RNS Releases
17 December 2015 - Posting of Annual Report PDF Print E-mail

InfraStrata plc is pleased to advise that the Annual Report and Financial Statements for the year ended 31 July 2015, which includes a notice of the Annual General Meeting (“AGM”), is now available on the Company's website, www.infrastrata.co.uk, and will be posted to shareholders tomorrow. The AGM will be held at 11.30 a.m. on 26 January at the offices of Allenby Capital Ltd, 3 St Helen’s Place, London EC3A 6AB.

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08 December 2015 - Final results for the year ended 31 July 2015 PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to announce its final results for the year ended 31 July 2015.

Overview and highlights

Islandmagee Gas Storage Project – County Antrim

  • Concluded a grant agreement with European Union’s Connecting Europe Facility for €2.5million (£1.9m) being 50% of the cost of a £3.8 million salt core programme of work comprising the drilling of a well to obtain salt cores and subsequent testing and engineering work.
  • Salt core programme was completed on time and within budget and reporting back to the European Commission is imminent.
  • Feasibility phase of project has now addressed all key technical risks and InfraStrata will now progress the monetisation of the de-risked project in early 2016.
  • European Union grant was available by virtue of the projects designation as a Project of Common Interest (“PCI”) which was renewed for a further two years in November 2015 – the only gas storage project in NW Europe to have this designation. As a PCI the project benefits from accelerated permitting procedures, improved regulatory conditions and continued eligibility to apply for financial support from the European Union.
  • InfraStrata retains a 65% interest in the project reducing to 55.25% should Baron Oil plc exercise their option to acquire a 15% interest in the project.

Oil & Gas Exploration

  • Secured Consent to Drill for Woodburn Forest-1 well on PL1/10 in County Antrim. Design and procurement of the well is substantially complete in anticipation of drilling in H1 2016 following completion of funding arrangements.
  • InfraStrata with partner Brigantes seeking to farm out a combined 45% interest in the licence to complete the 60% outstanding funding for the well.

Divestment of Exploration Assets

  • In November 2015 disposed of substantially all of the Group’s exploration interests, including shareholdings in associated companies Brigantes Energy Limited and Corfe Energy Limited to Corallian Energy Limited.
  • Immediate cash receipt of £240,000 with a further £300,000 contingent upon the completion of the funding of the Woodburn Forest-1 well on licence PL1/10. Consideration also includes Net Profits Interest instruments in assets sold providing upside in the event of successful exploration but without a commitment to pay future exploration costs on the assets sold.
  • InfraStrata expects to retain a 10% interest in the PL1/10 licence fully carried through the Woodburn Forest-1 well.
  • Primary focus of InfraStrata’s business going into 2016 is the Islandmagee Gas Storage project in County Antrim and the monetisation of our interest in the project.

Financial

  • Loss for the year ended 31 July 2015, £6,106,070 (2014: loss £1,246,701) after making impairments of £6,072,785 to reflect the cash proceeds from the exploration asset divestments.
  • No value ascribed to Net Profit Interests retained in exploration assets – but they provide upside in the event of exploration success.
  • Cash cost of project management and company administration for the year ended 31 July 2015 £1,065,161 (2014: £1,126,482). Following further salary reduction and other cost savings annualised project management and company administration costs now running at less than £800,000, before any recoveries as licence operator.
  • Capital costs of Islandmagee storage project during the year £3,663,514 funded by proceeds from £2.1million placing completed in February 2015 and a €2.5 million grant from the European Union.
  • €1.8 million loan facility (£1 million drawn at 31 July 2015) from Baron Oil plc to bridge payment profile on European Union grant – convertible to 15% interest in Islandmagee Storage Limited.
  • Cash and cash equivalents at 31 July 2015 £430,199 (2014: £1,648,955)
  • Appointment of Allenby Capital Limited as Nominated Advisor and joint broker.

Commenting on the results and outlook, Andrew Hindle, CEO of InfraStrata plc said:

" The successful drilling of the Islandmagee salt core well and subsequent testing and design development is testament to our ability to deliver on time and within budget. With the European Union’s Project of Common Interest designation renewed for a further two years we are now firmly focused on delivering the best outcome for our shareholders’ investment in the project.

We are committed to the drilling of the Woodburn Forest-1 well in County Antrim and expect to have a 10% interest in the licence fully carried through the well providing potentially material upside for shareholders in the event of success. The divestment of our other exploration assets has provided clarity for InfraStrata shareholders with the future focus on Northern Ireland where we have built up strong stakeholder relationships over 9 years of operations on our projects in County Antrim."

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30 November 2015 - Notification of Final Results PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, advises that it will be announcing its final results for the year ended 31 July 2015 on Tuesday, 8 December 2015.

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27 November 2015 - Islandmagee Update PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to provide an update on its Islandmagee gas storage project.

