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.
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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.
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By GlobalDataAccordingly, 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.
