i3 Energy PLC advances towards dividends as it reworks Baker Hughes contract

i3 Energy PLC (LON:I3E, ) has announced a new mutually beneficial agreement with Baker Hughes to restructure a contract entered into previously in 2019.

It comes as the company is refocussing its business to prioritise production assets in Canada over the North Sea field development projects, which the Baker Hughes deal was attached to.

Specifically, an equipment contract has been cancelled without penalty whilst the two parties reconfirmed a commitment to still work together for the Serenity appraisal project and its eventual development.

Baker Hughes will see previously issued warrants converted into shares, worth a total of £527.71, and it gives i3 permission to restructure its balance sheet as required in order to make its intended dividend payments (terms of the prior partnership included restrictions to project Baker Hughes against equity dilution).

i3 also agreed that as it pays dividends with 2021 cashflow it will make a payment equivalent to 10% of the dividend value to Baker Hughes, up to a maximum of £229,000. It will also pay Baker Hughes a fee of £145,383 before September 30.

Meanwhile, there are also adjustments to a deferred payment invoice which kick-in upon i3 securing a farm-out transaction for the Serenity project.

“We are pleased to have reached this important milestone which enables us to proceed with our promised dividend strategy, and we want to reiterate our appreciation for the supportive and creative relationships we continue to foster with our partners and creditors as we evolve the company,” said Graham Heath, i3 chief financial officer.

i3 also noted that all other consents have been received from its relevant creditors, including its majority noteholders, to proceed with its intended reduction in share capital so that it can proceed with its dividend plans.