: Unlocking material value in the UK North Sea through development - - PowerPoint PPT Presentation

: NOVEMBER 2017

: Unlocking material value in the UK North Sea through development

i3 ENERGY (LON:i3E)

: NOVEMBER 2017

2

dis iscl claime imer

This presentation (the "Presentation") has been produced by i3 Energy PLC (the "Company"), solely for information purposes on the basis of publicly available information. Any decision to invest or deal in the securities of the Company should be based on the investor’s own evaluation of the Company. The Presentation does not in any way purport to be exhaustive or to contain all information that prospective investors may desire or that may be required in order to properly evaluate the business, prospects or value of the Company. Any and all interested parties should conduct their own independent investigation and analysis of the Company. They should carefully consider all of the information set forth and presented by the Company, including all assumptions, reservations, qualifications and risk factors included therein. This Presentation does not contain all of the information that might otherwise appear in a prospectus or admission document under applicable securities laws. This Presentation has not been reviewed or registered with any public authority or stock exchange. It has been furnished to recipients on a strictly confidential basis and such recipients may not reproduce, redistribute or otherwise pass

• n, in whole or in part, other than to their professional advisors, if any, the Presentation or any information disclosed herein, in meetings or through oral presentations or discussions to any other person without the Company’s explicit

approval. This Presentation does not constitute an offer to sell or a solicitation of an offer to buy any of the securities of the Company mentioned herein within the United States of America (the "United States"). The securities of the Company mentioned herein have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any state securities laws. Accordingly, such securities may not be offered or sold in the United States except in transactions exempt from the registration requirements of the U.S. Securities Act and applicable state securities laws. This Presentation is only being and may only be distributed to and directed at persons who are: (a) a "qualified investor" within the meaning of Section 86(7) of the United Kingdom Financial Services and Markets Act 2000, as amended (the "FSMA"), acting as principal or in circumstances where Section 86(2) of FSMA applies; and (b) also within the categories of persons referred to in Article 19 (investment professionals) or Article 49 (high net worth companies, unincorporated associations, etc.) of the United Kingdom Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Financial Promotion Order") (all such persons together being referred to as "relevant persons"). This Presentation does not constitute, or form a part of, and should not be construed as any offer or invitation to sell, allot or issue, or any solicitation of any offer to purchase or subscribe for, any securities, nor shall it (or any part of it

• r anything contained or referred to in it) or the fact of its distribution form the basis of, or be relied upon in connection with, or act as any inducement in relation to a decision to purchase or subscribe for or to enter into, any contract or

commitment whatsoever for securities in any jurisdiction. The distribution of this Presentation may also in other jurisdictions be restricted by law. Accordingly, this Presentation may not be distributed in any jurisdiction except under circumstances that will result in compliance with applicable laws and regulations. The Company and the Brokers (as defined below) require persons in possession of this Presentation to inform themselves about, and to observe, any such restrictions. In furnishing this Presentation, the Company does not undertake and specifically disclaims any obligation to provide any investor access to any additional information or to update the Presentation or to correct any inaccuracies in, or

• missions from, this Presentation which may become apparent.

No representation or warranty, express or implied, is given by or on behalf of (i) the Company or (ii) WH Ireland Limited, Cantor Fitzgerald Europe or FirstEnergy Capital LLP (the “Brokers”), or any of their respective directors and affiliates

• r any other person as to the accuracy or completeness of the information or opinions contained in the Presentation and no liability whatsoever is accepted by the Company or the Brokers or any of their respective directors and

