Infrastrata Share Price (INFA)

'Also Northern Ireland has a target to generate 40 per cent of electricity from renewable sources by 2020. This will be mostly from wind power. A shift to renewables is likely to place an increasing reliance on gas fired power stations to support inherently intermittent supply from wind. Facilities like Islandmagee will be important in being flexible in response to the increasingly fluctuating demands for gas to fuel this electricity generation requirement. All this goes to suggest that after all the disappointments of the Portland project which saw the share price fall from over 400p at one point in 2008 to under 10p.The company now looks as if it really is getting traction on its remaining gas storage project, and going places with its exploration plans. Andrew Hindle says: “We have two exploration wells ,a conventional oil prospect in the East Midlands as well as the appraisal well for the Islandmagee gas storage project—all have the potential to unlock very significant value for shareholders.” Hindle further points out that: “Few other companies in our peer group will be drilling this many wells over the next twelve months”.

The company believes that it is unlikely the seasonal gas storage market will improve in the short term and therefore the existing Portland site leases will be terminated at their next break date on June 1 2013. Other possible future uses for the site include salt production and export, the generation and export of electricity and the siting of petroleum production facilities. An application for a carbon capture and storage (CCS) scheme was rejected. Should gas storage market conditions improve or the salt business progress, a new lease will need to be agreed with the landowner, Portland Port Limited. InfraStrata’s other gas storage project the Islandmagee Storage scheme in Northern Ireland is very much, on the other hand, a going concern -- there is great flexibility in gas storage here it seems. Islandmagee Storage limited was granted planning permission for a £400 million natural gas storage facility at Islandmagee in Country Antrim in October 2012. IMSL plans to create seven caverns, capable of storing up to a total of 500 million cubic metres (18bcf) in Permian salt beds around 1,500 metres beneath Larne Lough. IMSL is a joint venture between InfraStrata (65 per cent) and Moyle Energy Investments (35 per cent). In January2012 IMSL entered into agreements with BP Gas Marketing (BPGM) for the appraisal of the project and the option for BPGM to acquire a 50.495 per cent equity interest in IMSL. Under the terms of a Joint Appraisal Agreement BPGM has agreed to fund the activities necessary to develop the project. An important next step is to drill an initial appraisal well. The company is hoping to drill this back to back with the exploration well on Licence PL1/10 in 2013. Samples of the Permian salt will provide the technical confirmation and final design parameters for the project. The Islandmagee project has a number of advantages which enhance its commercial case. These include its closeness to gas infrastructure particularly the SNIP (Scotland to Ireland Pipeline) Inter-connector at Ballymumford which is owned by Moyle’s parent, Mutual Energy. The proposed gas storage facility (it should take seven years to build the whole project ) will make a significant contribution to the security of gas supplies for the whole island of Ireland. Northern Ireland itself is dependent on gas imported for 65 per cent of its electricity generation with 90 per cent of the island’s gas imported via a single pipeline from Scotland. The facility when complete, will store enough gas to satisfy Northern Ireland’s demand for around 60 days."

The hope is to drill the well in Q4 2013. Infrastrata, could be drilling a well before then, however. Through its stake in Corfe Energy InfraStrata finds itself with a 5 per cent interest in the Burton-on-the Wolds prospect in the East Midlands, where the company’s old partner Egdon Resources is the operator. This prospect has been mapped using new and reprocessed 2D seismic data—mapping of the prospect shows it covering an area of approximately 1.3 km2 at the primary target level. The reservoir age is carboniferous and the reservoir formation is Rempstone Sandstone. The targets are not in the same league as the Northern Irish play, but there is a four–way dip closure and Mean Prospective Resources are put at 3.8 mmbo (net 0.19 mmbo to InfraStrata). The operator hopes to drill an exploration well in Q3 2013 (subject to planning permission). The second main oil and gas project is in the Wessex Basin in southern England. The P1918 licence (78 per cent net interest: A direct 70 per cent WI with additional 8 per cent WI via a shareholding in Corfe Energy) is offshore the Dorset coast. There are three blocks covering 584 square kilometres close to the prolific Wych Farm field. A total of seven wells have been previously drilled within the licence, six of them showing oil and gas shows and three of them flowing oil and gas on test. Of particular interest to the joint partners is the Purbeck Prospect, an anticline in the east of the licence updip of the onshore well Southard Quarry-1 well, which encountered oil in the Jurassic and Triassic reservoirs during 1989, but which was not tested. An initial “most likely” estimate of the prospective resources, by the joint venture partners, for the primary reservoir objective, the Triassic Sandstone is approximately of 100 bcf of gas recoverable (net 78 bcf to InfraStrata.) Subject to planning permission it is hoped an appraisal well could start in Q1 2014. As for gas storage, the Portland project was once the company’s flagship scheme. It was to be a 1000 million cubic metre gas storage facility in 13 salt caverns costing £500 million. Planning permission was granted early in 2008. But the collapse of financial markets in October of that year meant finance became impossible to obtain. Moreover, the investment was against a backdrop of a closing of the summer-winter gas price spread which undermines the financial case for all but the very flexible gas storage projects in the UK."

