i3 Energy PLC (AIM:I3E, TSX:ITE, OTC:ITEEF) chief executive Majid Shafiq described “another busy quarter” as the Canada and North Sea small-cap oil and gas firm reported average production of 22,773 barrels oil equivalent per day (boepd) for its first quarter, up 24% on the previous year’s number.
It comes after the company delivered eight successful new wells as it kicked off its 2023 capital investment programme across its core Central Alberta, Wapiti and Clearwater assets.
i3 told investors that it had adjusted its dividend policy and capital programmes, “given the prevailing and forecast commodity pricing for the rest of 2023”.
Its new and approved programme will see US$25mln - and subject to further board approval potentially an extra US$6mln – on more new drilling, with up to 14 wells on the slate for the year (down from a previous forecast of 23). The company said it now expects that the programme will deliver between 20,000 and 21,000 boepd of production.
Under the dividend policy, i3 said it expects to have returned £15.4mln over the first nine months of 2023.
“Average production in Q1 resulted in another consecutive quarter of growth, dating back to Q2 2021, which is a testament to the quality of our asset base and operations staff,” Shafiq said in a statement.
“Since commencement of our Canadian operations, i3 has invested circa US$80mln in drilling operations; grown production from zero to over 24,000 boepd and has returned £31.0mln in dividend payments to shareholders.”
He added: “Given prevailing commodity prices and in line with our disciplined approach to capital allocation and prudent amortisation and management of the company's debt, we have revised down our 2023 capital and dividend programme, protecting the value of the assets and providing us with the flexibility to ramp up operations should commodity prices improve.”
The reported production rate of 22,773 boepd comprised of 69.6mln cubic feet of natural gas per day, 5,569 barrels of natural gas liquids, 5,238 barrels of oil & condensate and 373 boepd of royalty interest production.
i3 noted that the production growth was achieved despite the impact of gathering system pressure constraints and curtailments relating to the ongoing capacity restrictions in the Pembina (NYSE:PBA) Peace Pipeline liquid line in the company's Wapiti area, which necessitated selling a higher proportion of hot gas rather than NGLs, and a reduction in over 500 boepd of production over the quarter.
Looking ahead, it now expects these restrictions will be minimized or resolved by ‘mid’ third quarter 2023, as Keyera (TSX:KEY)'s Key Access Pipeline System (KAPS) comes online.