i3 Energy said it will clear all its bank debt from the sale of a partial stake in its royalty assets in Canada.
Total gross cash consideration from the sale is US$ 24.8 million, with the assets sold producing 388 barrels of oil equivalent a day.
I3 added the sale price equates to 6.9 times 2024 forecast cash flow and approximately US$63,960 per flowing boe/d, which represents "a significant premium to the company's current market valuations".
A 16,160-acre royalty position, along with approximately 35 boe/d of associated production at the Montney oil asset at Simonette has been retained by i3.
Ryan Heath, i3 Energy Canada president commented, “Proceeds from the Royalty Disposition advantageously position the company to fully eliminate its bank debt and create a working capital surplus; all while preserving a substantial, low decline, production base exceeding 19,000 boe/d (~48% liquids).
"The increased liquidity on the company's balance sheet combined with its stable cash flows, will support both its organic and inorganic initiatives, as we actively look towards a dynamic 2024."
After the sale, i3 added it will have a fully undrawn US$55.56 million senior secured revolving credit facility with a Canadian chartered bank.