affiliates or any other person for any loss howsoever arising, directly or indirectly, from any use of such information or opinions or otherwise arising in connection therewith. The Presentation does not constitute a recommendation regarding the Company or an investment therein. By attending the presentation to which this document relates or by accepting this document you will be taken to have represented, warranted and undertaken for the benefit of the Company and the Brokers that: (i) you are a relevant person (as defined above); (ii) you have read and agree to the contents of this notice (including, without limitation, that the liability of the Company, the Brokers or any of their respective shareholders and affiliates, and their respective directors, officers, employees, agents and advisers shall be limited in the manner described); (iii) you undertake, represent and warrant that you will use the information in this document solely for the purposes of discussions with the Company and the Brokers and for no other purpose; (iv) that you will comply with all laws applicable to possessing such information, including without limitation insider trading laws, market abuse regulations and applicable regulations and recommendations of the UK Financial Conduct Authority (the “FCA”) or any other relevant regulator; (v) that you are permitted, in accordance with all applicable laws, to receive such information; and (vi) you will not at any time have any discussion, correspondence or contact concerning the information in this document with any of the directors or employees of the Company, or their respective subsidiaries nor with any of their suppliers, customers, sub- contractors or any governmental or regulatory body without the prior written consent of the Company. WH Ireland Limited is authorised and regulated in the United Kingdom by the FCA and is advising the Company and no one else in connection with the Presentation and is not acting for or advising any other person, or treating any other person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to its clients, nor for providing advice in relation to the contents of the Presentation or any discussions they may have with the Company. Cantor Fitzgerald Europe is authorised and regulated in the United Kingdom by the FCA and is advising the Company and no one else in connection with the Presentation and is not acting for or advising any other person, or treating any

• ther person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to its clients, nor for providing advice in relation to the contents of the Presentation or any discussions they may

have with the Company. FirstEnergy Capital LLP is authorised and regulated in the United Kingdom by the FCA and is advising the Company and no one else in connection with the Presentation and is not acting for or advising any other person, or treating any

• ther person as its client, in relation thereto and will not be responsible for providing the regulatory protection afforded to its clients, nor for providing advice in relation to the contents of the Presentation or any discussions they may

have with the Company. IF YOU ARE NOT A RELEVANT PERSON OR DO NOT AGREE WITH THE FOREGOING, PLEASE DO NOT PROCEED FURTHER IN THIS DOCUMENT.

: NOVEMBER 2017

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forwa rward rd lo look

• kin

ing g statem ements ents

Some of the statements and information contained in this Presentation are forward-looking, including statements regarding the Company's plans with respect to development of its properties, expected drilling results and production levels from the Company's properties, statements regarding sources of financing for the Company and its development plans, estimates of the quantities of proved reserves, probable reserves, possible reserves and contingent resources, as well as estimates of the net present value of future net revenue of proved reserves, probable reserves, and possible reserves. Forward-looking statements include statements regarding the intent, belief and current expectations of i3 Energy PLC or its officers with respect to various matters, including reserves, production, first oil, drilling activity or otherwise. When used in this Presentation, the words "expects," "believes," "anticipate," "plans," "may," "will," "should", "scheduled", "targeted", "estimated" and similar expressions, and the negatives thereof, are intended to identify forward-looking statements. Such statements are not promises or guarantees, but are based on various assumptions deemed to be reasonable by the Company's management. Some of the key assumptions include: management's anticipated development timelines, production profiles for the Company's properties, and estimated cash flow from the Company's properties. Information concerning reserves and resources are deemed to be forward-looking statements, as such estimates involve the implied assessments that the reserves or resources can be profitably produced in the future. The production profiles and cash flow estimates from the Company's properties are based upon the Company's internal estimates prepared by a non-independent qualified reserves evaluator. Such profiles and estimates involve numerous assumptions and are subject to a number of risks and uncertainties, some of which are beyond the Company's control, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking statements will prove inaccurate and which could cause actual results to differ from those anticipated. The forward-looking statements in this Presentation are subject to risks and uncertainties that could cause actual outcomes to differ materially from those suggested by any such statements, including without limitation: the risk that the Company's development plans and timelines for its core properties change as a result of new information or events, the risk that drilling results differ materially from management's current estimates, reliance on key personnel, general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, environmental risks, competition from other industry participants, the risk that transactions identified herein do not close in a timely matter

• r at all, the lack of availability of qualified personnel or management, and the ability to access additional sufficient capital from internal and external sources for the Company to complete the development programs described in this
• document. The information contained in this Presentation may identify additional factors that could affect the operating results and performance of the Company.

