I3 Energy PLC (LON:I3E) is undertaking a bold change of strategy with its acquisition of Gain Energy and Toscana in Canada, according to Mirabaud.
Through the deals, i3 Energy is seeking to transform itself into a consolidator of long life/low decline conventional production assets in Canada.
These deals will enable it to offer shareholders a dependable and growing stream of dividends.
Combined the two companies bring around 12,000 barrels per day equivalent at a cost of US$62m in total.
“Talks around these acquisitions started in Q1 2020 and were consummated right at the time global oil prices were in free fall,” said the broker.
“As a result, the deal metrics are particularly attractive, with i3 paying less than 2x forward 12-month EBITDA and 0.5x our PV10 [cash value] of the PDP [producing] reserves.”
“As well offering tremendous value, the acquired assets are also carbon-neutral, thanks to a stake in the world’s fourth-largest Carbon Capture projects – placing i3 at the cutting edge of the green revolution in the E&P space.”
Earlier, I3 Energy disclosed it was acquiring Gain for US$58.8mln.
Shares in I3 are suspended on AIM pending a re-admission document.