16 August 2021

i3 Energy plc

("i3", "i3 Energy", or the "Company")

Operational and Financial Update

i3 Energy plc (AIM:I3E) (TSX:ITE), an independent oil and gas company with assets and operations in the UK and Canada, is pleased to provide the following update.

Highlights:

·    Recent strategic acquisition of approximately 8,400 barrels of oil equivalent per day ("boepd") from Cenovus Energy Inc. ("Cenovus") expected to close on or around 20 August 2021.

·    Closed both the South Simonette and Wapiti acquisitions and commenced well reactivation programmes in both areas.

·    Completed on time and on budget initial two-well drilling programme in the Company's Marten Hills Clearwater acreage and completed drilling the first of two wells in Elmworth Wapiti.

·    Q2 2021 average production of 8,905 boepd based on net field sales estimates (excluding the production associated with i3's Cenovus and Wapiti acquisitions, which closed subsequent to quarter end but were effective from 1 April 2021) with an average over the final week of July of 10,031 boepd (excluding only volumes associated with i3's Cenovus production acquisition).

·    Inclusive of i3's current hedges, full-year 2021 net operating income ("NOI" = revenue minus royalties, opex, transportation and processing) is now forecast to be approximately USD 62.4mm, and USD 94.8mm for the next twelve months ("NTM") from 1 August 2021.

·    Maiden special dividend of 0.16 pence per share paid on 6 August 2021.

Majid Shafiq, CEO of i3 Energy plc, commented:

"The second quarter of 2021 was another intensely active and transformational period for i3 Energy. The focus and dedication of our staff propelled our production performance, resulting in the Company exiting July with a weekly average field estimate of greater than 10,000 boepd.

Further, we commenced drilling operations in our Marten Hills and Wapiti acreage and in early July announced a strategic and synergistic acquisition in our core Central Alberta area of operations from Cenovus, which will take our production to over 18,000 boepd when completed later this month. This acquisition more than doubles our proved plus probable reserves base to 133 mmboe, in addition to materially increasing our unbooked resource portfolio.

We look forward to incorporating the expanded portfolio of opportunities into our capital allocation process and anticipate a very busy period of operational activity and news-flow over the second half of 2021. We are also very pleased to have paid our maiden special dividend and look forward to commencement of our cycle of semi-annual payments following publication of interim and year-end financial statements."

Q2 Production

Production in Q2 2021, based on net field sales estimates, averaged 8,905 boepd (compared to 9,090 boepd in Q1 2021), and comprised of field estimate sales equalling 30.6 million standard cubic feet of gas per day ("mmscfd"), 1,943 barrels per day ("bbl/d") of natural gas liquids, 1,724 bbl/d of oil and 133 boepd of royalty production.

Including the recent Wapiti and South Simonette acquisitions, net field sales estimates for July 2021 averaged 9,598 boepd with an average over the final week of July of 10,031 boepd.

2021 and Next Twelve Month Net Operating Income Forecast

Based on 13 August 2021 strip pricing, i3 forecasts 2021 full-year NOI of approximately USD 62.4mm and NTM NOI from 1 August 2021 of USD 94.8mm (assuming CAD:USD 1.25), with each including projected income from the assets being acquired from Cenovus from the expected closing date of 20 August 2021. The increase from the previous NTM NOI guidance of USD 75.3mm announced on 7 July 2021 is principally due to strengthening commodity price and CAD:USD foreign exchange rate forecasts. All forecasts include the incremental anticipated volumes from the two Marten Hills Clearwater wells which have been drilled, the two planned Wapiti Elmworth wells and the planned well reactivations in South Simonette and the Wapiti acquisition assets. The forecasts also include the impact of the Company's current commodity hedging portfolio which is detailed below:

Central Alberta Core Area Production Acquisition

The acquisition of assets from Cenovus producing approximately 8,400 boepd in the Company's Central Alberta core area, as announced on 7 July 2021, is expected to close on or around 20 August 2021. The transaction has an effective date of 1 April 2021 and income accrued in the period from the effective date to the closing date will be recognised as an adjustment to the consideration being paid for the assets.

