i3 Energy gains on strong Q4 and FY23 performance
() , a UK and Canada focused oil producer, issued a Q4 2023 (Q4) and FY23 operational and financial update. reported annual average production for FY23 of 20,711 boepd, near the high end of its full-year guidance range of 20,000-21,000 boepd. Q4 production averaged 20,413 boepd.
i3 Energy's 2023 drilling programme delivered 12 gross (8.0 net) wells. In Q4, four gross oil-focused wells (2.54 net) were drilled in i3's Central Alberta core area. Full-year 2023 net operating income was estimated at US$93m, in line with guidance, with year-end net debt expected to be c. US$23m.
Dividends of £3.083 were declared and paid in Q4, with total dividends of £13.298m declared and £15.338m paid in FY23.
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Overall, a strong Q4 and FY23 for i3 Energy, delivering record annual average production thanks to a highly productive 2023 work programme. In total, 12 wells were completed, in aggregate meeting or exceeding management expectations, despite last year's weakness in commodity prices. The programme, combined with i3's existing asset base, delivered strong financial performance, in line with income guidance, as well as dividends of over £15m in FY23. i3 continues to employ an effective hedging strategy, protecting c. US$41m of FY24 net operating income.
In total, i3's 2023 Canadian drilling programme comprised of 10 gross operated wells and 2 gross non-operated wells. Capex of c. US$30m served to develop i3's core areas of Central Alberta, Wapiti, and Clearwater. The Q4 programme, focused on Central Alberta, included the drilling, completion, and tie-in of 2 gross horizontal Glauconite oil locations, 1 gross vertical Leduc oil well, and a minor working interest in a non-operated Belly River oil well.
On the ESG front, i3 continued to make progress in reducing Scope 1 and Scope 2 carbon emissions. The company replaced pneumatic pumps with solar-driven alternatives at 11 locations and electrified 13 pumpjack engines in Carmangay and Retlaw, together expected to reduce emissions by 3,200 tCO2e per year. Concurrently, compressor consolidation projects are expected to yield a further reduction of 3,400 tCO2e per year. Additionally, i3 implemented an ALT FEMP at its locations in FY23, anticipated to reduce fugitive emissions by 50% year-on-year. The company published its 2022 ESG report in January.
Looking ahead, as commodity prices soften, i3 is evaluating more M&A opportunities where higher ROI is often achievable. The company said it is looking at strategic acquisitions and disposition of non-core assets to increase liquidity, without giving specifics. Meanwhile, i3's 2024 work programme should deliver further wells in H2 ahead of winter pricing. The current plan is to focus on oil, with the option to pivot to gas should gas prices recover. i3 remains well funded with 25 locations acquired and surveyed, supporting capital allocation based on forecast H2 oil and gas prices.
shares jumped 4.2% on the results.
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