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2021 Net Operating Income Forecast

Based on current strip pricing, i3 forecasts 2021 net operating income (revenue minus royalties, opex, transportation and processing) of approximately CAD 38mm (USD 31mm), which integrates i3's initial implementation of a disciplined hedging strategy and excludes expected 2021 cash flow from either the Noel or Clearwater initiatives described herein. The Company plans to opportunistically hedge 50% of its oil volumes and 50% to 70% of its gas volumes in order to protect its dividend policy and expected production maintenance capital expenditures.

During February and early March, the following oil and propane hedges were executed:

During March and April, a number of natural gas swaps were executed for the period between 1^st June to 31^st October 2021, totalling volumes of 21.4 mmscfd at an average price of CAD 2.83/mcf.

Clearwater Activity

• Background to the Clearwater Play

The Company considers the Clearwater one of the premier economic oil play types in Alberta, Canada. Development of the play commenced in 2016 and current production is circa 38,000 barrels of oil per day ("bopd") from approximately 443 wells. The formation is at shallow depth (less than 1000 meters total vertical depth), exhibits conventional reservoir characteristics and has been developed with relatively low-cost multilateral horizontal wells which do not require stimulation.

• i3's interest in the Clearwater Play - Marten Creek

As part of the acquisition of its Canadian assets in June 2020, i3 owns 71.7 gross sections (57.8 net sections, equivalent to 148 km²) of Clearwater rights in the Marten Creek and Nipisi areas. This acreage has been historically developed for gas production from the Clearwater formation and the acreage contains a large inventory of 166 operated surface pads and more than 150 km of operated pipeline infrastructure, which can be utilised to minimise future capital requirements as efforts shift to potential oil development. During February and March 2021, i3 took advantage of winter access conditions to enter three suspended gas wells in its Marten Creek acreage to perforate potential oil zones in two thick prospective Clearwater intervals. Encouragingly, oil samples were recovered from both targeted intervals in two of the three wells. i3 has commenced planning for an appraisal and development drilling programme to be implemented during the upcoming winter drill window in either Q4 2021 or Q1 2022.

• Clearwater Farm-in

On 30^th April 2021 i3 entered into a Participation Agreement (farm-in) with an existing Clearwater producer ("Partner") to participate in a drilling programme within the Marten Hills, Cadotte and West Dawson areas of the Clearwater play. The agreement covers the potential drilling of six initial wells; two to be spud by November 2021 and the remaining four by 31^st March 2022. i3 retains the option to drill an additional three wells to earn the remaining farm-in lands. Should all nine wells be drilled, i3 will earn 11.5 net sections of land (circa 29.4 km²) across the three areas. i3 will pay 75% of the costs to drill the first two wells to earn its 50% working interest. Subsequent wells will be funded by i3 and the Partner on a 50:50 basis. The cost to drill, equip and bring each of the first two wells onto production is estimated to be less than USD 1.3mm. The net exposure to i3 for six wells is estimated at be USD 7mm. The initial two wells will be drilled in Marten Hills, and upon success will immediately be completed and brought onto production. Type curves for similar wells in the area suggest that the first two wells will have sub two-year payouts, followed by single-year payouts thereafter, and production rates of approximately 150 bopd following start-up. Drilling plans have commenced with the first well spud expected in May.

• Clearwater Acquisition - Alberta Crown Land Sales

In addition to the appraisal and development of our existing Clearwater acreage in Marten Creek and access to drill-ready wells at Marten Hills, i3 bolstered its acreage position in the Clearwater via a recent successful Crown Land Sale purchase. On 10^th March 2021, i3 acquired a 15-year lease on 7 sections (17.9 km²) of land in the emerging Cadotte area, with no associated drilling obligation, for under USD 300k. The acreage has stacked potential in the Clearwater, Falher and Bluesky formations and contains a number of plugged and abandoned wells which have oil shows and gas readings throughout these intervals. Nearby acreage has been successfully developed for both Clearwater and Bluesky oil production.

Noel Gas Well

The tie-in project for the Noel gas well in British Columbia is progressing on schedule and on budget. The well remains subject to regulatory approvals and tie-in to third-party gas processing facilities. i3 expects the well to be on production during June 2021.

Serenity Appraisal Drilling Farmout

Discussions continue with potential farm-in partners for the Serenity field appraisal drilling programme. The market will be updated if and when an agreement is reached.

Dividend Process

i3 has nearly completed the necessary preparatory work and creditor approvals process for a court-led balance sheet restructuring which is required to create distributable reserves in order to pay its maiden dividend. Once ready, an EGM will be called to allow shareholders to approve the restructuring in parallel with an application to the UK courts for judicial approval, following which the dividend can be paid. Shareholders can expect to receive a notice to this meeting shortly.

END

Enquiries:

Notes to Editors:

i3 Energy is an oil and gas Company with a low cost, diversified, growing production base in Canada's most prolific hydrocarbon region, the Western Canadian Sedimentary Basin and appraisal assets in the North Sea with significant upside.

The Company is well positioned to deliver future growth through the optimisation of its existing 100% owned asset base and the acquisition of long life, low decline conventional production assets.

i3 is dedicated to responsible corporate practices and the environment, and places high value on adhering to strong Environmental, Social and Governance ("ESG") practices. i3 is proud of its performance to date as a responsible steward of the environment, people and capital management. The Company is committed to maintaining an ESG strategy, which has broader implications to long-term value creation, as these benefits extend beyond regulatory requirements.

i3 Energy is listed on the AIM market of the London Stock Exchange. For further information on i3 Energy please visit https://i3.energy/

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com

SOURCE: i3 Energy PLC

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