This Presentation also contains future-oriented financial information and financial outlook information (collectively, "FOFI") about prospective results of operations, future net revenue, cash flows, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs. FOFI contained in this Presentation was made as of the date of this document and was provided for the purpose of providing information about management's current expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise any forward looking statements or FOFI contained in this Presentation, whether as a result of new information, future events or otherwise, unless required pursuant to applicable securities law. Readers are cautioned that the forward looking statements and FOFI contained in this Presentation should not be used for purposes other than for which it is disclosed herein. The forward looking statements and FOFI contained in this Presentation are expressly qualified by this cautionary statement. Included in this Presentation are estimates of the Company's cash flow which are based on various assumptions as to production levels, commodity prices and other assumptions and are provided for illustration only and are based on budgets and forecasts that have not been finalized and are subject to a variety of contingencies. To the extent such estimates constitute FOFI, they were approved by management of the Company in September 2017 and are included to provide readers with an understanding of the Company's anticipated cash flow based on the capital expenditures and other assumptions described and readers are cautioned that the information may not be appropriate for other purposes.

: NOVEMBER 2017

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i3 i3 hig ighli hlights ghts

TEAM AM

Deep E&P experience: third time creating a North Sea energy company – proven developers of

• verlooked opportunities

PROJECT OJECT

Expected H2 2018 delivery of 100% i3-owned Liberator oil development – c.12 MMboe 2P(1) and

• ver 10,000 boepd(3)

GROWTH TH

Material upside opportunity identified in UK’s 30th Licensing Round – third party Best case recoverable estimate of 69 MMbbls(2)

FU FUND NDING NG

Over 80% tightly held (65% management and board

• wnership). Development funding unlocks $328 MM

pre-tax NPV10(1) + potential upside.

1. 2P Reserves, production and valuation from AGR Liberator CPR 2017-11-03. 2. Recoverable 2C case Contingent Resources plus recoverable Best case Prospective Resources from AGR 30th Round Target CPR 2017-11-08 3. Initial production rate from Liberator LP1 production well

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Neill Carson

• n,

, CEO & Co-fou

• unde

nder

Principal Founder and Executive of both Iona Energy (CEO) and Ithaca Energy (COO)

• Constructed portfolios totaling 75+ MMboe with production of 20 kboepd

35 years international oil & gas experience

• Geophysicist and manager in Europe, Latin America, Middle East, Far East at Amoco/BP
• Discovered 400 MMbbl oil field in the UK

i3 i3 founders unders and and board ard

Graham am Heath, h, CFO & Co-founde

• under

VP Corporate Development and Interim CFO at Iona Energy

• Go-public listing of Iona via RTO in 2011, structured total financing of $670 MM in North America and Europe

19 years oil & gas experience

• Consultant to PanCanadian Petroleum, EnCana Corporation, Cenovus Energy
• Co-founded energy-related tech startups focused on enhanced oil recovery

David Knox, x, Non-exe xecuti utive Chairman an

Chief Executive Officer and Managing Director of Santos Limited from 2008 to 2015 Global experience in the Petroleum Industry

• Managing Director of BP Exploration and Production in Australasia
• Management and Engineering roles at BP, ARCO and Shell across Australia, UK, Pakistan, United States, Netherlands

and Norway

Majid Shaf afiq, , Non-exe xecut utive Director

• r

25 years technical and investment banking experience focused on the global E&P sector Seasoned oil & gas investment banking professional experienced in M&A, A&D, public and private financing

• CEO of Àrgentil Capital Partners (UK) Limited, Managing Director at First Energy Capital LLP, MD at Tristone, Director at

Waterous and Co.

