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LONDON (Alliance News) - InfraStrata PLC on Tuesday revealed a series of farmout agreements that will result in completion of the funding for the planned Woodburn Forest-1 well in Northern Ireland, as long as certain conditions are met.
The farmout agreements were entered into by the petroleum exploration & gas storage company and Brigantes Energy Ltd, both together and separately. The funds for drilling the well in the first half of 2016 are being transferred to an account administered by InfraStrata's solicitors, Fieldfisher LLP.
In order to facilitate the farmout agreements, InfraStrata said it has signed adeal with Brigantes, replacing the outstanding obligations under a previous sale and purchase agreement, signed and previously disclosed in March 2013. The deal means 5% of the interest in PL1/10 will be transferred to InfraStrata from Brigantes, a 10% interest to Brigantes from InfraStrata in P2123, and the payment of GBP86,459 cash to InfraStrata from Brigantes.
InfraStrata will have a 20% new licence interest, while Brigantes will have a 10% interest. The other parties to enter into farmout agreements Tuesday include Baron Oil PLC (10%), Tudor Hall Energy Ltd (10%), Southwestern Resources Ltd (16%) and Petro River UK Ltd (9%).
"This is the culmination of 5 years of hard work by InfraStrata and its joint venture partners. Work commenced on PL1/10 in 2011 with the acquisition of the first of two seismic surveys. The technical evaluation of the area has confirmed the presence of numerous prospects within the Larne-Lough Neagh Basin of Northern Ireland," Chief Executive Andrew Hindle said in a statement.
There are three target conventional sandstone reservoir intervals, the Triassic Sherwood, Permian Lower Permian Sandstone and Carboniferous Sandstones.
"With Northern Ireland dependent upon imported oil and gas, the development of an oil and gas industry could have a very positive impact on its economy. The drilling activity itself generates income for the local economy. InfraStrata estimates that the drilling of a deep borehole, Islandmagee-1, for its gas storage project in 2015 resulted in approximately GBP800,000 invested with local services and contractors. The company expects a similar positive impact for the Woodburn Forest-1 well," Hindle said.
"We now look forward to working with local stakeholders to complete the pre-drilling arrangements and then drilling the well with the minimum impact to local residents," Hindle added.
Separately, Baron Oil noted the news. "Under the terms of the funding announced by Infrastrata, Baron has agreed to enter into a farmout agreement with Infrastrata and Brigantes Energy Ltd to earn a 10% interest in the Northern Ireland Petroleum Licence PL1/10 and to acquire a corresponding 10% interest in the adjacent offshore petroleum licence P2123," Baron Oil said.
"Under the terms of the farmout agreements, Baron has agreed to pay consideration of GBP570,000 to Infrastrata, as operator of the licences, representing back costs and Baron's share of funding for the Woodburn Forest-1 well. The cost of this consideration will be met from the company's existing unrestricted cash resources, the balance of which was GBP2.25 million (unaudited) as at December 31, 2015," Baron Oil added.
Shares in InfraStrata were up 22% at 1.43 pence on Tuesday morning, while shares in Baron Oil were untraded at 0.408p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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