|21 January 2014 - Exploration Operations Update|
InfraStrata plc (AIM:INFA), the independent petroleum exploration and gas storage company, is pleased to provide an operational update on its exploration drilling plans for 2014 ahead of its AGM which is taking place today.
Licence P1918, Wessex Basin
The formal granting of planning permission for the proposed onshore to offshore exploration well in December 2013 included a condition that construction and drilling activities must take place between September and March. Plans are progressing well towards commencement of site construction on 1 September 2014, so that drilling may commence in November 2014. The Company will need to obtain licences and consents from a number of stakeholders, including the Environment Agency and the Department of Energy and Climate Change (“DECC”), and the Health and Safety Executive. Arrangements will also be required to drill from an onshore licenced area, across which the well will be directionally drilled for 600 metres to access offshore licence P1918.
Drilling will be subject to completing funding for the well through a farmout process. The dataroom opened in January 2014. The well will target prospective resources within the licence estimated by the joint venture at 10 million barrels of oil equivalent (“mmboe”).
Two additional part-blocks adjacent to P1918 were offered by DECC to the joint venture in November 2013 as part of the 27th Seaward Licensing Round. However with the focus now on the prospectivity within block 98/11 in the east of the licence it was decided not to accept the blocks. The joint venture partners have identified prospective resources of over 100 mmboe within block 98/11. Further reprocessing of 2D and 3D seismic data is planned in the coming months and an update on the prospective resource estimates will be provided on completion of this work.
Following its acquisition by Cairn Energy plc, Nautical Petroleum Limited (“Nautical”) has decided to withdraw from the P1918 licence. A farmout agreement with Nautical has been terminated and InfraStrata, together with partner Corfe Energy Limited, will acquire their 10% licence interest, subject to DECC approval. InfraStrata will acquire an 8% interest for no consideration and will include this licence interest in the ongoing farm out process. Prior to the farmout InfraStrata will hold a direct 78% interest in the licence and a further 8.8% via a shareholding in partner company, Corfe Energy Limited.
Licence PL1/10, Larne-Lough Neagh Basin
We are pleased to announce that permission has now been confirmed under Permitted Development for the proposed PL1/10 exploration well. Like the P1918 permission it also permits a window for activities on site between September and March. Plans are progressing well towards commencement of site construction on 1 September 2014, so that drilling may also commence in November 2014. In order to drill the well, the Company will consult with a number of stakeholders, including Northern Ireland Environment Agency and Northern Ireland Health and Safety Executive, and obtain consent to drill from the Department of Enterprise, Trade and Investment (“DETI”). The Company will also need to complete an agreement for a lease over the land for the wellsite.
Drilling will be subject to completing funding for the well through a farmout process. A dataroom opened in January 2014. The well will target prospective resources estimated by the joint venture at 40 mmboe. Prospective resources of over 450 mmboe have been estimated by the joint venture within the licence area.
It was previously announced in November 2013 that an area offshore Larne-Lough Neagh Basin was offered by DECC to the joint venture as part of the 27th Seaward Licensing Round. Formal award of the licence is expected within the next two months. The joint venture has identified prospective resources of 150 mmboe within the new licence area.
Following its acquisition by Cairn Energy plc, Nautical has decided to withdraw from the PL1/10 licence. A farmout agreement with Nautical has been terminated and InfraStrata will acquire their 20% interest, subject to DETI approval. InfraStrata will include this licence interest in the ongoing farm out process. Prior to the farmout, InfraStrata holds a direct 45% interest in the licence and a further 18% via a shareholding in partner company, Brigantes Energy Limited.
Commenting on the update, CEO of InfraStrata said:
“We are delighted to have received the planning approvals and clarifications necessary to start the process of drilling our first two exploration wells. This will be a busy period and our dedicated team will be working hard to progress the drilling of both wells, including the preparation of tender documentation and securing drilling rigs.
The wells will be testing structures in two different basins with combined prospective resources identified by the joint ventures within the Dorset and Northern Ireland licence areas of over 700 mmboe.
We look forward to reporting regularly during the year on progress towards the drilling of both wells towards the end of the year.”