• 13 years at Mobil Oil Corporation in engineering and commercial roles in the UK and the Netherlands

Richard rd Ames, Non-exe xecuti utive Director tor

34 years broad range experience in the oil and gas industry with senior executive roles in full-cycle oil and gas E&P VP positions in TNK-BP, Sidanco, and Amoco

• Responsible for government liaison, implementation of business strategies, exploration, new venture management
• Joined Amoco in 1981 as geologist responsible for reserve definition in international petroleum basins including the

North Sea

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Liberator Phase I

Reserves (2P) MMbbl STOIIP 38 RF% 28% Recoverable 11

30th Round Target (West)

Prospective (Best) MMbbl STOIIP 135 RF% 35% Recoverable 47

30th Round Target (East)

Contingent (2C) MMbbl STOIIP 64 RF% 35% Recoverable 22

i3 i3: : dev evelopment elopment

(1) + gr

growt wth h oppo pportun rtunity ity

(2)

Liberator + 30th Round Opportunity Total (2P + 2C + Best Prospective) MMbbl STOIIP 237 RF% 34% Recoverable 80

• 100% owned and operated Liberator oil

field under development with expected H2 2018 production above 10,000 boepd.

• Strategic 30th UK Round Bid on material

development

• pportunity

near infrastructure to be funded from Liberator cash flow in 2019.

1. Liberator 2P Reserves from AGR Liberator CPR 2017-11-03 2. 30th Round Target Contingent and Prospective Resources from AGR 30th Round Target CPR 2017-11-08

Blake e life-to to-date te recov

• very

y factor tor abov

• ve 60%

Above OWC

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Q4 Q4-2017 Q1 Q1-2018 18 Q2 Q2-2018 18 Q3 Q3-2018 18 Q4 Q4-2018 18 H1 H1-2019 H2 H2-2019 Implied Val’n(2) $93MM US$ 279MM US$ 557MM US$ 963MM US$ 1. 1.46B+

Liber erator

• r

FDP Approv

• ved

ed Phase e I Development elopment LP1 Prod’n LP2 Prod’n 30 30th

th Round

nd Target get 30 30th

th Round

nd Bid id 30 30th

th Award

FDP Approv

• val

30 30th

th Prod’n

unl nlocking cking potentia tential l va valu lue(1)

(1)

Production tion (boe

• epd

pd) Rese serv rves es Upgra grade e (MMbb bbl) l)

1. i3 Management view of potential corporate valuation step-up 2. Implied valuation of i3 reserves/resources and production based on 2017 weighted average market comparables of Delek’s acquisition of Ithaca Energy ($16.59/2P boe and $61,902/boepd) and Verus Petroleum’s acquisition of Wytch Farm ($18.46/2P boe and $55,000/boepd); additionally risked by 50% prior to first oil from Liberator 3. Liberator 3P Reserves from AGR Liberator CPR 2017-11-03 plus 3C Contingent and High Prospective Resources from AGR 30th Round Target CPR 2017-11-08

11 11 33 33 80 80 100+ 0+

De De-ri risk sk and convert vert upside de potential of up to 234 MMbbl bbl(3

(3)

9,200 00 20,400 400

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li liber erat ator

• r phase

ase I ove verview rview

Hig igh h quality ality oil il dis iscover very y in in Captai tain n reservoir voir near r Blake ke & Ro Ross Fiel elds ds

• Liberator analogous to adjacent Blake field with

recovery factor of 60% life to date

• Low development cost: US$ 41MM capex to H2

2018 first oil above 10,000 boepd(1)

• 2 producers, LP1 and LP2, 2018/19 delivery

− Conservative recovery factor of 28% (FDP 41%) − LP1 and LP2 pay back in less than 1 year − US$ 350MM cumulative pre-tax cash during first 3 years of production − 2P post-tax NPV10 break-even below $25/bbl Brent

RESERVES(2) 1P 1P 2P 2P 3P 3P STOIIP IIP 18 38 58 RF%(2

(2)

25% 31% 31% Recover

• verable

le (MMboe)

• e)(3

(3)

4.5 11.7 18.3 Pre Pre-tax x NPV10 10 (US$ $ MM) $60 $60 $328 $328 $576 $576

1. Initial production rate from Liberator LP1 production well 2. Liberator Reserves and valuation from AGR Liberator CPR 2017-11-03 3. Includes gas converted at 6 mcf to 1 bbl (1P 0.6 MMboe, 2P 1.0 MMboe, 3P 1.4 MMboe)

