InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is today providing an update on its activities on Petroleum Licence PL1/10 in Northern Ireland.
All the regulatory approvals and other permits, including the site lease, are now in place for drilling the Woodburn Forest-1 well this coming winter. The timing for the drilling is dependent upon securing a drilling slot for the rig and completing the funding. With regard to funding, it is disappointing to report that Larne Oil and Gas Limited (“Larne”), who exercised an option to acquire an interest in the project in September 2014, have run into funding difficulties and will no longer be participating in the project. The licence interest for InfraStrata will therefore revert to the prefarmout 45% level with a 15% working interest carried by existing partners Terrain Energy Limited and Brigantes Energy Limited. InfraStrata also holds a 50% beneficial interest in adjacent offshore licence P2123.
Whilst the terms of Larne’s exit are being resolved, the partners are currently in discussions with a number of parties to secure approximately £2.8 million to complete the funding of the well such that it can be drilled this winter.
The PL1/10 group has also entered into a Data Exchange Agreement with Islandmagee Storage Limited (“IMSL”), a company 65% owned by InfraStrata. Under the terms of the agreement the PL1/10 group has agreed to share the data from the 2D seismic survey it acquired in 2012, which includes data over the wider Islandmagee area, and future data from the proposed Woodburn Forest-1 well in return for access to the data from the Islandmagee-1 well drilled by IMSL. Of particular interest to the PL1/10 group are gas shows encountered in the Permian Magnesian Limestone below the Permian salt sequence in the Islandmagee-1 well. In addition, wireline data over the Triassic Sherwood Sandstone interval in the Islandmagee-1 well confirmed the good reservoir at this stratigraphic level over the
area. The sharing of well engineering data will benefit both projects.
Commenting on the announcement, Andrew Hindle, CEO of InfraStrata said:
“Whilst we are disappointed that Larne will no longer be participating in the project, significant progress has been made in recent months towards drilling the first exploration well on the PL1/10 licence area in over 40 years. The lower costs of onshore operations mean that onshore projects are expected to remain profitable at lower oil prices if they were to persist. The Company remains fully committed to the Woodburn Forest-1 well, and is actively pursuing a number of options to secure alternate funding for it to be drilled as soon as is practicable.
The recent Islandmagee-1 well was successfully drilled by InfraStrata for Islandmagee Storage Limited and yielded useful additional data on the deep geology of the area. The post Islandmagee-1 well engineering programme remains on time and budget for a November 2015 completion.
The Woodburn Forest Prospect has three conventional sandstone reservoir targets in the Triassic, Permian and Carboniferous. Combined Prospective Resources for the Triassic and Permian reservoirs have been estimated by the joint venture at 40 million barrels of oil.
Should oil and gas exploration be successful it would be strategically important for energy security, infrastructure investment and the wider economy in Northern Ireland, whilst also providing wider benefits for the rest of the UK and Ireland. At present, 100% of Northern Ireland’s oil and gas is imported. In Northern Ireland oil and gas accounts for approximately 90% of total final energy consumption. Oil and gas production would have a positive impact on local and national industry, with local job creation and other economic benefits..”