i3 Energy Secures C$75 Million Refinancing to Fuel Growth Strategy
TL;DR
i3 Energy PLC secures C$75 million RBL facility, reducing interest costs and freeing up $25 million Canadian annually for reinvestment, providing a significant financial advantage.
The RBL facility is secured against Canadian reserves and assets, offering a slightly better interest rate, with an option to index the rate to the Canadian prime rate.
The refinancing allows i3 Energy to reinvest $25 million Canadian annually into the business, enhancing liquidity for growth initiatives and potential mergers and acquisitions, contributing to future sustainability.
i3 Energy's 2023 reserves update reveals stable reserves despite production, with 93 million barrels 1P and 180 million barrels 2P, highlighting the quality of its assets and efficient management.
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i3 Energy PLC has successfully secured a strategic refinancing arrangement totaling C$75 million through a reserve-based lending facility secured against its Canadian reserves and assets. This new financial arrangement provides the UK-based energy company with improved terms, including a slightly better interest rate compared to its previous loan structure, with expectations for further reductions as central bank interest rates decline. The refinancing represents a significant milestone for the company's financial strategy and future operational flexibility.
According to Majid Shafiq, i3 Energy's chief executive, the refinancing has effectively freed up C$25 million annually that was previously allocated to amortizing the existing loan. This substantial capital will now be redirected toward reinvestment in the business, providing enhanced liquidity for growth initiatives. Shafiq emphasized the strategic importance of partnering with a Canadian banking institution, noting their specialized understanding of the Canadian oil and gas sector and their capability to accurately assess risk in this specific market environment.
The relationship with the Canadian bank extends beyond simple financing, serving as a strategic partnership for accessing development capital for both organic growth opportunities and potential mergers and acquisitions activity. This banking relationship is expected to provide significant flexibility and expanded options for executing the company's comprehensive growth strategy. The timing of this refinancing coincides with i3 Energy's 2023 reserves update, which reveals stable reserves despite ongoing production activities.
The company's reserve report shows 93 million barrels in 1P reserves and 180 million barrels in 2P reserves, demonstrating remarkable stability achieved with minimal capital expenditure, particularly notable given the challenging environment of low gas prices. Shafiq highlighted that this reserve stability underscores the inherent quality of i3 Energy's asset portfolio and the efficiency of its management approach. The company maintains a low production decline rate and benefits from a diverse portfolio that enables operational flexibility in response to changing commodity price dynamics.
Looking forward, i3 Energy plans to leverage its enhanced financial position to pursue targeted growth initiatives and will provide market updates regarding its capital program as development plans materialize. The combination of improved financial terms, stable reserve base, and strategic banking relationships positions the company to capitalize on growth opportunities while maintaining financial discipline and operational efficiency in the evolving energy market landscape.
Curated from News Direct