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phase ase I dev evelop elopment ment prog rogram ramme me und nder er wa way

• Field will be developed with horizontal wells
• LP1 will have a 4,400 ft horizontal section, drilled from the

Blake development centre (DC1)

• LP2 will be drilled from a second drill centre (DC2)
• Site survey covering both centres completed August 2017
• Joint technical studies nearing completion with Blake
• perator (Liberator offtake route)
• OGA-endorsed Field Development Plan submitted – approval

expected Q1 2018

Critic ical al kit secured red – 2018 first t oil deliv iver ery

• 2 trees and wellheads ordered from GE (delivery May

and August 2018)

• Tubulars contract awarded to Tenaris
• Well Management and Operator contract in place with

Petrofac

• Other key supply chain contracts being aligned for H1

2018 drilling and H2 tie-in

L1 Well Trajectory

DC2 DC1

Liberator LP1 developed from producing Blake manifold (DC1). LP2 developed from new development centre (DC2), tied back to Blake manifold. John Woods, i3’s Chief Developments Officer with Liberator Xmas Tree

: NOVEMBER 2017

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30 30th

th ro

round nd tar arge get t ove verview rview

Liber erator

• r Phase I

Reserv erves es(1)

1P 1P 2P 2P 3P 3P STOIIP IIP 18 38 58 RF% 22% 28% 29% Recov covera erabl ble (MMbb bbl) 4 11 11 17 17 30 30th

th Round Target

rget (Wes est) t)

Prosp

• specti

ctive Resou

• urces

es(1)

Low Best High gh 26 135 329 20% 35% 50% 5 47 47 165

51% chanc ance e of commercia ialit lity(3)

i3 Portf tfol

• lio

io Poten enti tial

Tota tal Reserv erves es + Resou sources ces

Low Best High gh 48 237 490 21% 34% 48% 10 10 80 80 234 30 30th

th Round

nd Target get (East)

Conti tingen gent t Resou

• urces

es(1)

1C 1C 2C 2C 3C 3C 4 64 103 20% 35% 50% 1 22 22 52 52

63% chanc ance e of commercia ialit lity(2)

Targe rget would be strate rategic c acq cquisi sition for r i3

• Discovery in open acreage available in UKCS 30th Licensing Round

near infrastructure

• i3 submitting material bid, which it believes will secure the block
• Indicative funding proposal received for 30th Round appraisal

programme (c. $13MM) upon award

• Bids due 21st November 2017, Awards Q1 2018

Mater erial upside

• Target discovery fully mapped and technically reviewed by OGA, FDP

under construction

• Successful bid would add Best case recoverable resources of 69

MMbbls to i3’s asset portfolio with high chance of commerciality

• Total Liberator Phase I and 30th Round Target potential of 234

MMbbls

1. Liberator Reserves from AGR Liberator CPR 2017-11-03, 30th Round Target Contingent Resources and Prospective Resources from AGR 30th Round Target CPR 2017-11-08 2. 30th Round Target (East) CoS: 70% chance of finding sufficiently large volume, 90% chance of commercial project reliant on obtaining licence in 30th Offshore Licensing Round 3. 30th Round Target (West) CoS: Geological CoS 56.25%, 90% chance of commercial project reliant on obtaining licence in 30th Offshore Licensing Round

: NOVEMBER 2017

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li liber erat ator

• r del

eliv ivery ery an and 30th

th ro

round nd cap apture ture

Q4 2017

Rig g Contra tract ct

Submitted Drill LP1 Nov 21st Upon award, d, A3 Appraisal planning and permitting

Libera rator

• r Phase

se I

Site Prep & Host Engine neering ng Environme

• nment

ntal al Statement nt Develop

• pme

ment nt Long g Leads FDP Approva

• val Process

Drilling ng Subse sea a Tie-in n to Host LP1 First Oil Possible LP2 Accelerat ated Drill 30 30th

th Round

und Bid – Well 30 30th

th Round

und Awards Planni nning ng and Appraisal aisal

Q1 2018 Q2 2018 Q3 2018 Q4 2018 30 30th

th Round

d Target t Captur ure and Appraisa sal

>10,000 boepd(1) Potential ial material al reserves and resour urces upgrad ade(3)

