RNS Releases
26 September 2016 - Revision to Baron Oil option PDF Print E-mail

InfraStrata plc (AIM:INFA), announces that it has agreed to a modification of the option held by Baron Oil Plc (“Baron”) to acquire equity in Islandmagee Storage Limited (“IMSL”), the gas storage development company owned 90% by the Company.

On 19 August 2016, the Company announced that it had repaid a loan from Baron and had amended the option which accompanied the loan from Baron, so that Baron had an option to acquire a 15% interest in IMSL for a payment of £1,536,498 until 31 March 2017. This option has been revised, so that Baron now has an option to acquire the number of ordinary shares of 1p in InfraStrata that represents 16.666% of the enlarged ordinary share capital of InfraStrata (from time to time) for a payment of £1,536,498, until 31 March 2017. Exercise of the option in full is conditional on InfraStrata having the requisite authorities under the Companies Act 2006 to issue new ordinary shares in the Company, which will be sought at the Company’s next general meeting of shareholders (or earlier if required).

This is part of an ongoing programme of re-structuring of the Company, as it seeks to focus entirely on the Islandmagee gas storage project. This also follows the Company’s announcement on 13 September 2016 that it had increased its interest in IMSL to 90%.

The Directors of InfraStrata have also decided to divest the Company’s remaining oil and gas exploration interests and intend to commence a process to achieve this shortly.

Following these changes, InfraStrata will also seek a re-classification of the Company’s sector classification. It is proposed to reclassify the Company to the Utility sector 7573 Gas Distribution. If the Industry Classification Benchmark approves this re-classification, then the change is anticipated to be implemented in December 2016.

Commenting, Andrew Hindle, CEO of InfraStrata said:

“The amendment to Baron’s option and the other proposals announced today are important aspects of InfraStrata’s transition to the only AIM-quoted company entirely focused on gas storage and we will be reviewing our management and technical requirements to ensure that all resources will be entirely dedicated to development of the project. ”

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13 September 2016 - Acquisition of additional equity in Islandmagee Storage Limited PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to report that its wholly owned subsidiary, InfraStrata UK Limited (“IS-UK”), has acquired an additional 25% equity stake in Islandmagee Storage Limited (“IMSL”), the developer of the gas storage facility in Northern Ireland which is a joint venture with Moyle Energy Investments Limited (“Moyle”), a wholly owned subsidiary of Mutual Energy Limited (“Mutual”).

Following the acquisition IS-UK will own 90% of Islandmagee Storage Limited with Moyle holding 10%.

These changes in interests are achieved by IMSL issuing IS-UK with an additional 250 ordinary shares fully paid for cash at par. For Moyle, who joined the project in May 2008, the transaction will mean that at Final Investment Decision (“FID”) it will no longer have the shareholder obligation to advance its share of outstanding funding to date to IMSL of approximately £2m plus interest (LIBOR + 1%) to retain its interest. This sum has been loaned to IMSL by IS-UK. Instead going forward Moyle will be required to advance IMSL 10% of any future shareholder loans made by IS-UK prior to FID. IMSL will however remain liable to repay all existing funding provided by IS-UK.

Gas storage is essential for storing surplus gas for use during high demand periods and to offset any interruptions in the supply chain. It is envisaged that the Islandmagee gas storage facility will play an important role in future gas supply to Northern Ireland, Republic of Ireland and Great Britain, particularly the fast supply of gas to meet shortterm demand surges. High injection and withdrawal flow rates are two unique properties associated with fast acting salt cavern gas storage such as Islandmagee.

The Company is seeking to complete funding arrangements to sit alongside a grant of up to €4.024m from the EU in order to commence a Front-End Engineering Design (“FEED”) and commercialisation process by year end, in order to proceed to a FID for the project in late 2017. The Company is in receipt of €1.6m from the EU as the initial 40% advance of the €4.024m.

Commenting on the acquisition, Andrew Hindle, CEO of InfraStrata said:

“InfraStrata represents the only AIM-listed company with a focus on gas storage and this focus, and the importance of the project, has never been greater as we look to complete funding for a FEED and commercialisation process. There has been much reporting recently in the press about the potential for a structural change in the gas storage market partially due to the reduction of capacity at the Rough facility, which accounts for approximately two-thirds of UK storage capacity. Management believe that there has not been a better rationale for investing in gas storage for a number of years and the importance of new modern facilities to provide the necessary security. The acquisition of the additional interest in Islandmagee Storage Limited is part of a strategy for a focus of management resources on the successful delivery of maximum value from the project to InfraStrata’s shareholders. ”

Commenting on the acquisition, Paddy Larkin, CEO of Mutual said:

“Mutual is delighted that it will continue to have a key role in this strategically important project for Northern Ireland. The new shareholding level is better aligned with our long-term interests and capability and we look forward to working closely with all project stakeholders to make the project a success. ”

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19 August 2016 - Baron Oil Plc Option Revision PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to report that it has repaid the loan and agreed an amendment to the accompanying option under the Convertible Loan Facility Agreement (“Agreement”) with Baron Oil Plc (“Baron”) with respect to the Islandmagee gas storage project in Northern Ireland.

