Mr. Majid Shafiq reports

I3 ENERGY PLC ANNOUNCES FINAL RESULTS FOR THE YEAR ENDED 31 DECEMBER 2023

i3 Energy PLC has released the audited results for the year ended Dec. 31, 2023. A copy of the company's financial statements will be made available shortly on the company's as well as filed under the company's profile on SEDAR+ and will be posted to those shareholders who make or have made a request to receive a paper copy. The annual general meeting (AGM) will be held at 11 a.m. BST on June 27, 2024, at the offices of WH Ireland Ltd. at 24 Martin Lane, London, EC4R 0DR.

Achievements in 2023

Record annual production:

• Record annual production of 20,711 barrels of oil equivalent per day (boepd), at the high end of the company's 2023 guidance range of 20,000 to 21,000 boepd and 2 per cent above 2022 production.
• Record production achieved despite loss of approximately 3,100 boepd in Q2 due to restrictions associated with the Alberta wildfires, unanticipated apportionment issues associated with the Pembina Peace Pipeline liquids line, debottlenecking projects and 20 scheduled operated turnarounds.

Shareholder return:

• Total dividends of 13,298,000 pounds sterling declared and 15,338,000 pounds sterling paid in 2023.

Capital program:

• 23.2 million pounds sterling capital expenditure in 2023 delivered 12 gross (8.0 net) wells, which were completed on budget in a high-inflationary environment.

Debt refinancing:

• Successfully completed a $100-million, three-year, first-lien debt facility with Trafigura Canada Ltd. (a subsidiary of Trafigura Pte. Ltd.) and redeemed the H1 2019 loan notes in full.

Reserves replacement:

• Managed to maintain proven (1P) and proven plus probable (2P) reserves essentially flat, despite a significantly lower-capital program in 2023 relative to the prior year, with a very healthy 2P reserves life index of 23 years.
• The group now has over 390 gross booked drilling locations in its audited reserves and over 950 including unbooked locations.

Extensive planned maintenance program executed:

• Scheduled turnaround programs successfully completed on 20 operated facilities, on time and on budget.

Environmental, social, governance performance:

• Completed the electrification of 25 pumpjacks in Carmangay and Retlaw to reduce use of diesel and propane for power generation, with a further two electrifications under way, which will eliminate 4,268 tonnes of CO2 (tCO2) emissions annually.
• Completed electrification of two natural gas generators, resulting in an annual emission reduction of 907 tCO2 equivalent (tCO2e).
• In 2023, i3 replaced 295 gas-driven pneumatic pumps with solar-powered pumps, which is expected to eliminate 8,971 tCO2 emissions annually.
• Launched an alternative fugitive emissions management program, utilizing airborne methane imaging technology which is expected to reduce fugitive methane emissions by 50 per cent relative to 2022.
• Converted high-pressure natural-gas-driven pneumatics to compressed instrument air at three of i3's locations to reduce methane emissions equal to over 660 tCO2e annually.
• Continuing annual abandonment and reclamation program abandoned 46 wells, 26 pipelines and decommissioned 16 well sites, representing approximately 12 per cent of operated non-producing wells.

Outlook

The company's focus for the remainder of 2024 will be on three key areas:

1. The growth of i3's Canadian business through the deployment of capital into its large proven undeveloped reserves base, operational excellence to improve uptime and field performance, and strategic upsizing and/or repositioning of its core areas through mergers and acquisitions;
2. Maintaining flexibility to adapt to economic developments while maximizing total shareholder return;
3. Conducting its operations safely and in an environmentally secure manner.

The company continuously evaluates opportunities to strengthen its balance sheet whilst maintaining tight control of its costs and working capital position.

Majid Shafiq, chief executive officer of i3 Energy, commented:

"i3 entered 2023 with strong momentum following a very successful Q4 drilling campaign in 2022, proceeding to drill and tie in eight wells in our Wapiti, central Alberta and Clearwater acreage before the spring breakup period last March. However, as became common for 2023, the market was hit by volatile commodity prices, and, alongside natural disasters like the Alberta wildfires, and planned turnarounds and debottlenecking projects, i3 moved quickly to revaluate its capital program and protect its balance sheet. We proceeded to focus on low-risk wells in our core production assets and appraisal wells in the Clearwater and are very pleased with the results, which were delivered on budget even in an inflationary cost environment. Despite these challenges and due to our ability to adapt our portfolio and investment and drilling strategy quickly, i3 achieved record annual average production of 20,711 boepd. This is a testament to the quality of our low decline production base, our low-risk drilling inventory and the skills and dedication of our employees.

"As reported postperiod-end, i3's 2023 audited reserves report showed little change in 1P and 2P reserves, reflecting successful operational management and the quality of the company's portfolio, and was achieved despite the midyear change in capital budget and program. With more than 390 booked (gross) drilling locations, i3's reserves report exhibits a strong and diverse asset base which can support growth through the business and commodity cycles, and we look forward to advancing our growth initiatives in the near term.

"Financially, i3 was well funded in 2023, supported by the negotiation of a new $100-million facility with Trafigura early in the year, and the settlement of our outstanding 22-million-pound-sterling loan notes. Postperiod, the company has since established a $75-million non-amortizing credit facility with the National Bank of Canada, which allowed the company to repay the Trafigura loan facility. i3 has benefited greatly from building a strong relationship with Trafigura, a sophisticated oil and gas trader, but with the company's focus on Canadian growth, recognized the significance of having a Canadian bank support us in-country. Also postperiod, the company sold its non-core royalty production for circa $25-million (U.S.) at a cash flow multiple far in excess of the company's trading value, which combined with the new credit facility has significantly strengthened our balance sheet and provides financial flexibility to manage fluctuating market conditions.

"i3 was pleased to return 15,338,000 pounds sterling in dividends to investors in 2023 and remains committed to delivering shareholder value via cash returns and growth. Management continuously weighs the expected returns generated through organic portfolio development against potential acquisition opportunities, which we continue to actively evaluate.

"The company looks forward to 2024 and beyond in a much-strengthened financial position, with a strong balance sheet and growing relationships with providers of debt capital for growth. Our core asset base continues to perform consistently well and will underpin the development of the significant undeveloped reserve and resource potential in our portfolio. We look forward to executing a successful drilling program in Canada in 2024, in what we believe will be a more positive pricing environment, growing production and continuing to return cash to shareholders to deliver on our total shareholder return model."

Qualified person's statement

In accordance with the Alternative Investment Market note for mining and oil and gas companies, i3 discloses that Mr. Shafiq is the qualified person who has reviewed the technical information contained in this document. He has a master's degree in petroleum engineering from Heriot-Watt University and is a member of the Society of Petroleum Engineers. Mr. Shafiq consents to the inclusion of the information in the form and context in which it appears.

We seek Safe Harbor.