Mar 31st

st

Final Approval Drill LP2(2) Drill A3 1. Initial rate from Liberator LP1 production well 2. Liberator LP2 expected to deliver first oil in 2019, Management aspires to drill in Q4 2018 3. March 31st 2018 Award Date – OGA Guidance

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Liberator Open Acreage

UKCS: Estim imat ated Resour urces es for discov

• veries within

hin 20 km of existin ing g hubs Moray Firth h & CNSN 1,542 MMboe Central NS 1,028 MMboe Northern NS 1,021 MMboe West of Shetlands 585 MMboe Area

# of Pros

• spec

pects ts / Risk sked Resou

• urces

es

Moray Firth h & CNSN 40 / 700 MMboe Central NS 24 / 400 MMboe Northern NS 9 / 150 MMboe Southern NS 4 / 75 MMboe West of Shetlands 2 / 20 MMboe

Source: Westwood – Global Energy Group September 2017

bey eyon

• nd

d li liber erat ator

• r – i3

i3 UK UK opportuni portunity ty se set

• i3 strategy is for incremental development growth through accretive acquisition of undeveloped discoveries
• high-impact infrastructure led appraisal and small “e” exploration (effectively appraisal)

: NOVEMBER 2017

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2017/18 7/18 fundi nding ng re requ quir irem ements ents

DATE USE USE COST

($MM)

CUM

($MM)

Q4 2017 Liberator Long-leads & Rig(1) 10 10 Q4 2017 G&A(1) 2 12 Q4 2017 30th Round Bid Well(2) 13 25 25 (1,2) Q1 2018 FDP Approval (Funded to First Oil) (3) 33 58 58

1. Pre-FDP funding: $12 million required to secure 2018 Liberator delivery (trees, wellheads, H1 2018 rig) and fund G&A. FDP approval expected March 2018. 2. $13 million required to support bid commitments in 30th Offshore Licensing Round (non-binding indicative proposal received from current investor) 3. Q1 2018 funding requirement reduced by $13 million if 30th Licensing Round bid unsuccessful(2)

Support from m Current ent Inves estors

• A non-binding indicative proposal has been received from an existing investor to materially support both i3's future fundraising

initiatives (25% commitment) and up to $13MM of the Company's proposed work obligations for its 30th Licensing Round bid. Debt/C /Credit Facilities es

• i3 is in a formal process seeking to secure a $25MM+ credit facility to be used for Liberator’s Phase I development. A senior

lender has confirmed support of up to 50% of this facility subject to completion of due diligence and final approvals. Potent ential al Joint nt Venture e Opportuni nities es

• i3 in discussion with numerous parties on accretive joint venture deal structure (cash consideration plus promoted development

carry of i3).

: NOVEMBER 2017

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ap appen pendix dix

: NOVEMBER 2017

15

li liber erat ator

• r phase

ase I - su subsur surface face ove verv rview iew

• Reservoirs are high quality Lower Cretaceous

Captain sands

• Reservoir gross thickness of 316 ft, net to gross

reservoir thickness above 95%, average porosity 29%, oil saturation 80%

• Permeability ranges between 2,000 and 3,000

mD

• OWC 5,270 ft tvdss, identical to original Blake

field OWC confirmed by logs and MDT points

• PVT sample analysis indicates under-saturated oil
• f similar quality as Blake field - 30.3 API, 1.9 cp

viscosity at reservoir condition and GOR of 340 scf/stb

K50 OWC 5270 ft

: NOVEMBER 2017

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li liber erat ator

• r phase

ase I su subsea sea fac acil iliti ities es