i3 Energy has awarded Baker Hughes, a GE company (BHGE), contracts for its 2019 summer drilling programme on its Liberator and Serenity assets and its 2020 Phase I development of Liberator.
BHGE’s scope will include directional drilling, drilling fluids, mudlogging, formation evaluation operations and wellheads.
In connection with the award, BHGE has agreed that £3-million of oilfield service and oilfield equipment contract payments will not become payable until such time as i3 has received its first sales revenues from Liberator Phase I.
As part of this transaction, the i3 will be issuing to BHGE warrants up to a notional value of £3 million, totalling up to 5,277,045 warrants if fully issued.
Junior Noteholders will also be offered participation in warrants on these same terms, pro-rata to their ownership of i3 on a fully-diluted basis and also pro-rata to the proportion of warrants fully issued to BHGE, which could total up to 1,566,572 warrants if all 5,277,045 warrants are issued to BHGE.
The above remains subject to final execution between the parties of the relevant contracts.
Majid Shafiq, CEO of i3 Energy, said: “We appreciate the confidence BHGE has shown in the quality of the Liberator oilfield in agreeing to receive payments from first oil revenues. This transaction will enable us to maximize the allocation of capital resources and contingency towards our 2019 drilling activities, and we look forward to welcoming BHGE as a partner as we establish a mutually beneficial long-term relationship to unlock the value in our assets.“