UK and Canada-focused independent i3 Energy has seen quarterly production double that of last year, as it looks to invest further capital in its Canadian drilling programme.
In a Q1 2022 operational update the AIM-listed producer said production for the quarter had averaged approximately 18,095 barrels of oil equivalent per day (boepd), representing a 100% increase over Q1 2021.
This comprised of field estimate sales equaling 53.5 million cubic feet of gas per day, 6,006 bpd of natural gas liquids, 2,789 bpd of oil and 376 boepd of royalty interest production.
Production has continued to rise, with i3 exiting the quarter with output of 20,312 boepd and April field sales estimates averaging 20,256 boepd.
11 wells were drilled during the quarter across i3’s portfolio, comprising 3 operated wells and 8 non-operated wells.
The Westhill-based firm pointed to this quarter’s successful farm out of a 25% non-operated stake in its Serenity field in the North Sea to Europa Oil and Gas. Europa will cover a 46.25% share of an appraisal well on the field, after which i3 will retain a 75% operated interest in the block.
Gross well costs are estimated at £14m and the well is expected to spud in late Q3 2022.
The company’s board also approved moves to increase its Canadian capital budget by up to $50 million over the previously announced $47m programme for this year.
The total of up to $97m will be focused on development drilling across i3’s core Glauconite and Cardium fairways, with expanded drilling work at Montney and Clearwater.
This revised budget is forecast to provide peak production above 24,000 boepd, though i3 noted that as a sizable portion will be deployed in Q4 2022, the full impact is likely to occur in 2023 and beyond.
CEO Majid Shafiq commented: “We are very pleased with the continued strong performance of our Canadian production base, and the resulting cash flow generation in the first quarter of 2022. We exited Q1 above 20,000 boepd, in part due to the contribution from wells drilled as part of our maiden operated drilling programme.
“Results from wells drilled to date have met or exceeded management’s pre-drill geological and production capacity expectations and have been drilled within budget.”
Full-year net operating income is now forecast to be $241m, assuming the full implementation of the larger capital budget.
An increase in the company’s dividend payout for this year is also expected in due course, Mr Shafiq said.