Independent oil and gas company i3 Energy has awarded Baker Hughes, a GE company (BHGE), contracts for its 2019 summer drilling program on its Liberator and Serenity assets and its 2020 Phase I development of Liberator in the UK North Sea.
i3 Energy has already signed a contract with Dolphin Drilling for the use of the Borgland Dolphin semi-submersible drilling rig at its undeveloped Liberator oil field and Serenity prospects in the North Sea.
i3 Energy said on Tuesday that 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 ($3.8M) 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 company said it will be issuing to BHGE warrants up to a notional value of £3 million at an exercise price of 56.85p per ordinary share, totaling up to 5,277,045 warrants if fully issued. BHGE can exercise the warrants via cash settlement or in exchange for payments due under OFS or OFE contracts with the company.
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.
Majid Shafiq, CEO of i3 Energy commented: “We are very pleased to announce that we will be awarding these multi-million dollar oilfield service and equipment contracts to BHGE. 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.”
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