i3 Energy to Acquire Additional Stake in South Simonette Oil Property

i3 Energy is set to acquire an additional 49.5% interest in the South Simonette oil property in Lower Montney, Canada, from Anegada Oil.

The move comes after Anegada executed a purchase and sale agreement last month to sell its stake to a third party. i3 exercised its Right of First Refusal (ROFR) that it held over the Anegada stake at $4.2m to acquire the additional interest.

The transaction is expected to close in the second quarter of this year, subject to regulatory approval.

Once complete, i3 Canada will control a 99% operated interest in the associated land base with a gross area of 64km².

According to a previous evaluation, the Anegada interest’s 2P reserves are 4.9 million barrels of oil equivalent (MMboe) with an estimated valuation of $30.9m.

i3 Energy CEO Majid Shafiq said: “The acquisition of this operated working interest in South Simonette is not only a very accretive addition to our production portfolio, but also highly strategic for i3.

“Following completion, we will be close to a 100% owner and operator of our North and South Simonette properties, which are significant contributors to our current production base and provide significant, incremental oil-focused growth potential during a sustained period of higher oil prices.

“Together with recent acquisitions and advancement of development opportunities in our growing Clearwater position and other assets in our portfolio, this acquisition provides significant optionality in terms of where we choose to allocate our development capital.”

After the deal closes, i3 plans to resume production from two suspended wells. This is expected to lead to an increase to i3’s corporate production of 720 barrels of oil equivalent per day (boepd) (41% oil, 4% NGLs, 55% gas).

Notably, i3 owns an operated 100% working interest in 53km² of land in North Simonette. Current net production from the location amounts to 825boepd.