The company will add around 8,400boepd of predictable low-decline production with the acquisition
i3 Energy to acquire certain assets of Cenovus. Credit: Gerd Altmann from Pixabay.)
i3 Energy, through its Canadian subsidiary, has agreed to acquire certain petroleum and infrastructure assets of Cenovus Energy, for a total consideration of CAD65m ($53.7m).
The acquisition will add around 8,400boepd of predictable low-decline production, 79.5mmboe of 2P reserves, and more than 140 net drilling locations.
Also, it is expected to offer 80 net reactivation opportunities across nearly 212,000 net acres, a 1,140 km network of operated pipelines, and key processing facilities.
i3 expects the acquisition to offer operational synergies, a large reserve base in Central Alberta with long-term sustainable operations, and a strong free cash flow.
i3 Energy CEO Majid Shafiq said: “We continue to execute on our business plan which is to build and grow a material and diversified production business through the most efficient deployment of capital, whether that is through exploitation of opportunities within the Company’s existing portfolio or through accretive acquisitions such as this one.
“This transaction not only scales up our cashflow, but it will also, in the near term, lower our unit operating costs, increase third party tariff income and add scale to i3’s expanding list of varied development opportunities, which will materially increase our options to both grow the business and manage risks.”
To fund the acquisition, the oil and gas company intends to raise at least £40m by placing new ordinary shares at a price per share yet to be confirmed.
With expanded presence in the existing and additional oil and gas licences in Central Alberta area, i3 is expected to reduce unit operating costs and maximise third party tariff income.
The acquisition is part of the company’s strategy of capitalising on the recent market conditions to develop a cash-generative, all-weather portfolio by consolidating high quality undercapitalised assets within its core operating areas.
i3 holds a diversified, growing production base in Canada’s most prolific hydrocarbon region, the Western Canadian Sedimentary Basin and appraisal assets in the North Sea.
In September last year, the company completed the acquisition of all the petroleum and infrastructure assets of Gain Energy $58.8m