In the Company’s update announcement on 4 September on the 2015 programme of work, InfraStrata confirmed that following successful drilling of the Islandmagee-1 data gathering well to obtain core samples of the Permian Salt and wireline data, all end of well reports had been finalised and the initial results from the laboratory testing on the cores were encouraging and being used by InfraStrata’s engineering team to update the facility design and costs estimates.

Test results on the salt cores and rock mechanics have now been incorporated into the preliminary design of the subsurface and surface facility and cost estimates for the project have been updated.

InfraStrata is therefore pleased to confirm that with the finalisation of this work, the five stages of the £3.8 million programme of work have been successfully completed, on time and within budget. The overall results from the technical programme of work are positive and the objective to confirm the feasibility of the development of an underground gas storage facility in salt caverns in this location has been met.

The thickness and depth of the Permian Salt were both within 10% of pre-drill estimates. The Permian Salt average thickness over the area of the proposed gas storage caverns is approximately 200 metres to a depth of approximately 1,300 metres sub-sea. The rock mechanical properties of the salt determined from the core data are in line with data for Permian Salt at other locations across northern Europe where caverns for gas storage have been constructed and are in operation.

The successful completion of the programme is a major milestone for the project and InfraStrata can now commence the monetisation process to attract investors into the project to take it through to detailed design and on to full construction.

In addition, InfraStrata is pleased to announce that the status of the Islandmagee gas storage project as an EU Project of Common Interest (“PCI”) was reconfirmed recently with the adoption of the latest PCI list by the European Commission on 18 November 2015. The list of PCIs is reviewed and updated every 2 years and continued inclusion is a significant boost for the project. Islandmagee is the only gas storage project in northwest Europe to be awarded PCI status.

Under PCI rules, PCI projects benefit from accelerated permitting procedures and improved regulatory conditions and are also eligible to apply for financial support from the Connecting Europe Facility (“CEF”). A budget of €5.35 billion has been allocated under CEF for 2014-20 to help PCIs be implemented faster and make them more attractive to investors. As an existing PCI, InfraStrata, on behalf of the project company Islandmagee Storage Limited (“IMSL”), successfully applied in 2014 for a €2.5 million grant to support its 2015 programme of work and IMSL will continue to seek to utilise the benefits PCI status brings to the project including further applications for financial support, where appropriate.

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

“We are very pleased with the outcome of the programme of works which will enable InfraStrata to move forward with the monetisation phase. This process should be helped by the confirmation that Islandmagee gas storage has been reconfirmed as a PCI, which not only underlines its strategic importance as a key energy infrastructure project at a European level, but also provides the potential to access further grant funding through CEF to assist with its development.”

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16 November 2015 - Divestment of exploration assets PDF Print E-mail

InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, announces today that it has re-organised its business and agreed to sell exploration based assets to focus on its strategic gas storage project in Northern Ireland. This will involve several steps through which if they all complete will result in the Company divesting itself of most of its exploration assets in exchange for £540,000 cash and retained interests in each of the assets without obligations for future investment in respect of those assets.

Background to and reasons for the divestment

Confirmation from Larne Oil & Gas Limited in August 2015 that they were unable to meet their funding obligations on the PL1/10 and P2123 licences in Northern Ireland, including the repayment of costs already incurred, has negatively impacted InfraStrata’s cash position in a challenging market environment. With upcoming expenditure commitments in 2016 across the portfolio of exploration assets, the Board determined that the transfer of substantially all future commitments associated with the exploration assets in exchange for cash consideration and a retained interest in the assets represented the best outcome for the Company and shareholders. This transaction will avoid dilution for shareholders through equity fundraising for the purposes of exploration and enable the Company to focus on the development and monetisation of its gas storage project in 2016.

Terms of the transactions

InfraStrata has signed Sale & Purchase Agreements (“S&P Agreements”) with Corallian Energy Limited (“Corallian”) and Osmington Holdings Limited (“Osmington”), a wholly owned subsidiary of Corallian. Corallian and Osmington are recently incorporated UK companies. Under the S&P Agreements, InfraStrata will transfer its entire interests in UK offshore licences P1918, P2222 and P2235 to Corallian, and its 40% shareholdings in Brigantes Energy Limited (“Brigantes”) and Corfe Energy Limited (“Corfe”) (which between them hold interests in UK licences P1918, P2123, PL1/10, PEDL201, PEDL 237, PL090 and PEDL070) to Osmington. The effective date for these transfers is 1 October 2015.