"The scheme in Northern Ireland has been in the news recently, because the company announced it is readying itself for drilling. This meant not only that the shares saw a 2p rise to 14p, but also that there were headlines in the local newspapers. People in Northern Ireland are not used to news about hydrocarbon exploration. The Larne-Lough Neagh Basin which is home to InfraStrata’s 663 sq km PL1/10 licence has been largely overlooked by the oil and gas industry, with only one exploration well being drilled in the centre of the basin -- an area covered by the licence -- back in 1971, before any seismic data had been acquired.. One of the reasons for the lack of attention is the presence of extensive flood basalts at or near the surface. Basalt has affected the effectiveness of seismic in the past and deterred explorers. However, by applying newer techniques in seismic processing, InfraStrata has been able to image below the basalts. The data has revealed a basin very similar in structural style to the prolific East Irish Sea Basin with 20 undrilled situations. The company has recently released a prospectivity review of PL1/10.The review was prepared by project geosciences consultants Merlin Energy Resources. Substantial progress has been made in the de-risking of the Larne-Lough Neagh Basin play over the course of the last two years following two seismic surveys undertaken by InfraStrata in 2011 and 2012. A review of play elements in the Larne-Lough Neagh Basin indicates significant potential for petroleum resources. Merlin has identified combined un-risked P50 prospective resources on the PL1/10 licence in the Triassic and Permian sandstone reservoir intervals of over 450 million barrels of oil (mmbo) (net Infrastrata over 194 mmbo). Importantly, the company has announced that it has secured further funding to drill its first exploration well on the PL1/10 following the sale of a 5 per cent interest in the PL1/10 interest to Brigantes Energy. Under the terms of the agreement Brigantes will pay £150,000 in cash and in addition carry InfraStrata for its share of 5 per cent of the costs of the well. Taken together with previous funding arrangements with project partners, InfraStrata now has funding in place to cover the majority of its anticipated costs to drill the first exploration well which will target P50 prospective resources of 25 mmbo (net InfraStrata 11 mmbo). A well onshore Northern Ireland costs around £3 million to drill. The partner interests in the well will be as follows:- InfraStrata: 25 per cent direct interest plus 18 per cent interest due to its 40 per cent stake in Brigantes giving it 43 per cent Brigantes Energy: A 45 per cent stake but taking out the 18 per cent means 25 per cent Nautical Petroleum (Cairn Energy plc) 20 per cent Terrain Energy: 10 per cent"

http://oilbarrel.com/news/infrastrata-gears-up-to-drill-its-first-oil-and-gas-exploration-wells-while-not-abandoning-its-gas-storage-projects-entirely "All this goes to suggest that after all the disappointments of the Portland project which saw the share price fall from over 400p at one point in 2008 to under 10p.The company now looks as if it really is getting traction on its remaining gas storage project, and going places with its exploration plans. Andrew Hindle says: “We have two exploration wells ,a conventional oil prospect in the East Midlands as well as the appraisal well for the Islandmagee gas storage project—all have the potential to unlock very significant value for shareholders.” Hindle further points out that: “Few other companies in our peer group will be drilling this many wells over the next twelve months”. Article... InfraStrata Gears Up To Drill Its First Oil And Gas Exploration Wells While Not Abandoning its Gas Storage Projects Entirely "The financials in the interim results for AIM listed InfraStrata plc for the six months ending January 31 2013 are nothing to write home about. But nobody thought that they would be. Losses fell from £1.18 million in the first half year to January 2012 to £0.79 million for the comparable period ending January 31 2013. InfraStrata is in the business right now of planning and building ambitious projects, so it is not generating lots of money. The important thing is it still has around £900,000 in cash, which is enough to pay the wages and other overheads while it gets on with its grand schemes. InfraStrata CEO Andrew Hindle InfraStrata CEO Andrew Hindle Not so long ago the company was best known as a gas storage company. Indeed, when it was de-merged from mostly UK onshore E & P and fellowAIM-listed junior Egdon Resources in January 2008, it was named Portland Gas after the place in Dorset in southern England where its then flagship gas storage project was sited. The company has not given up on gas storage altogether but now the focus is more on oil and gas development and exploration activities. The two main exploration projects are in areas where the gas storage projects are also to be found; namely Dorset and Northern Ireland. There is also a smaller hydrocarbon project in the Midlands. All three are, of course, very different propositions to gas storage."

http://www.investegate.co.uk/infrastrata-plc--infa-/rns/interim-results/201303250700077040A/