i3 Energy to raise £30m to fund Gain acquisition

i3 Energy has unveiled plans to raise £30m to fund the acquisition of Canadian company Gain Energy’s petroleum and infrastructure assets.

The company plans to raise the money from institutional and other investors at a price of 5p per share to fund the reverse takeover.

Concurrently, PrimaryBid will run an offer for subscription. It will allow i3’s retail shareholders and new investors to participate with institutional investors at the same price.

The move comes a month after i3 entered a binding purchase and sale agreement to acquire all the petroleum and infrastructure assets of Gain Energy for £45.27m ($59m).

A private firm, Gain Energy operates in the Western Canadian Sedimentary Basin.

i3 has also agreed to sell Gain’s assets located in Saskatchewan province to Harvard Resources for $33m. However, this deal is conditional upon the completion of Gain acquisition by i3.

Accordingly, the revised consideration that i3 need to pay to acquire the remaining Gain assets is $26m, subject to normal completion adjustments.

Gain’s assets, which would be retained by i3, produced around $22m in field EBITDA from 242 Gain-operated wells and 1,044 non-operated wells last year.

i3 further noted that the updated 2P reserves of the Gain assets are 53.8 MMboe with a before-tax NPV10 of around $182m, as of 30 June.

The acquisition and the fundraising are subject to i3 shareholder approval. The general meeting of the shareholders is scheduled to be held later this month.