The transfer of licence P2235 involves an amendment of the Asset Exchange Agreement with Fyrd Energy Limited (“Fyrd”) announced on 16 December 2014 (the “Fyrd Agreement”) under which InfraStrata acquired a 25% interest in licence P2235. Under the revised Fyrd Agreement, Fyrd will transfer its remaining 75% interest in licence P2235 to InfraStrata and in exchange, InfraStrata will transfer its 22.5% retained interest in the rights and intellectual property in its former Portland project (which are held directly by InfraStrata rather than via a new project company as originally contemplated in the Fyrd Agreement), excluding the gas pipeline rights and associated intellectual property, to Fyrd. The entire P2235 interest to be held by InfraStrata will then be transferred under the S&P Agreements to Corallian. In addition, the Portland gas pipeline rights and associated intellectual property will be transferred by InfraStrata to Osmington as part of the S&P Agreements.

The total consideration payable immediately under the S&P Agreements is £240,000 plus a net profits interest (“NPI”) instrument in each of P1918, P2222 and P2235 of 4% of Corallian’s anticipated interest in the licence at the time of drilling the first well on the licences (0.5%, 0.5% and 1% respectively of the gross) plus a 4% share of any future profits derived by Osmington from its shareholdings in Brigantes and Corfe, again in the form of NPI instruments.

The NPIs will entitle InfraStrata to that share of any future profits from the licences or from Brigantes and Corfe without making any further investment. The NPI instruments may be traded and sold by InfraStrata.

In addition to the above, Corallian has also agreed to acquire from InfraStrata a fully carried 10% interest in both the PL1/10 licence and offshore licence P2123 in Northern Ireland, for a cash consideration of £300,000 (the “NI Agreement”). The NI Agreement is subject to conditions precedent, notably a successful outcome of the ongoing farm-out process, on terms currently being negotiated with interested parties, for the Woodburn Forest-1 well in Northern Ireland licence PL1/10 (further details of which are below). InfraStrata and Corallian are looking to conclude the NI Agreement by February 2016.

InfraStrata, together with Brigantes, are farming out a combined 60% interest in the PL1/10 licence in order to complete the funding for the Woodburn Forest-1 well. The Company is pleased to report that it has now signed an agreement, together with Brigantes, with Ermine Resources Limited (“Ermine”) whereby Ermine will acquire a 15% interest (paying 20% of the Woodburn Forest-1 well costs) in the PL1/10 licence, subject to the full well funding being completed. InfraStrata and Brigantes are in discussions with a number of other parties with regard to completing the farm-out process for the remaining 45% so that the well can be drilled this coming winter.

Following satisfactory completion of all the transactions above and in addition to the retained NPI instruments, InfraStrata’s business will comprise its 65% interest in the Islandmagee gas storage project in Northern Ireland and a 10% interest in onshore licence PL1/10, fully carried through the Woodburn Forest-1 well. InfraStrata will remain as operator on PL1/10 and will be compensated accordingly. The cash proceeds from the transactions will be applied to the ongoing work programme on the Islandmagee gas storage project in preparation for monetisation during 2016.

The Company is in the final stages of completing its 2015 work programme following the drilling of the Islandmagee-1 well for its gas storage project and is also in discussions with a number of interested parties in relation to monetisation of its interest in the asset. A further update on the gas storage project will be provided later in November as previously stated.

The historic net cash investment in the assets being disposed of by the Group was £281,477. The Board determined the total consideration payable by Corallian and Osmington under the S&P Agreements and the NI Agreement based on a cash equivalent for farm-in terms being negotiated with other parties for a 10% interest in the Northern Ireland licences and a typical industry 4% NPI on the other exploration assets. However, the payment under the S&P Agreements is not conditional upon the NI Agreement being concluded. Transfer of the licence interests will be subject to regulatory authority approvals.

Andrew Hindle is a Director of InfraStrata and has made an investment in Corallian, but holds less than 20 per cent. of its issued share capital. Andrew Hindle has not taken part in the InfraStrata Board’s consideration and approval of the transactions with Corallian and Osmington.

Commenting on today’s announcement, Ken Ratcliff, Chairman of InfraStrata said:

“ Market sentiment towards investment in oil and gas exploration has continued to be negative during 2015, none more so than for AIM listed companies, and this is reflected in share prices and the challenges associated with raising new capital to invest in exploration. The disposal of most of our exploration interests to Corallian enables us to secure future participation in these assets through a company that can focus upon attracting the necessary financial investment required to take the assets forward in 2016.

At the same time the transactions provide absolute clarity regarding the Company’s long stated strategy of not using its own cash resources to fund major exploration expenditure whilst in the process of monetising the gas storage project. No further investment is expected to be required by InfraStrata in the assets sold, but the Company retains an upside in the event of any successful exploration through the retained NPI instruments and a retained operated interest in licence PL1/10, subject to a successful completion of ongoing farm-out negotiations with third parties.

The cash consideration from the Corallian transactions will provide short term capital for our immediate working capital needs and allow InfraStrata to sustain and add value to the Islandmagee gas storage work programme into 2016, as the Company seeks to optimise the timing and nature in which value can be secured from the project for shareholders.”

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