By Scott Wright

CANADA-based i3 Energy has declared its plans to start drilling on the Serenity oil field in the Moray Firth are on track, as it predicted continuing volatility in the global energy market.

The company, which is listed in Toronto and London, completed a farm-in deal on Serenity this month, paving the way for the appraisal well to be spudded. Europa Oil & Gas secured a 25 per cent working interest in a licence block containing the Serenity field in the Outer Moray Firth on August 1. In exchange, Europa will fund 46.25% of the drilling cost on Serenity, up to a gross capped cost of £15 million.

i3 had previously held a 100% working interest in the Moray Firth block, which in addition to Serenity includes the Liberator oil discovery and the Minos High prospect. The company notes on its website that the licence is situated between the producing Captain field to the north-west, and the producing Blake field to the east.

Drilling on the Serenity appraisal well will allow i3 to update its estimate of oil in place, which currently ranges from 16 million barrels in the low case to 240 million barrels in the high case.

The update came as i3, which has an asset base of more than 700 net conventional oil, natural gas and natural gas liquids production wells in Canada, made major strides in revenues, cash flow and production in the six months ended June 30. Revenue surged to £101.6 million from £26.5m and cash flow from operations climbed to £48.6m from £8m. That came as production averaged 18,950 barrels of oil equivalent per day, 107% higher than in the first half of 2021.

Dividends totalling £6.85m, or 0.6p per share, were announced in the first half. i3 announced in May that it would be increasing dividends payable during 2022 by 25% to £14.78m, equating to 1.3125p per share.

Chief executive Majid Shafiq said: “We are very pleased to announce a solid set of results for the first half of the year.

“These reflect the hard work of our staff in Canada and the UK in successfully progressing our business plan on all fronts. We have made great strides in executing efficiently on our operated drilling program in Canada, with all wells drilled being on prognosis geologically and production contributions now commencing following tie-ins to infrastructure.

"We are also very happy to bring in a partner to the Serenity oil field in the UK and plans to drill the appraisal well are on track to spud this month.”

Shares closed down 2% at 24.5p.