Mr. Majid Shafiq reports

I3 ENERGY PLC ANNOUNCES REDUCTION OF CAPITAL

i3 Energy PLC will post notice of general meeting to shareholders on March 25, 2024. The circular will contain details of a proposed normal course reduction of capital, being undertaken to ensure there are sufficient distributable reserves to facilitate dividend payments in the long term. This announcement, and the filing by the company of a notice of meeting and record date on SEDAR+, is made earlier than required by the Companies Act 2006 in the United Kingdom in order to satisfy the requirements applicable to the company under Canadian securities laws. This capital reduction process is not required to facilitate the payment of the next quarterly dividend.

Notice of general meeting, as determined by the Companies Act 2006 in the U.K. (considered a notice of special meeting for the purposes of Canadian securities laws, as determined in accordance with National Instrument 54-101 (Communication with Beneficial Owners of Securities of a Reporting Issuer)).

The circular will be available on the company's website on the anticipated date of posting, March 25, 2024, and will be mailed to U.K. shareholders where it has been requested and to Canadian shareholders in accordance with applicable Canadian securities laws. The circular will also be filed under the company's profile on SEDAR+.

The general meeting (GM) is to be held at the offices of W. H. Ireland Ltd. at 24 Martin Lane, London, EC4R 0DR at 11 a.m. BST on April 15, 2024. The general meeting will be a special meeting for the purposes of National Instrument 54-101.

Shareholders are strongly encouraged to appoint the chair of the meeting as their proxy for the GM. This will ensure that your vote will be counted even if attendance at the GM is restricted, or you are unable to attend. Shareholders should refer to the circular for detailed instructions as to how they may submit their proxy for the GM.

The results of the votes on the resolution proposed at the GM will be announced as soon as practicable after the conclusion of the GM and will be available on the company's website.

Proposed capital reduction

The board considers it highly desirable that the company has the maximum flexibility to continue the payment of dividends in line with its dividend policy and otherwise to return value to shareholders. The capacity of a U.K. company to make distributions is restricted by the sufficiency of distributable reserves. The board considers that it is to the benefit of shareholders that the significant value in the company and its subsidiary undertakings is reflected in the parent company balance sheet and is represented by distributable profits to facilitate a sustainable dividend policy.

The company has transitioned to U.K.-adopted international accounting standards (U.K. IFRS) in its parent company accounts for the year ended Dec. 31, 2023, which is the same reporting framework applied in the consolidated group accounts. Under the transitional provisions of U.K. IFRS, the company has restated its investment in i3 Canada to fair value as at the date of transition and this remeasurement has given rise to a reserve in equity, being the transition reserve. The transition reserve is an unrealized profit and, as such, does not form part of the company's distributable reserves.

The adoption of U.K. IFRS in the parent entity accounts has no impact on the consolidated financial statements of the group.

It is therefore proposed that:

1. The amount standing to the credit of the transition reserve of 148,517,000 pounds sterling is capitalized by way of a bonus issue of newly created capital reduction shares with a nominal value of 0.1 pound sterling and share premium of 0.1234 pound sterling for each share;
2. The newly created capital reduction shares are cancelled by way of a court-approved reduction of capital;
3. 148,396,755 pounds sterling, being the amount standing to the credit of the company's share premium account following the capital reduction bonus issue, is cancelled.

This is expected to increase distributable reserves in the company to facilitate the future payment of dividends (in cash or otherwise) to shareholders, where justified by the profits of the company, or to allow the redemption or buyback of the company's shares (or other distributions to shareholders).

If the proposed capital reduction is approved by shareholders at the GM, it will be subject to the scrutiny of, and confirmation by, the High-Court of England and Wales which will take due account of the protection of creditors and, subject to that confirmation and registration by the Registrar of Companies in England and Wales of the order of the court, is expected to take effect later this year.

The board anticipates that this will result in the creation of distributable reserves, however this is subject to (i) there being no materially negative change in the financial position or prospects of the company; and (ii) any provision that the court requires the company to make for the protection of its creditors (although the board does not expect any undertakings or similar measures to be required). This will give the company the maximum flexibility to consider the payment of dividends and otherwise return value to shareholders, should the board consider it appropriate. It should however be noted that if the company is required to give undertakings to the court, this may delay the company's ability to pay dividends and otherwise return value to shareholders.

There will be no change in the number of ordinary shares in issue (or their nominal value) following the implementation of the capital reduction and no new share certificates will be issued as a result of the capital reduction. The capital reduction itself will not involve any distribution or repayment of capital or share premium by the company and will not reduce the underlying net assets of the company. The distributable reserves arising on the capital reduction will, subject to the discharge of any undertakings required by the court as explained below, support the company's ability to pay dividends.

The directors reserve the right to abandon or discontinue any application to the court for confirmation of the capital reduction if the directors believe that the terms required to obtain confirmation are unsatisfactory to the company or if, as the result of a material unforeseen event, the directors consider that to continue with the capital reduction would be inappropriate or inadvisable.

A detailed description of the business to be conducted at the GM will be provided in the circular.

About i3 Energy PLC

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.

We seek Safe Harbor.