Based in Westhill, near Aberdeen, i3 Energy said the cancellation of its share premium account was likely to be confirmed at a court hearing on June 29.
It said this would “clear the way” for i3 to make dividend distributions.
If it gets a favourable outcome, a special dividend would be paid in late July.
Half-yearly dividends would then be paid alongside the release of i3’s interim and annual reports.
The first half-yearly dividend payment would be made in September 2021 for up to 30% of the company’s first-half free cash flow.
Shares were up 10.99% to 10.10p as of 9am.
The company also announced plans to drill two wells with a partner at its Canadian Wapiti Elmworth acreage, at a net cost of $2.1 million.
Operations are expected to commence shortly and are anticipated to conclude in early Q3 2021.
The wells are expected to initially increase i3’s production by 175 barrels of oil equivalent per day and are estimated to return the full investment in 15 months.
I3 has also entered a letter of intent to buy 230 barrels per day of Wapiti production.
The firm intends to conduct six reactivations to bring production to an estimated 310 barrels at a total cost of $410k.
This production acquisition is expected to complete in Q2 2021.
CEO Majid Shafiq said: “i3 is continuing to deliver on its stated strategy of economics-driven buying or building, dependent on attainable metrics.
“To date in 2021, i3’s WCSB initiatives are expected to materially increase both production and free cash flow, which is expected to directly translate into healthier cash distributions and a stronger balance sheet to pursue opportunities as they arise.
“On our intention to become a dividend payer, the necessary share capital reduction is nearly behind us and we expect to commence returning value to our shareholders by way of a special dividend, with scheduled half-yearly dividend payments thereafter alongside our interim and annual reports.”