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i3 Energy confident of securing approval for Liberator blocks in 2019 despite delay in farm-out talks

Exclusive farm-in talks with a potential partner were supposed to have finished next Monday, but i3 is still waiting on a couple of the conditions to be met

north sea
The Liberator blocks could be host to as much as 80mln barrels of oil

i3 Energy Plc (LON:I3E) remains confident that it will receive development and production consent from UK regulators for its Liberator and Liberator West blocks in the UK North Sea next year.

The explorer thinks the approval process will be unaffected by a delay in concluding negotiations with a potential farm-in partner.

A decision was expected to be made before next Monday (September 24) but i3 is still waiting on the potential partner to address a couple of outstanding conditions.

READ: i3 Energy grants exclusivity period to unnamed company for potential farm-in deal

Once the assurances have been provided, the company said it would be ready to enter a legally-binding farm-out agreement.  

The contractual negotiations would if successful, result in i3 being fully funded for both the Liberator field development and the appraisal of Liberator West.

As for the field development plan (FDP) approval, the AIM-listed independent oil and gas company reiterated its confidence in getting the go-ahead from the UK Oil and Gas Authority in 2019.

Final license documentation for the award of block 13/23c, which contains the Liberator West extension, has been signed.

This licence, effective from October 1 2018, is a prerequisite to the submittal of i3's enlarged Liberator FDP.

On top of that, site survey field operations are about to get underway, data from which will enable the company to complete the required Environmental Statement for Liberator's expected production wells, appraisal target and pipeline route.

Delay no barrier to FDP approval

“The independent work concluded by our potential JV partner since the beginning of our engagement validates the significant potential of the Liberator asset,” said chief financial officer Graham Heath.

“We continue to progress i3's necessary deliverables to attain FDP approval in 2019 and don't see the delay in concluding potential joint venture discussions as an impediment to that.”

Liberator West is estimated to contain 22 million barrels of oil (MMBO) of 2C Contingent Resources, in addition to Liberator's 11 MMBO of 2P Reserves which i3 expects to increase through well optimisation.

The Liberator West Resources Report also recognizes an area within the Liberator structure which extends beyond i3's modified Phase I development plans, and provides additional mid case Prospective Resources of 47 MMBO recoverable for this area, bringing i3's total Mid case reserves, contingent resources and prospective resources to over 80 MMBO on a gross basis.

i3 shares were down 23% to 84p in early trading on Tuesday.

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