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i3 Energy - Strategic Production Acquisition & TSX Listing

i3 Energy plc, an independent oil and gas company with assets and operations in the UK, is pleased to announce the following update.

Highlights:

· i3 has entered into an Option agreement to acquire all issued and outstanding common shares of Toscana Energy Income Corporation ("Toscana" or "TEIC"), a TSX listed company


· TEIC had 2019 year-end 2P Reserves of 4.65 MMboe (53% oil, 47% gas) with a reserve life index of 14.7 years


·   Toscana's 2019 production averaged 1,065 boepd and generated C$5.5 million (US$3.9mm) in field netback from 13 low-decline, long-life conventional fields producing at an average breakeven price of C$30.43/boe (US$21.74/boe)


· TEIC operates 69% of the producing wells in its portfolio at an average net working interest of 67%


· i3 is purchasing Toscana at a fraction of going market-based valuations for WCSB oil and gas transactions; the total aggregate consideration being paid by i3 for TEIC's debt and equity totals approximately C$3.95 million (US$2.82mm) representing roughly 0.72x Toscana's 2019 field netback, C$3710/boepd (US$2650/boepd), and C$0.85/boe (US$0.61/boe)


On March 27th, i3 used current cash resources to purchase the rights and interests in Toscana's senior and junior debt facilities (which were in default). i3 has acquired Toscana's C$24.8 million senior facility for C$3.0 million and its C$3.2 million junior facility for C$0.4 million, with cash consideration for each being paid 50% up front and 50% at year-end.


Upon i3's exercise of the Option, Toscana shareholders will be offered up to 4,399,224 i3 shares for TEIC's entire share capital, representing dilution of approximately 4% to the Company's current shareholders and having a market value at March 27th of approximately C$0.55 million


· Following exercise of the Option and on conclusion of the Arrangement Agreement, i3 intends that its enlarged share capital will also be listed on the TSX, satisfying the Company's obligation under its existing Loan Notes to seek a secondary listing for its shares

Majid Shafiq, CEO of i3 Energy commented:


"This is a highly significant acquisition opportunity for i3 which adds material, low cost per barrel, low-decline production as well as a new growth business with a strong management team and strategy in the Western Canadian Sedimentary Basin.

"In addition to diversifying our portfolio, this transaction will help to stabilise our business with a steady revenue stream while adding considerable upside potential from within Toscana's Clearwater acreage - an opportunity which is comparable to the growth potential of our Serenity discovery. We look forward to welcoming the Toscana management team and staff to i3 and working together to grow our business in the UK and Canada." 



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