Under the terms of the Agreement, originally announced in May 2015, Baron provided a loan for €1.8 million to InfraStrata. These funds were used as working capital to bridge the receipt of the European Commission grant, the outstanding 70% of which (€1.8 million) was received on completion of the work programme as announced on 25 May 2016. The programme included the drilling of the Islandmagee-1 well, which was drilled successfully in May/June 2015, together with subsequent rock mechanical testing of salt cores and engineering work. The loan was subject to an interest rate of 8% of the funds drawn down. Baron originally had a right to extend the loan period until 31 December 2016.

Baron had an accompanying option to convert the entire balance of the loan into an equity participation of 15% of the share capital in InfraStrata’s subsidiary, Islandmagee Storage Limited (“IMSL”). Should the option be exercised, the equity would be provided pro-rata by InfraStrata and its project partner, Moyle Energy Investments Limited (”Moyle”), as the other shareholder of IMSL. The amendment to the Agreement results in the option continuing to 31 March 2017, but the loan has been repaid effective 1 August 2016 from the balancing monies received from the European Commission, thereby reducing the interest due under the loan had Baron extended it to the end of 2016. The option as amended enables Baron to acquire a 15% interest in the IMSL project for a payment of £1,536,498.

Commenting on the Agreement, Andrew Hindle, CEO of InfraStrata said:

“We are pleased to continue to be working with Baron to unlock the potential of the Islandmagee gas storage project. The Baron loan has facilitated the development of a key piece of gas infrastructure and whilst now repaid in full the amendment affords Baron the continued and extended option to participate in the project. As previously updated at the end of June 2016, the Company is continuing a process to seek new investors for Islandmagee over the summer months to enable the project to proceed through to a Final Investment Decision, targeted for 2017.”

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30 June 2016 - Islandmagee signs new EU Grant Agreement PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce it has now concluded a grant agreement with the European Commission under the Connecting Europe Facility (“CEF”) for 50%, up to a maximum of €4.024 million, of the costs associated with the Front End Engineering & Design (“FEED”) for its Islandmagee gas storage project (the “Project”) under development in County Antrim, Northern Ireland.

The Project is being developed in a joint venture between InfraStrata (65%) and local energy infrastructure company Mutual Energy Limited ("MEL") (35%).

The Company is working with MEL and advisers, as part of an ongoing process announced in March 2016, to secure the new investors who will take this strategically important project through to a Final Investment Decision, targeted for 2017.

The Company is focused on delivering the best outcome for its shareholders by securing new investors over the summer months to enable the FEED to proceed as programmed and to meet other project commitments as they fall due, including land option payments, adviser and project management costs. Discussions are ongoing with interested parties and further updates will be provided as appropriate.

As previously stated, InfraStrata has sufficient cash resources to cover its anticipated project management and administrative expenditure to the end of December 2016.

Commenting, Andrew Hindle, CEO of InfraStrata said:

“We are delighted by the continuing support of the European Commission's CEF programme for the Islandmagee gas storage project. The project will be important for years to come in providing security to gas and electricity supplies on the island of Ireland, in Great Britain and the wider European networks.

The grant support is available by virtue of the project’s Project of Common Interest (“PCI”) status afforded by the European Union and recognising the importance of the project to European energy security. In the context of the island of Ireland, the Project, as well as providing security of gas supplies, will support gas-fired power generation back-up for the roll-out of increased intermittent renewable power generation across the island and thereby help the UK and Ireland meet their carbon reduction targets.

The Company considers that it is premature at this time to make any statement on any longer term impact on the project’s PCI status in the context of the UK referendum result on 23 June and we will continue to engage with the European Commission on the progression of the FEED programme and the project’s development as before.”

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16 June 2016 - Woodburn Forest-1 well completion of drilling PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, announces that drilling has been completed at Woodburn Forest in County Antrim, Northern Ireland.

The well was drilled to a depth of 2,000 metres and encountered two conventional sandstone reservoir intervals, the Triassic Sherwood and the Lower Permian Sandstones. Wireline log analysis has calculated porosities of over 20% in the upper parts of both the Sherwood and the Lower Permian Sandstones but both targets were water wet.

The well will now be plugged and abandoned.

Commenting, Andrew Hindle, CEO of InfraStrata said:

“Following the divestment of exploration assets late last year this remained our only exploration project with costs fully carried through the well. Completing activities associated with the well will complete the work programme obligations on Licence PL1/10. The licence recently entered its second five year term. It is naturally disappointing not to have encountered a hydrocarbon accumulation and the joint venture will now fully evaluate the data collected in the well and decide where to focus its future exploration activity in the basin.

InfraStrata and its project partners would like to thank all those involved in the operations for their hard work and dedication. We will now work with our local contractors to professionally restore the site.”

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