i3 Energy is growing a production base in Canada
- i3 Energy to boost shareholder returns with £2.2mln interim dividend
- I3 Energy tipped to elevate cash flows through rest of 2021
- I3 Energy’s $53.7m deal to acquire package of oil and gas assets from Cenovus Energy
Quick facts: i3 Energy PLC
Price: 13.935 GBX
Market Cap: £153.46 m
About the company
i3 Energy is an energy company focused on the development and production of high return hydrocarbon fields and discoveries.
How it is doing
i3 Energy Plc is to pay out £2.2mln, 0.2p per share, in interim dividends which added to July’s special dividend takes payments to 0.36p per share in the year to date.
The company’s interim results highlight the transformational period in which the company acquired producing assets in Canada which have delivered cash flow into what had been a pre-revenue exploration and field development company.
Acquired operations sustained an average production rate above 9,000 barrels oil equivalent per day over the six months ended June 30, and the production footprint was expanded further with the subsequent closing of the Cenovus acquisition which boosted volumes up to 18,741 boepd.
“We are now a substantial production company with a full cycle E&P portfolio containing multiple options to create and return value to our shareholders,” said chief executive Majid Shafiq. “We will continue our efforts in the remainder of 2021 and beyond to grow our production business and build the scale required to efficiently and effectively maximise and sustain value creation."
The company, in a statement, described the deal as a strategic acquisition and said it expects the addition will deliver strong free cash flow.
i3 Energy Plc described its second quarter as “another intensely active and transformational period” and its deal to acquire production assets from Cenovus Energy is due to complete in the coming days.
The strategic acquisition adds around 8,400 barrels of oil per day of production in the Central Alberta area of Canada.
What the brokers say
I3 Energy Plc has had its price target raised by stockbroker WH Ireland which looks ahead to greater than expected cash flow over the remainder of 2021, as its latest Canadian acquisition closes.
WH Ireland’s fair value estimate is lifted to 29p from 27.2p – versus a current market price of around 11p – following Monday’s upbeat trading statement which highlighted production growth which will be further elevated through the acquisition of assets from Cenovus Energy, due to complete later this week.
Analyst Brendan Long noted that the effective date of the transaction is moved to April 1 which boosts the deal's economics (reducing the effective transaction cost) along with recently improved oil prices.
What management says
i3 Energy PLC's (LON:I3E, TSX:ITE) Majid Shafiq and Graham Heath join Proactive London to explain the C$65mln deal to expand its footprint in Central Alberta.
The firm will acquire assets producing around 8,400 barrels of oil equivalent per day from Cenovus Energy Inc.
As well as strong free cash flow, the deal is expected to deliver extensive operational synergies, predictable low-decline production, and a large reserve base with multi-year development inventory.
Meet the management
i3 Energy (LON:I3E) presenting at the Proactive One2One Virtual Forum 10th December 2020
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