Mr. Majid Shafiq reports

I3 ENERGY PLC ANNOUNCES REDUCTION OF SHARE CAPITAL

i3 Energy PLC posted its notice of general meeting (the circular) to shareholders yesterday. The circular contains details of a proposed reduction of capital being undertaken to ensure there are sufficient distributable reserves to facilitate dividend payments in the long term. This capital reduction process is not required to facilitate the payment of the next quarterly dividend.

Terms used in this announcement have the same meaning given to them in the circular.

Notice of general meeting, as determined by the Companies Act 2006 in the United Kingdom (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) and referred to as a general meeting throughout this document.

The circular, which was posted to shareholders yesterday, is available on the company's website. 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. (British Time) on April 15, 2024. The general meeting will be a special meeting for the purposes of NI 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

As outlined in the company's RNS (regulatory news service) issued on March 11, 2024, 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 group 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.-IFRS (international financial reporting standards) in its parent company accounts for the year ended Dec. 31, 2023, which is the same reporting framework applied in its 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 company's stand-alone 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 0.0001 pound sterling and share premium of approximately 0.1234 pound sterling on each share;
2. The newly created capital reduction shares are cancelled by way of a court-approved reduction of capital; and
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 be cancelled.

This is expected to create 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 buy-back of the company's shares (or other distributions to shareholders).

If the proposed capital reduction is approved by shareholders at the general meeting, it will be subject to the scrutiny of, and confirmation by the court, 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 by the end of May, 2024.

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, support the company's ability to pay dividends, should circumstances in the future make it desirable to do so.

Timetable of principal events

The expected timetable of principal events with respect to the capital reduction are as shown in the associated table (more precise dates will be announced following the conclusion of the GM).

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.

The company is well positioned to deliver future growth through the optimization of its existing high-working-interest 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.

We seek Safe Harbor.