Marten Hills Clearwater Farm-in Drilling

During Q2 2021 the 01-12-075-26W4 and 02-12-075-26W4 wells were drilled, completed and tied into production infrastructure. Eight horizontal lateral legs (totalling 13,057m in the 01-12 well and 12,644m in the 02-12 well, at a maximum true vertical depth of 630m) were drilled from each wellbore and encountered a clean upper shoreface sandstone, with porosities ranging from 24% to 27%, and oil was evidenced throughout via oil shows on cuttings. The wells are now on production and flowing back drilling fluid. This clean-up process is expected to be complete by the end of August, after which the market will be updated on initial stabilised oil flow rates.

i3 owns a 50% working interest in these wells and has the option under the associated farm-in agreement, previously announced on 5 May 2021, to participate in an additional 7 wells, at least 4 of which will be spud by 31 March 2022, which would see i3 earn 11.5 net sections of land (circa 29.4 km2) in the Marten Hills, Cadotte and West Dawson areas of the Clearwater play.

Wapiti Elmworth Drilling

Well 09-17-071-10W6 in i3's Elmworth Wapiti acreage was spudded on 27 July 2021. The well reached a total measured depth of 3,472m, at a maximum true vertical depth of 1,336m which included a 1,892m horizontal section in the targeted Dunvegan formation. The horizontal leg contacted excellent reservoir, ranging from 10-15% porosity with strong gas shows and oil staining. The well was drilled on time and on budget, and the rig was released on 9 August 2021. Stimulation, completion and production tie-in operations will shortly commence on this well. The second well in this drilling programme, 8-17-71-10w6, spud on 9 Aug 2021. These oil-weighted wells are expected to initially increase i3's production by approximately 175 boepd and are estimated to return the full investment in 1.3 years based on current commodity strip pricing.

South Simonette and Wapiti Acquisitions

i3 completed on 28 May 2021 its acquisition of the entire 49.5% operated interest held by Anegada Oil Corporation in its South Simonette property. i3 now controls a 99% operated interest in the associated land base, which has a gross area of 64 km². The acquisition has an effective date of 1 April 2021. Operations have commenced to bring back on production the two suspended wells by installing gas lift in both wells. It is estimated this will result in an expected increase to i3's corporate production of approximately 720 boepd (41% oil, 4% NGLs, 55% gas). These operations are expected to be completed by the end of August.

The Company completed the Wapiti production acquisition on 20 July 2021, with a 1 April 2021 effective date. These assets currently produce 230 boepd and i3 has commenced a six well reactivation programme to bring NTM production to an estimated 310 boepd.

Serenity Appraisal Drilling Farmout

Discussions continue with potential farm-in partners for the Serenity field appraisal drilling programme. Indicative terms have been agreed in principle but  we await confirmation of funding commitments from counterparties before finalising and executing documentation. The market will be updated if and when agreements are reached.

Environment, Social and Governance ("ESG")

i3 has commenced a strategic review of its ESG objectives and targets. This will lead to the publication of the Company's maiden sustainability report around the end of 2021. In the meantime, the Company continues to pursue carbon emission reduction initiatives to meet and exceed current regulatory requirements. The Company is an active participant in the Government of Alberta's Site Rehabilitation Program ("SRP") and Saskatchewan's Accelerated Site Closure Program ("ASCP"). Through i3's involvement in the SRP and ASCP, the Company has received grants to date exceeding CAD 2.4mm, which are dedicated to accelerating the closure of inactive wells, pipelines and facility liabilities. CAD 0.2mm of this has been deployed to date and the Company is actively advancing a programme to deploy the remaining CAD 2.2mm over the course of the year, which will further reduce the Company's overall future decommissioning liability.

END

Qualified Person's Statement

In accordance with the AIM Note for Mining and Oil and Gas Companies, i3 discloses that Majid Shafiq is the qualified person who has reviewed the technical information contained in this document.  He graduated with a Master's Degree in Petroleum Engineering from Heriot-Watt University in 1988 and is a member of the Society of Petroleum Engineers. Majid Shafiq consents to the inclusion of the information in the form and context in which it appears.

Enquiries:

Notes to Editors:

i3 Energy is an oil and gas Company with a low cost, diversified, growing production base in Canada's most prolific hydrocarbon region, the Western Canadian Sedimentary Basin and appraisal assets in the North Sea with significant upside.

The Company is well positioned to deliver future growth through the optimisation of its existing 100% owned asset base and the acquisition of long life, low decline conventional production assets.

i3 is dedicated to responsible corporate practices and the environment, and places high value on adhering to strong Environmental, Social and Governance ("ESG") practices.  i3 is proud of its performance to date as a responsible steward of the environment, people, and capital management.  The Company is committed to maintaining an ESG strategy, which has broader implications to long-term value creation, as these benefits extend beyond regulatory requirements.

i3 Energy is listed on the AIM market of the London Stock Exchange. For further information on i3 Energy please visit https://i3.energy/

The information contained within this announcement is deemed by the Company to constitute inside information under the Market Abuse Regulation (EU) No. 596/2014.