Deal as i3 eyes Canada growth

North Sea operator i3 Energy plans to buy out a struggling Canadian oil and gas firm and list on the Toronto Stock Exchange.

The Alternative Investment Market-listed i3, whose core assets lie in the Outer Moray Firth, struck a deal to acquire all of Toscana Energy Income Corporation’s shares in exchange for some of its own.

Bosses at i3, based in Westhill, near Aberdeen, said the “option agreement” came in at a “fraction of marketgoing valuations”, with it also taking on Toscana’s debt in a proposed transaction worth about £2.2 million.

i3 said it had considered “a number of global oil and gas basins and specific opportunities”, including in the UK North Sea, but the Toscana deal was a “unique, time-limited opportunity to build a

“Aunique, time-limited opportunityto buildaportfolio”

portfolio of production assets on superior metrics not achievable elsewhere”.

The option expires on June 30, or later if another date is agreed.

i3, which aims to use Toscana as a springboard for growth in Canada, said it needed to diversity its asset portfolio in order to “spread and mitigate risk”.

Toscana’s portfolio is focused on western Canadian assets which i3 said had “prolific growth potential”.

The Calgaryheadquartered Toscana has “struggled for some years” and is now in default under the terms of its debt facility agreements, i3 added.

Majid Shafiq, chief executive, i3, said: “In addition to diversifying our portfolio, this transaction will help to stabilise our business with a steady revenue stream.”

Plans for one of the largest undeveloped fields in the UK North Sea are on ice due to the coronavirus pandemic.

Siccar Point Energy and joint venture partner Shell UK had hoped to make a final investment decision (FID) on developing Cambo, about 78 miles north-west of Shetland, later this year.

But Aberdeen-based Siccar said yesterday the “unprecedented worldwide macroeconomic dislocation” of Covid-19 had