIM:I3E, TSX:ITE, OTC:ITEEF) has announced the results of the 2022 year-end reserve report for its subsidiary i3 Energy Canada, confirming a 9% increase in proved plus probable developed producing (2PDP) reserves to total 65.7mln barrels oil equivalent.
Total proved (1P) reserves meanwhile increased by 10% to 93.5mln barrels and total proved plus probable (2P) reserves increased by 18% to 181.5mln barrels.
"The Canadian reserve report reflects the hard work and commitment of the entire i3 team,” said Ryan Heath, president of the i3 Energy Canada subsidiary in a statement. “The company's 2022 capital program was executed with efficiency, while meeting or exceeding production expectations and corporate guidance."
Majid Shafiq, i3 Energy chief executive, added: “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 US$1.2bn or £0.81 per share at year-end, with their longevity demonstrated by a reserve life index of 22 years."
The reserves report detailed that i3 Energy’s organic working interest reserves replacement ratio for 2022 was 176% on a 2PDP reserve basis – which would be 214% on a 1P reserves basis, and 479% on a 2P basis.
The report also showed that reserves life (for 2PDP, 1P, and 2P respectively) amounts to an estimated 8.8 years, 12.2 years, and 22.5 years which combined with the company's low base corporate decline rate of approximately 17%, is said to underpin the company’s ability to sustainably grow production per share from its existing asset base and generate significant distributable cash flow for shareholders.
It estimates some US$511mln (C$689.8mln) of net present value of cash flow from the reserves 2PDP base – or US$623mln and US$1.16bn (C$841mln and C$1.56bn) for 1P and 2P reserves respectively.
I3 noted that the report envisages an efficient development of the company’s assets.
It added that the company has delivered FD&A costs of US$2.96 per barrel oil equivalent on a 2PDP basis, translating to a recycle ratio of 6.0 times over the three-year period since the company’s entrance into the Western Canadian Sedimentary Basin.
Moreover, it highlighted a 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. The total company inventory (comprising undrilled booked and undrilled unbooked wells) now tallies 881 gross undeveloped well locations.